Taxman's threat: We'll sink defaulters

Inland Revenue is threatening to bankrupt former students living in Australia who are refusing to repay loans.

Tax staff have cracked down on hundreds of student-loan borrowers in New Zealand and are moving their enforcement across the Tasman.

The plan is revealed in IRD documents released to the Herald under the Official Information Act.

Katrina Williams, an IRD section director, said in the documents: "In Australia, we are taking legal action and when this fails, issue bankruptcy proceedings when overseas-based borrowers have not paid."

That would mean that the IRD could get a New Zealand court judgment transferred to Australia, where it would then be enforced.

Measures could involve charging orders on a property, deducting money from a person's salary, seizing assets such as vehicles and even bankruptcy.

The same system is being planned for borrowers living in Britain. The documents show IRD has taken legal action against 360 people in New Zealand and 38 borrowers who live overseas, most of them in Australia.

Nzherald.co.nz