Labour promises to cut student loans by 10%, but fees-free graduates would miss out

A Labour government would write off 10 percent of eligible student loan balances, Chris Hipkins announced at the party's campaign launch in Manukau on Sunday. Loans of $2000 or less would be cleared entirely.

The policy would cost $583.4 million over five years, according to RNZ.

To qualify, graduates must be New Zealand tax residents with a loan still to repay, and must not have benefited from fees-free, a scheme Labour itself introduced when it was last in government. That leaves out fees-free graduates, graduates living overseas however much they owe, and people who have already paid off their loans. The write-off would apply to current and future graduates.

The $2000 threshold creates a cliff: owe $2000 and the debt is gone; owe $2500 and you get $250 off. A graduate owing $40,000 would get $4000 off.

Hipkins aimed the policy at people thinking of leaving. "We're seeing far too many New Zealanders giving up on this country," he told reporters after the launch. "I want to give them more of a reason to stay."

More than 600 supporters, volunteers and candidates attended the launch at the Due Drop Events Centre, the NZ Herald reported. The student loan announcement was cheered as Hipkins declared that "neo-liberal, trickledown economics does not work". He said the election would be about the cost of living, and pointed to Labour's policies on supermarkets, fare caps and free GP visits.

The Herald's preview of National's campaign launch lists the policies Labour has already released: a capital gains tax to pay for three free GP visits, a fare cap for public transport, loans for solar panels, a new KiwiSaver policy, an independent curriculum group, and a promise of a job for every nursing graduate.

Tax is the main fight between the parties. Hipkins has consistently said Labour would introduce only a capital gains tax if elected, the same Herald preview reported, and has ruled out the taxes its possible post-election partners are campaigning on. National has repeatedly said that Labour "and its mates" (by which it means the Greens, Te Pāti Māori and Opportunity) would bring in nine new taxes between them. At the launch, Hipkins accused National of telling "outright lies" about Labour's tax plans, RNZ reported.