Sophie Scamps (Mackellar, Independent) Share this | Hansard source

In a country that prides itself on giving everyone a fair go, we must confront the growing injustice that is the financial inequality and stress experienced by younger Australians. The rising cost of tertiary education and the mounting burden of student debt are not just economic issues; they are drivers of intergenerational inequity. Unless we address them now, we will leave future generations with fewer opportunities, heavier financial burdens and a diminished ability to shape their own futures. The Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 before us seeks to address the financial inequality experienced by younger Australians by cutting outstanding student loan debts by 20 per cent, by increasing the minimum repayment thresholds for student loans so people can earn more before they are required to pay off their student debt and by shifting to a marginal repayment system. These measures will no doubt bring relief to many Australians struggling with the cost of living and mounting student debt. Indeed I have heard firsthand from people in my community that the one-off reduction in their student debt will have a tangible impact on their lives, particularly as the cost of living is currently so high. I commend the government for responding to the concerns of a section of our society that is often overlooked.

But, while the measures outlined in this bill are welcome, they are not enough. A one-off reduction in student debts will not fix the systemic issues in our education and educational loan systems. Certainly, it will benefit the three million Australians who already hold student debt, but it will do nothing for the future students, who will face larger debts and longer repayment periods. There is far more work to be done to secure systemic changes, including reducing the cost of undertaking higher education itself, particularly for humanities degrees, where the cost of study has increased significantly since the introduction of the Morrison government's failed Job-ready Graduates Package. Systemic changes include expanding the Commonwealth Prac Payment to cover all students required to undertake pracs as part of their studies, and they include ensuring fairer accounting of HELP debt repayments so indexation is not applied belatedly to debts that have already been paid.

The reforms introduced last year by this government and secured through significant pressure from the crossbench began to address the systemic issues. Those changes included ensuring that the debts don't increase faster than wages by newly indexing debts to the lower of the Consumer Price Index or the Wage Price Index. It also included backdating the changes to undo the devastating indexation rise of 7.1 per cent that was applied in 2023. This was a positive start, but there is still more to be done.

Young people today have been hit by the triple whammy of rising housing costs, rising education costs and high living costs, resulting in growing student debt and housing stress. Significant numbers of students across the country are struggling financially and finding it almost impossible to find affordable accommodation while they study. Based on an analysis of more than 45,000 rental listings, Anglicare Australia's rental affordability snapshot revealed that no rental properties, including share houses, were affordable for a single person receiving the youth allowance. Clearly, there is a severe lack of affordable housing options for young people who are studying while on income support. The 20 per cent cut to student debt in this bill will provide welcome relief for many, but it does not address the root cause or causes of the problem.

To secure a more equitable future for young Australians, we need to ensure that they have access to affordable tertiary education free from crippling debt. A key to reducing repayment times is ensuring that the students accrue less debt in the first place. As a priority, we must reverse the impact of the record-high student fees caused by the job-ready graduates program, as recommended under the Universities Accord. The job-ready graduates program was introduced by the Morrison government in 2020. It increased the cost of law and commerce courses by 28 per cent and saw the cost of humanities subjects more than double. A three-year arts degree is now set to cost a staggering $50,000.

But it doesn't have to be this way. I was shocked recently when I found out that my children, who have EU passports, would be able to study for an undergraduate degree in Ireland essentially for free, with only a contribution required to cover services and exams.

The Australian Universities Accord: final report has clearly articulated the perverse impacts of the Job-ready Graduates Package, stating:

The Job-ready Graduates package needs urgent remediation … Many students have extremely high student contributions resulting in large HELP loans that do not reflect their future earning potential.

Students of history, philosophy, media and culture are now likely to pay twice as much for their degrees as students of science, IT, engineering or health. This is despite humanities degrees being essential to future jobs. At this time of unprecedented change, we should be supporting rather than deterring people from undertaking humanities degrees that promote critical thinking, problem solving, historical understanding, philosophical analysis and communications skills. Indeed, just recently we saw more than a hundred high-profile Australians urge the government to abolish the job-ready graduates scheme and implement an equitable university fee system that does not punish students who choose to study humanities and social sciences.

We must also address the perverse timing of student loan indexation so debts are indexed after the yearly repayments are taken off. Currently, students are facing indexation increases to portions of their study debts that they have already paid. This is due to the Australian Taxation Office practice of applying indexation to loans on 1 June but not processing loan repayments until after tax returns have been processed. Again, the Australian Universities Accord Panel has recommended that indexation be applied later in the year, after the compulsory payments that were made during the previous financial year have been deducted from a student's balance. This is a sensible recommendation that should be implemented as soon as possible.

And we must expand the Commonwealth prac payments to all students required to undertake placements as part of their studies. Currently, numerous degrees with time-consuming work placements are excluded from the payment, including many allied health degrees. Many of these professions, particularly across the health sector, are experiencing serious workforce shortages. They are critical sectors. As the Minister for Education has acknowledged, placement poverty is a real thing. In the words of the Australian Medical Students' Association, 'Nobody should be forced to make a choice between paying the bills and contributing to our healthcare system.' Without extending prac payments to all students that have to undertake them, we risk building a medical and healthcare workforce that is made up of a privileged few who can rely on the bank of mum and dad to get by.

For many students, undergoing their compulsory prac placement means physical exhaustion and financial and emotional stress. It means struggling to pay the rent and struggling to pay the bills. Students who visited Parliament House last week described how, despite needing to work to support themselves through university, they had to give up their part-time jobs to do prac placements. Added to this, some had to pay rent in two places or live in their cars, couch surf or drive hours every day to avoid the added accommodation cost. We are placing our young people in vulnerable, unsafe conditions and putting them under extreme financial distress. We are burning them out before they have even started working in their chosen career.

HECS and related student loan repayments are meant to make higher education accessible and fair, but today they generate more revenue for the government than the petroleum resource rent tax. Clearly, something is deeply wrong with the way we value education, opportunity and future generations. We must address the underlying drivers of escalating higher education debt which are deepening the intergenerational divide and worsening the cost-of-living pressures faced by young Australians.

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