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Hundreds of thousands of New Zealanders will benefit from law changes passed by Parliament this week, and which honour two of Labour's key election pledges.
The law changes will make student loans interest free and expand the Working for Families package. Labour Government MP Georgina Beyer said more than 400,000 students and former students with loans, and another 160,000 working families will benefit from the change, which takes effect on 1 April.
"This legislation clearly demonstrates the Labour-Progressive government's commitment to keeping its promises. These changes also represent our commitment to a fair and inclusive society, by introducing measures that lift the quality of life and living standard for all Kiwis," Ms Beyer said.
"Young people will now have the opportunity to achieve their full potential without the burden of student loan interest, and we're supporting working families as an important part of our desire to build a strong and confident nation."
The family tax relief provisions raise the threshold at which family income assistance begins to abate from $27,500 to $35,000 and reduce the abatement rate from 30 percent to 20 percent. The size of the tax reduction will depend on family circumstances, including the number of children.
"The tax reduction will vary depending on family circumstances, including how many children you have, but families will be better off by about $50 under this change, and that's great news for our region," Ms Beyer said.
The interest free policy applies to existing and new loans and is designed both to cut the cost of tertiary study to students, and to encourage skilled Kiwis to invest their skills in New Zealand. With some important exceptions, people have to be living in New Zealand to qualify for interest free loans.
And in a bid to lure people back, non-resident borrowers in default for non-repayment of their loans will have their penalties cancelled under a special amnesty if between 1 April next year and 31 March 2007 they agree to keep their current liability up to date for two years.
For further information about either the interest free student loans or Working for Families expansion, visit online: http://www.taxpolicy.ird.govt.nz/
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