AS IF Kiwis needed a reason not to cross the ditch this Christmas, they’ve just received an extraordinary warning from their government.

Those New Zealanders who have not paid off their student loans are at risk of being arrested at the airport if they seek entry to their mother country.

It seems tens of thousands of Kiwis that migrate to Australia are conveniently forgetting about paying for their educations, leaving their homeland with an $840 million black hole.

Their homeland’s Inland Revenue department has issued a media statement warning it is “actively monitoring a group of borrowers in default”, who will be arrested at the border if they attempt to enter, or leave, the country.

New Zealand-born Melbourne woman Holly Kneebone told while she didn’t have a student debt, plenty of her Kiwi mates did — and they’d received phone calls from bureaucrats back home.

Inland Revenue Collections Manager Stuart Duff said his department had about 30,000 Australia-based Kiwis on its watch list.

And for those in “serious default” who failed to get in touch, he warned, the ramifications were high — with the possibility they may not be able to leave New Zealand until a repayment plan was in place.

“Not meeting a repayment obligation is an issue we are taking very seriously,” Mr Duff said.

“It’s high time borrowers in default meet their obligations, just like the vast majority of student loan borrowers.”

The average Kiwi migrant’s student debt is $28,000, but for the worst offenders this number is much higher.

Those who have been ignoring their obligations in the assumption that they would be overlooked, will have accrued interest on the amounts borrowed.

Interest is only charged on the loans after borrowers have been overseas for more than 183 days.

Those who are in default are charged a penalty interest rate of 9.3 per cent a year, while those who have been meeting their obligations pay 5.3 per cent interest.

Inland Revenue charges 7.3 per cent interest on defaulters who have negotiated a payment plan.

“A judge can issue an arrest warrant if they believe you are about to leave New Zealand without making reasonable efforts to pay the amount in default, or to make an arrangement to pay,” Mr Duff said.

“If you are brought before the court the judge may apply a range of orders requiring you to make repayments before you are allowed to leave the country.

“If you try to leave New Zealand once a warrant has been issued you will be arrested at the New Zealand border.”

This could result in a conviction and a fine of up to $2000, or three months’ jail, he said.

The New Zealand Parliament introduced a new law to allow greater information sharing with the Australian Taxation Office, meaning the number of Kiwis on its watch list will likely grow.

Inland Revenue will be contacting people nominated by borrowers as their point of contact while travelling, to track down borrowers who are yet to make any payments.

New Zealand recently hiked its loan repayments for Kiwis living overseas, “to encourage loans to be paid off sooner”.

Overseas-based borrowers must make two repayments each year towards student loan debt.

They can either make two lump sum payments, or make regular payments throughout the year provided they meet the minimum amount due.

Mr Duff said arrest warrants were “intended to be used only for the most serious offenders”.

“We will continue to work with individuals on a case-by-case basis and we urge borrowers to get in touch with us so we can help them set up a repayment plan.”

One approach that’s not going to work is summed up by the refrain: “You better run, you better take cover.”


By Adam