Daniel Mulino (Fraser, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

It's with great pleasure that I rise today to speak in support of this measure to reduce student debt by 20 per cent. This issue featured prominently in the election in my electorate. I was approached by many people in support of this policy, particularly young people, of course. We promised that this would be the first bill that would be introduced to parliament this term after the re-election of the Albanese government, and that's exactly what has happened.

The Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 will make education more accessible and income contingent loan programs fairer and more affordable. This bill reduces by 20 percent student loan debt that was incurred on or before 1 June 2025. It increases the minimum repayment threshold from $54,435 in 2024-25 to $67,000 in 2025-26. It ensures that people have more money in their take-home pay by smoothing out the time and the pace at which they have to repay debt.

This will have an impact across the broader community as well as in my own electorate. Three million Australians will see their debt reduced by 20 per cent. The average student debt is $27,600, and this legislation will cut that debt by around $5,250. But of course that's the average. There are a significant number of people who have more debt than that, and they will benefit by an even larger amount.

In my own electorate of Fraser, an enormous number, 28,000 people, will benefit from this policy. This assistance will reduce debt, thereby helping with cost of living and enabling more home loan applications. On that issue, I'd like to reinforce the point that complementing this policy in terms of the debt reduction itself is the fact that we as a government have pledged to make it easier for people who have student debt to enter the housing market, by asking regulators to review lending rules. That work is now complete. This will complement the debt reduction in a very important way. APRA and ASIC have finalised guidance that the Treasurer requested in February.

Specifically, that includes guidance from APRA which means there have been amendments to guidance to banks so as to remove HELP debt from debt-to-income reporting and also to clarify that it may be reasonable for banks to omit HELP debt from serviceability assessments where a borrower is expected to pay off their HELP debt within 12 months. ASIC has also updated its regulatory guidance to acknowledge the income-contingent nature of HELP repayments. As I said, these measures will complement the debt reduction and will help thousands of students and graduates across the country who have invested in their education and who now want to invest in their homes.

I want to compliment the Treasurer on his work on this and say that this is a very important additional set of measures. I also note that this bill is part of the broader strategy of the Albanese government to make education more accessible and fair for young people. This builds on the significant work we did in our first term. We established a Commonwealth prac payment to support eligible nursing, midwifery and social work students while completing their practical training. We established free TAFE, a policy that has already seen more than 650,000 students training in important careers like construction, aged care and cybersecurity. And in visits to TAFEs across my electorate I've seen incredible outcomes for students. They're given opportunities for lifetime careers through those measures. We've changed the way HECS is calculated, meaning that it is based on the wage price index or the CPI, whichever is lower. Those indexation changes are an extremely important affordability measure. And we invested $90.6 million to boost the number of skilled workers in the construction and housing sectors.

We took this policy to the election, but I must note that a number of members opposite called it 'profoundly unfair' and said that Australians would see little benefit from this policy. Well, that's not the judgement that Australians made and certainly not the judgement that young Australians made. Could I also cite an expert—indeed, many would say the father or the architect of HECS—Bruce Chapman, who supported this important legislation. He said changing the income repayment threshold is the most important thing that has happened to the system in 35 years. So this is a very important reform—a key reform for young people, for graduates, for people in tertiary education—and, as I said, complemented, importantly, by a number of housing measures.

This change will be implemented by the Australian Taxation Office. Those with HECS debt need not do anything. They will receive a text message when the ATO has completed the work at their end. This will take awhile to process, but once it's done people will get that text message and know that their debt is down by 20 per cent. Once the legislation is passed, the 20 per cent HECS cut for all of those who have a HECS debt will be locked in.

This is one of the key measures that was discussed at the last election. As I said at the beginning of my contribution, this was a policy that featured very prominently in my interactions with people throughout my electorate. It was something that young people felt was very important. It is a measure which increases the affordability of their income-contingent loans but also, when complemented by the measures that the Treasurer ensured would be in place through ASIC and APRA guidance to banks, a measure which helps people with housing affordability. This bill enables young Australians who are building the nation's future to have a better chance to have a home loan, while also providing real cost-of-living help with more money in their pockets.

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