Sneaky tax surprise for tertiary graduates

new-zealand-labour-party

Fri May 16 2014 12:00:00 GMT+1200 (New Zealand Standard Time)

Sneaky tax surprise for tertiary graduates

Friday, 16 May 2014, 12:06 pm
Press Release: New Zealand Labour Party

Graduates are once again the losers in National’s Budget, this time with changes to student loan repayment thresholds, Labour’s Tertiary Education spokesperson Maryan Street says.

“National has a sneaky tax surprise for tertiary graduates. It has suspended inflation adjustments to the student loan repayment threshold for a further two years until April 2017.

“Students who earn as little as $19,084 have 12 per cent of their after tax earnings taken as automatic student loan repayments. This threshold was booked to rise, but National cancelled the adjustment to claw back $70 million off students who have found work.

“This follows National last year raising repayment levels from 10 to 12 per cent of their earnings which wacked graduates with higher payments, often hundreds of dollars more a month.

“The threshold for repayments was adjusted for inflation under Labour. This meant there was a stronger incentive to find work and recognition that low earners need a little more in their pockets to make ends meet.

“But National has decided to hit low-earners harder. By refusing to lift thresholds with inflation, they are biting further and further into real earnings as living costs rise.

“Students with young families will find much of the support given for new-borns will be swallowed up in tax deducted for student loans. This will hit modest earners the hardest.

“In each and every one of National’s first five budgets, they cut student support. Now they are going after students even as they leave education to make their way in the world,” Maryan Street says.

Ends

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