Student Loan Scheme Amendment Act 2014

robert mckenzie made this Official Information request to Ministry of Justice

Ministry of Justice did not have the information requested.

From: robert mckenzie

Dear Ministry of Justice,

A request regarding the somewhat confusing and bizarre Student Loan Scheme Amendment Act 2014
I was wondering what the implications would be if a defaulting student loan borrower were to be arrested leaving NZ whilst travelling with their Australian or overseas born children, with the children traveling on foreign passports?

Would the children be taken in by the state while the parent awaits sentencing?
If the parent is unable to meet the bail or any repayment would they then be forced to stay in custody or NZ for the minimum of 3 months, if so would the children be housed, fed and schooled by the state during that period?
After 3 months how would the money be extracted from the probably now unemployed and stranded debtor?

Do the courts take into account that a borrower is travelling with children and the distress it would cause before a court order is issued to arrest an individual over what essentially isn’t a criminal matter (although cynically has been made retrospectively so)?
If the arrest is made how would the state manage the destitute and distressed child/children?

Is it a breach of human rights to prosecute and hold an individual whilst separating families because they are essentially too poor or unable to pay the state what is, in most cases, a very old debt consisting primarily of exploitative penalties and interest?
I understand that you will respond that the IRD has “hardship provisions” in place but from personal research and anecdotal experience the reality is that this is not the case.

With over 100000 NZ student loan borrowers now living overseas and the majority of those in default (around 70%) and a NZ prison capacity at roughly 10000 is this Kafkaesque practice really a serious and sustainable solution?

I look forward to your response.

Yours faithfully,

robert mckenzie

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robert mckenzie left an annotation ()

Also as annotation to the above:

Under section 26 of the New Zealand Bill of Rights Act 1990:

"26 Retroactive penalties and double jeopardy
(1)No one shall be liable to conviction of any offence on account of any act or omission which did not constitute an offence by such person under the law of New Zealand at the time it occurred.
(2)No one who has been finally acquitted or convicted of, or pardoned for, an offence shall be tried or punished for it again"

How can an individual be convicted of a crime when at the time of signing the student loan contract defaulting on the said loan was not a crime?

Does not the retrospective law change only apply to loans that were taken out after the law change?

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From: correspondence, official
Ministry of Justice

Hi Robert,

I have passed your correspondence to the Inland Revenue Department, who are better able to respond to this. Officials from that department will respond in due time.

I hope this helps.

Kind regards,

Sophie
Ministry of Justice | Tāhū o te Ture

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From: Commissioners Correspondence


Attachment 1008161432247743.pdf
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Dear Mr McKenzie

 

Attached is Inland Revenue’s reply to your email of 1 August 2016.

 

Kind regards,

 

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From: robert mckenzie

Dear Commissioners Correspondence,

Thank you for your reply,
However I don’t feel that you have provided me with an adequate response to any of my questions.
All your points are vague and ambiguous; however this is to be accepted given the number of amendments to the scheme since its inception a quarter of a century ago.

Your paragraph where you state that New Zealand student loan scheme is recognised as a very generous one is subjective to say the least. I for one would rather have a UK or Australian Student Loan over a New Zealand one due to the criminal charge element now written into it – UK student loans also expire after 25 years, Australian Student Loan payments are capped at 8 percent of earnings over 101,900 and above and start at 4 percent at $54,869. The only generous factor I can see is the they interest free for those still resident in New Zealand (which did not apply to the original loans which were gaining compound interest from day one )however this is far outweighed by the 12 percent of earnings over 19k which isn’t even a living wage. I simply cannot see how this scheme is generous compared to other OECD nations, not to mention the countries where education is free, Germany for example. (with the obvious exception of the US,that being nothing to aspire to), however I digress.

There is one question that you have failed to address which is of most importance.
As per my annotation:
Under section 26 of the New Zealand Bill of Rights Act 1990:

"26 Retroactive penalties and double jeopardy
(1)No one shall be liable to conviction of any offence on account of any act or omission which did not constitute an offence by such person under the law of New Zealand at the time it occurred.

How can an individual be charged and convicted of a crime when at the time of signing the student loan contract defaulting on the said loan was not a crime?

This is like fining a motorist for going 60km in a 60km zone that was later changed to a 50km zone then retrospectively fining them after the fact.

Does not the retrospective law change only apply to loans that were taken out after the law change?
One could argue than many students had they known that they could be arrested leaving New Zealand would never have signed up for these insidious loans.

Also do the IRD still have copies of all the original signed student loan contracts dating back to 1992 as proof of claim should the need arise?

Yours sincerely,

Robert McKenzie

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Michael Rescue left an annotation ()

You may have make a new request to obtain a satisfactory answer rather than replying to this

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Stephen left an annotation ()

This is an extremely good point. Such a shame it seems to have been ignored. I am also curious about answers surrounding the legal implications of a change in policy after signing my contract as well as the impact on my children abroad. I defaulted on my loan - guilty as charged. Not proud of it but we are not all high rollers trying to cheat the NZ taxpayer - some of us simply never managed to make a decent wage. That does not automatically brand someone as treasonous or unworthy of compassion as many NZers seem to feel. I have returned to NZ for one week to visit my dying mother. I'm travelling on a Swedish passport and face the risk of being prevented from returning home to my children because I am on a minimum wage and cannot afford what the IRD demands of me. I am more than willing to arrange a repayment plan but you cannot get blood out of a stone. Throwing me in jail and separating me from my kids does not change the fact that I am completely broke and come from a poor family.

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robert mckenzie left an annotation ()

Stephen,

Sorry to hear about your mother.

If it’s any consolation I am 100 percent confident you will not be arrested, the new Labour govt have pretty much, though no official statement has come out, put a quite stop to the arrests as they are a bad look for a govt that is showcasing itself around the globe as “fair and progressive”, student loan arrests are simply bad PR for poster girl Jacinta ( I have a hunch Labour may be actually looking into closing down this farcical witch hunt too ), they have already banned high interest lenders from adding interest beyond 100 percent of its original value, most of these overseas student loans are 8 to 10 times the original value.

Second point, you live in Sweden? If so the IRD can’t do anything to you over there. If you plan on never living back in NZ you are pretty much safe. The debtors in Australia are most at risk, but in saying that not much really has happened there either. A few court cases, no outcomes published. To date no assets have been seized either.

IRD are just bullies, the staff they employ to chase you as soon as you arrive are barely out of high school, probably got the jobs through WINZ.

Just tell the IRD the truth, you are broke and can’t pay them, not much they can do from there.

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Rich Seager left an annotation ()

There's a movement in the United States (of all places) to nullify all student loan debts. And yes those European countries that offer free education to University Level (as NZ did before the 1990s) do have a much better system than NZ does. You might also like to try and find the Act that changed NZ from free to paid for University Education. I did, and failed to find it.

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