Student loan defaulters to be tracked by passports

Tax staff have cracked down on hundreds of student-loan borrowers in New Zealand. Photo / Mark Mitchell

Child support dodgers and student loan defaulters will soon be tracked down using their passport details.

The move is part of a new information-sharing agreement announced today by Internal Affairs Minister Chris Tremain and Inland Revenue Minister Todd McClay.

Under the agreement, Internal Affairs will pass contact details on to Inland Revenue whenever someone renews or applies for a passport.

Mr Tremain said the agreement was the first under changes to the Privacy Act which have enabled information sharing between agencies.

"This is a good example of government agencies working together to provide better public services and ensure that everyone meets their obligations.''

Mr McClay said the tax system relied on voluntary compliance and the vast majority of people paid their taxes, child support or student loan repayments on time.

"But for those people living overseas who fail to comply, the principal reason is that many of them have simply lost contact with Inland Revenue. This common sense measure will allow Inland Revenue to contact those people to arrange payment.''

Inland Revenue has found 70 per cent of borrowers in default began to comply once they had been contacted.

Student loan defaulters owed $635.9 million as of June 30, with most of that owed by overseas borrowers, who were $535.1m in default.

The amount of outstanding child support was even higher, at $2.8 billion. Of that, 93 per cent was made up of outstanding debts of at least two years old, and the rest was made up of penalties.

Overseas defaulters owed more, accounting for $1.6 billion of unpaid child support.