Wednesday, 22 August 2018
Education and Other Legislation Amendment (VET Student Loan Debt Separation) Bill 2018, Student Loans (Overseas Debtors Repayment Levy) Amendment Bill 2018; Second Reading
I thank those members who have spoken on the Education and Other Legislation Amendment (VET Student Loan Debt Separation) Bill 2018 and the Student Loans (Overseas Debtors Repayment Levy) Amendment Bill 2018. The bills amend the VET Student Loans Act 2016, the Higher Education Support Act 2003 and other legislation to establish VET student loans as a separate income-contingent loan. The bills move the legislative basis for VET student loan debts from the Higher Education Support Act into the VET Student Loans Act. In effect, this provides greater transparency of repayment rates for VET student loans and more timely and accurate reporting on the fiscal sustainability of the VET Student Loans program.
The repayment thresholds, repayment rates and indexation with respect to VET student loan debts will be the same as the repayment thresholds, repayment rates and indexation for HELP loans. Persons residing overseas who have a VET student loan debt will be required to make repayments in respect of those debts as per current arrangements. The bills also enable better continuity and more flexibility in delivering approved courses. This is achieved by enabling the courses and loan caps determination to reference the national register of courses, the authoritative information source on nationally recognised VET courses, training packages and their status.
The Senate Scrutiny of Bills Committee, in its Scrutiny Digest No. 5 of 2018, requested more information on provisions in the VET student loan debt separation bill that apply an offence of absolute liability. In addition, there is a typographical error in the explanatory memorandum. To address the Scrutiny of Bills Committee's request and amend the typographical error, I table a correction and addendum to the explanatory memorandum.
I also wish to respond to the Senate Education and Employment Legislation Committee's report on its inquiry into the bills. The committee recommends that the Senate pass the bills. I commend the committee's recommendation that supports better information for government and individuals through more timely, transparent and accurate reporting on the fiscal sustainability of the VET Student Loans program. I note that both the Labor senators' and the Greens senators' additional comments support the intent of the separation. However, Labor's comments also raise concerns with the VET sector more broadly and seek a large-scale review of the tertiary sector. I note that this is out of the scope of the bills. The Greens' comments indicate that the bills change repayment characteristics of VET student loan debts and question the repayment process. The bills, rather than make policy changes, ensure VET student loan repayment parameters align and are consistent with other HELP subprogram debtors, as is currently the case. I thank the various providers and peak bodies that made submissions to the inquiry and thank the committee for its endorsement of the bills. I also thank members for their contributions to this important debate about accurately reporting on the fiscal sustainability of the VET Student Loans program.
Finally, I intend to move parliamentary amendments to the Education and Other Legislation Amendment (VET Student Loan Debt Separation) Bill in the committee stage. The amendments delay the commencement of some items and provide for a renewable HELP balance, which also includes consequential amendments to the Higher Education Support Act and the VET Student Loans Act. These amendments are consistent with parliamentary amendments that were made to the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018 prior to its passage on 14 August 2018. The parliamentary amendments to the Education and Other Legislation Amendment (VET Student Loan Debt Separation) Bill 2018 also include minor technical amendments to ensure consistency between how VET student loan debts are calculated under the VET Student Loans Act, following the separation from HELP debts, and how HELP debts are calculated under the Higher Education Support Act. These additional amendments are minor in nature and relate to the rounding down of cents.
I commend the bills to the House.
Question agreed to.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.