Friday, May 4, 2012

On student loans and the May Budget

The May budget brings with it rise in the amount of compulsory student loan repayments. I'm not against this - I'd much rather pay off my loan faster and it's much easier to do if the money's gone before it even appears in my bank account. What I am against is the government taking away the incentive to make extra voluntary repayments. They were paying $100 off for you for every $1000 you voluntarily repaid on top of the 10% of your income you already pay.

Anyway an extra 2% doesn't seem much but when you add it all up I don't even see over a third of my pay - that's 4% kiwisaver, 12% student loan, around 20% tax right? I'd like to put more into kiwisaver but that'd take my take home pay down to 60% of my income. Take an hourly rate that is not much above minimum wage, add an expensive yarn/wine/travel habit and it explains why I'm shivering away in a house without heating :-) Actually I shouldn't complain too much - I could still be in the higher tax bracket and missing nearly half my pay check!

So many of my former schoolmates, colleagues and friends are now living across the ditch and doing really well for themselves. I never saw myself doing it long term - an extended OE yes, moving to Australia permanently, no. As I get older I'm starting to see the sense of it all...


  1. So does the government still offer that $100 every $1000 or have they dropped it? I never thought I would move to Australia. Even when we came here for a job, we didn't think we'd live here, we just came for 2 months which has now ended up as almost 3 years now. I think it all depends on the individual though. We made a good choice for our family... if we stayed in NZ we'd be struggling to provide for our family, and I'd probably have to be at work.. on the other hand I'd love being around my family.

  2. They will still offer it until March next year, then they are dropping it. I'm putting aside a little each pay day so I can lump some $1000 sometime soon. It looks like you guys are doing really well over there. If I ever come over Adelaide is my first choice. It's got diving, awesome market, pandas and wineries nearby. Sounds like me!

  3. I've only been to the asian markets but I know there are so much more to go look at. We haven't quite explored all there is to see, but we have gone to see the pandas. They have Monarto Zoo which is a drive thru zoo, something like that.. I'd love to go see that one day.