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Speaker 1: So it turns out that the IID crackdown on the

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Speaker 1: overseas student loan defaults is bearing fruit. IID has collected

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Speaker 1: more than two hundred million dollars in student loan repayments

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Speaker 1: in the past nine months, and that represents a forty

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Speaker 1: three percent increase on the same period the previous year.

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Speaker 1: Deloitte tax partner Robin Walker is with me on this.

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Speaker 1: He Robin, Hi, you surprised at how much they've managed

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Speaker 1: to rake in.

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Speaker 2: I think there's definitely plenty to be collected from overseas.

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Speaker 2: So it is good to see that the investment that

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Speaker 2: ID has made an increasing their focus on this area

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Speaker 2: is actually paying dividends in terms of that increase in collections.

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Speaker 1: What does this tell us? What do you reckon this

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Speaker 1: is down to? Is this down to increased resources for

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Speaker 1: IID or more direction for IID.

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Speaker 2: I think it's a bit of both, right. So in

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Speaker 2: budget last year, IOD was allocated I think twenty nine

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Speaker 2: million dollars a year for the next four years to

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Speaker 2: increase their audit activity and that was split across That

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Speaker 2: was split across general order at work and also specifically

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Speaker 2: in relation to student loan borrowers. So what they said

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Speaker 2: last year was that they actually increased their FTEs working

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Speaker 2: on student loans from twenty to forty five, so more

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Speaker 2: than double the number of people focusing on this. So

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Speaker 2: I think they will have really ramped up their efforts

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Speaker 2: to contact people to just give them a bit of

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Speaker 2: a nudge along to say, hey, we know you're not

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Speaker 2: in New Zealand and we know you owe us money

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Speaker 2: and we want you to start making some repayments, become compliant.

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Speaker 1: Again, does it pay for itself? Like the amount that's

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Speaker 1: being put the extra funding that's been put in to

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Speaker 1: actually beef up this team is they are collecting much

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Speaker 1: more than we're funding them.

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Speaker 2: That's right, That's right. So normally on your when Iody

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Speaker 2: puts more money into audits, the return is around you know,

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Speaker 2: eight to nine dollars per dollar put in. So I

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Speaker 2: haven't done the math on this particular one, but it's

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Speaker 2: definitely proving to be worthwhile.

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Speaker 1: Now, Robin, I am. I am so desperate to believe

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Speaker 1: that this represents a change in attitude towards how much

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Speaker 1: we respect the tax pay because in historically we have

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Speaker 1: just been so frivolous with money, right, Loans like the

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Speaker 1: COVID small business loans just given out unsecured. Does this

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Speaker 1: mean what we're seeing here that we are prepared to

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Speaker 1: be more respectful towards it or am I just hoping

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Speaker 1: too much?

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Speaker 2: Well, this is more about collecting the money that people. Oh,

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Speaker 2: so obviously it's great for people to get an education

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Speaker 2: and the student loan facilitates people being able to do that.

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Speaker 2: And obviously we've got this real incentive for people to

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Speaker 2: stay in New Zealand after the finish they're studying, because

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Speaker 2: if they stay here then it's interest free. But as

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Speaker 2: soon as you leave New Zealand you suddenly start incurring interest.

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Speaker 2: But the issue there is that it's a lot harder

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Speaker 2: for you know, New Zealand to get its claws on

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Speaker 2: those repayments as soon as somebody leaves New Zealand. And

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Speaker 2: there's various statistics that are available, but it's quite it's

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Speaker 2: quite telling that what IDY has available, generally New Zealand

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Speaker 2: based borrowers are ninety five percent compliant, but overseas borrowers

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Speaker 2: the compliance varies. Like back in twenty twelve when the

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Speaker 2: statistics started, about fifty percent of people were consistently compliant

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Speaker 2: and then it dropped down, and I think the lowest

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Speaker 2: I've seen is twenty twenty three, it was nineteen percent

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Speaker 2: were compliant, and at the moment it's only thirty thirty

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Speaker 2: percent of people are compliant as of the end of

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Speaker 2: twenty twenty four. So yeah, there's definitely a lot of

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Speaker 2: people overseas that could start repaying more of their loans.

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Speaker 1: Interesting. Hey, Robin, always good to talk to you. Thank

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Speaker 1: you so much, Robert Walker, Deloitte Tax Partner.

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