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Driving graduates offshore isn’t enough?

NZUSA Media Release 14 August 2012

Driving graduates offshore isn’t enough?

The NZ Union of Students’ Associations (NZUSA) is challenging Inland Revenue’s rationale for targeting New Zealand citizens living or working overseas through out-sourcing to overseas debt collectors and the unprecedented objective of ‘tracking and tracing’ former tertiary students.

“The extreme measures about to be taken to chase down New Zealand graduates who are gaining overseas experience, are symptomatic of a Government that it is prepared to treat graduates as if they are in the same category as tax-evading criminals or worse,” said Pete Hodkinson, NZUSA President.

“The position of former students currently living or working overseas who have overdue payments is often very complicated and misunderstood. The vast majority will be on what was once considered the traditional ‘OE’ and earning minimal income, or in the case of the lucky few they may have bridged the gap to securing the kind of job they couldn’t get here in New Zealand.

“Either way they will literally be on foreign ground, struggling to find their feet, and just starting out on the long and winding path to generating a stable future. Furthermore all students everywhere are at some risk of further penalties, such as this year’s unilateral 20% increase in the repayment rate.

“The high level of distrust being shown in graduates by the Government is becoming damaging. For its part, Inland Revenue was still in the early days of running a successful social media campaign to stay connected with our newly expat New Zealanders, so the rationale for taking the draconian and expensive step of employing overseas debt collection companies is a clear case of overkill,” said Hodkinson.

“NZUSA understands that the percentage of legal actions commenced by Inland Revenue against all student borrowers in recent years amounted to just 0.4 percent (or 0.076 percent for overseas New Zealanders). By the point that a legal action is reached the fact is that there is no money left to be wrung out of the borrower e.g. they are effectively bankrupt.

“We believe the act of setting profit-incentivised offshore debt agencies on to vulnerable new graduates too early in the piece will just serve to further jeopardise the financial stability they need to get on to their feet. No one’s supposedly secure New Zealand taxpayer information will be free from violation any more. It’s the thin edge of a wedge that Inland Revenue should step away from.

“What concerns NZUSA the most is that future generations of students will either be inhibited from the enriching step of gaining global experience, or will take this as a signal that they should not come home and should stay overseas – where they will remain welcome taxpayers – indefinitely. One way or another, pressured debt-chasing will increase the risk they will be lost to Australia or to the UK or further afield forever.”


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