Editorial: Clawback of expats' debt only way to go

There will be few people upset at the Government's decision to increase the number of expats it targets for non-payment of student loans - except, perhaps, those students in the firing line themselves.

In these days of fiscal prudence, the amount of money owed by students living abroad is an absurdity - overseas-based borrowers have loans totalling more than $2.3 billion, of which $289 million is overdue for repayment.

Yesterday, the Government announced its debt recovery programme was set to be expanded to target another 50,000 debtors in Australia and the United Kingdom.

It's a smart move, particularly in an election year. Nothing stirs the pot of public anger like a suspicion that some people are creaming it unfairly, while others have to pay.

It's by no means a watertight premise, but most people will presume that if someone is tertiary-educated and living overseas, there's a good chance that they are making a decent living off the back of that as-yet-unpaid-for qualification.

The excuse of some, that while trying to decide whether they wanted to live in Sydney or London they somehow forgot about their debt, just doesn't wash.

As anyone who has ever had a sizeable student debt will tell you, it's not the sort of thing you just forget about - or at least it shouldn't be, particularly when you consider our student loan system is taxpayer-funded.

The Government's crackdown is already bearing dividends - an Inland Revenue pilot scheme targeting 1000 Australian-based loan holders has in the past 10 months led to the recovery of more than $4.7 million.

As part of that scheme, the early stages of legal proceedings are under way for a small number of borrowers.

While legal action is deemed by the Government to be a last resort, those borrowers who do meet their obligations will be pleased to see action being taken.

Statistics released by the Government show the median repayment time for borrowers based in New Zealand as sitting at 4.6 years, while by comparison, the overseas median is a massive 13.9 years.

Even if New Zealand was not facing an environment of unprecedented global financial unrest, the most basic concept of fairness suggests our loan defaulters need to be reined in.

But consider the sorry state of our country's books, and it's clear our debt-laden expats can no longer be allowed to take advantage of taxpayers' largesse.

Feedback: editor@wanganuichronicle.co.nz