I’ve just recalculated the scenario of someone earning $34,300, whose income is $34,300, and constant, and has a $15,000 loan. The Labour calculator tells us it would take 25.5 years to repay their loan and have interest of $11,891.
Now Labour have said their calculator allows for the repayment threshold to go up by inflation. Now inflation is targetted to be between 0 and 3% so the midpoint is 1.5% which I have used to see how much it changes from the IRD scenario of 14 years.
My simple excel spreadsheet, which doesn’t even allow for the possibility of interest writeoffs, has the loan paid off in 16 years. So still a 10 year time difference.
Note I am providing my calculations so they can be audited. Hopefully Labour will do the same.No tag for this post.