22 Jan 2016

'I just felt like I was a criminal'

6:40 pm on 22 January 2016

A Cook Island maths teacher arrested at Auckland Airport for failing to make student loan repayments insists he never heard from IRD, despite the department saying it tried to reach him several times.

Ngatokotoru Puna thought it was a joke when he was arrested at the airport for failing to make repayments on his student loan.

Ngatokotoru Puna thought it was a joke when he was arrested at the airport for failing to make repayments on his student loan. Photo: RNZ

Ngatokotoru Puna, 40, said he initially thought it was a joke when he was approached by police at the airport, where he was planning on flying home after attending a maths course in New Zealand.

He was arrested for failing to pay over $22,000 in outstanding debt repayments, and appeared in Manukau District Court today.

"I started looking around thinking it was a practical joke or something," he said of his arrest on Monday.

"I thought 'is this a joke', but it wasn't."

He described the next few hours as the "worst experience of my life".

Mr Puna said he was held from 8am until 3.30pm.

"I thought, OK, I'll be here for maybe half an hour or something like that because I don't think I'm a criminal."

During the wait, others in custody asked him what he was in for. When he replied "student loan", it was met with laughter and surprise.

He was among about 10 other people in a cold room, and was also searched, he said.

"So I'm sitting there, thinking do I belong to this group, is there a group for people with just student loans? I just felt like I was a criminal. It hit me that I'm sitting with the criminals."

Power used for the first time

Mr Puna's arrest marks the first time Inland Revenue has used its power to detain people with unpaid student debt.

He had been in the country for a two-week maths conference, organised by the New Zealand Association of Mathematics. His trip was funded by the Cook Islands' government.

His debt was incurred from a Bachelor of Arts (BA) degree at Auckland University more than a decade ago and was initially $40,000; but, with interest added, it's now about $130,000.

The father of five, who is also Cook Islands Prime Minister Henry Puna's nephew, said he had never received any letters or phone calls from the IRD about his debt prior to his arrest.

Ngatokotoru Puna was arrested at the aiport as he tried to leave New Zealand, for failing to make payments on his student loan.

Ngatokotoru Puna, who was arrested at the airport, appeared today at the Manukau District Court. Photo: RNZ / Carla Penman

He said the last contact he had had with IRD was in 2010, to ask for a three-year holiday from payments.

This has been rejected by IRD, which said it had tried to reach him several times before the arrest.

"I never got anything from them. That's what I told them," Mr Puna said.

"I was shocked at the amount it has accumulated...I had no idea it had grown that much."

Inland Revenue collections manager for student loans Stuart Duff said the arrest was a last resort.

"From our side, we did actually make contact with the customer through the various channels of email, phone and letters to the customer and, as we say, the arrest at the border was the last resort."

It was important for people to contact IRD if they were struggling to repay their loans, he said.

"I think that borrowers need to understand that they need to pay these monies back to us, and I'd actively encourage all of our borrowers to give us a ring and come to some sort of arrangement with us to pay back these student loans."

IRD would be working with Mr Puna to find options for him to pay the money back, Mr Duff said.

Arrangements made

Following Mr Puna's first appearance on Monday, he was remanded on bail to work out a way to remedy the issue.

The judge in court today acknowledged his efforts, with his parents' help, to pay back $5000 to IRD and his future plans for repayment.

He also said to Mr Puna: "I think you've learnt your lesson, haven't you?"

The judge then told him he was free to go, and he was handed back his passport.

Outside court, Mr Puna said he would be required to pay his lawyer another $2000.

He had made an arrangement with the IRD, he said. "They said if I paid for this year's obligation [$5000] then they would wipe my 2011 to 2015 [obligations]."

He accepted that with a mortgage of $300,000 and an income of $35,000 per year, he was likely to be paying off his student loan until the day he died.

Clarification needed, students' association says

But New Zealand University Students' Association acting president Laura Harris said harsh penalties would only scare people off.

It was not clear what a last resort looked like and what the threshold was for arrest, Ms Harris said.

Many who had gone overseas were too afraid to come back and see their families because they were struggling to pay back their loans, she said.

There are 111,000 borrowers overseas, with about 70 percent of them defaulting on their loans.

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