Kate Chaney (Curtin, Independent) Share this | Hansard source

Before I speak about the substance of the Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025, I would like to make a comment about the procedure that is happening here. I think it sets a very, very dangerous precedent to pass the bill and then have statements about it as opposed to actually debating the bill in parliament before it passes. The purpose of speaking on a bill in this House is to inform the debate and inform members' decisions on how they are going to vote before the bill passes. That's actually the whole point of this House and the proceedings that happen in this House. I think there is a real precedent danger there. I would caution the government against being too cocky about the large majority that they have and changing the procedures in this place in a way that undermines the purpose of debate. I hope that we won't see that happening again.

On the bill itself, I commend this bill to the House. The bill implements a significant pre-election promise from the government and one that was likely a vote winner because it does directly affect millions of voters. In WA there are about 265,000 higher education debtors, owing a combined total of about $6.8 billion in student loans. In my electorate of Curtin, this bill will directly benefit 22,000 constituents. Given that about 70 per cent of HELP debt holders are aged 35 or younger, this is targeted at younger Australians, and I welcome that. This promise is a significant one-time debt relief measure for existing HELP and vocational loan holders, delivering immediate cost-of-living benefits to millions, and, for this reason, I will be supporting this bill.

But I would like to make it clear that this bill is mostly short-term economic stimulus and financial reprieve, rather than a sustainable overhaul of higher education funding or university affordability. In this term, I would like to see government go further for future students and take on the challenge of structural reform within university funding and address the burden that our kids and grandkids are taking on when they decide to embark on higher education.

What does this bill do? This bill is pretty simple. It allows the ATO to retrospectively apply a 20 per cent reduction to the balance of HELP debts as of 1 June. It will also increase the minimum repayment threshold to $67,000 in 2025-26. Compulsory repayments will only be calculated on the income above that $67,000 threshold, rather than the total annual income. That is an ongoing change that will benefit future students as well. It means that people will make smaller compulsory repayments and only do that once their income reaches a level where they can afford to do so.

Why was this needed? Cynically, this promise was made as part of an election cycle. But, non-cynically, this promise was made in response to a cost-of-living crisis where young to middle aged people were burdened by high education debts. It was an acknowledgement that older people who were afforded free higher education had an advantage over younger people who, since 1996, have been paying increasingly higher university and vocational training fees. As far as being a response to a cost-of-living crisis, it seems fine. According to the government, this bill will wipe $16 billion of student debt, which is about $5½ thousand off the average HELP debt of $28,000. Raising the compulsory repayment threshold could reduce repayments by about $1,300 a year for someone who is earning $70,000. That's more money available for people who are trying to make ends meet.

But, let's be clear, this bill doesn't make the most of the opportunity to address the generational inequity of rapidly increasing higher education fees. It's a short-term relief measure that doesn't tackle underlying issues such as escalating university fees, particularly those from the 2021 job-ready graduates reforms. Importantly, only current debt holders receive a benefit from this bill. Future students who take out loans later won't get any relief in the amount of debt that they owe.

What needs to be done? While I agree this is a good first step to reduce financial stress from university loans, I urge the government to be brave and bold in this term and focus on the heavy costs on younger generations. Our young people are grappling with rising HECS or HELP debts, as well as low wage growth, unaffordable housing, climate burdens and insecure employment. Anything we can do to try and reduce the burden should be considered, and, in this higher education sector, that could include reducing HELP debt for priority sectors like nursing, teaching and the care economy; increasing direct public investment in universities to reduce reliance on international student revenue; and encouraging research and development on the big issues that we're facing. It could include introducing free TAFE and low-cost undergraduate education, particularly for under-represented or rural students, and it could include reversing the job-ready graduates reform, which increased fees for humanities and reduced funding per student—and that's one which I think is a really important reform.

For this reason, I commend the member for Kooyong's second reading amendment which calls for the reversal of the Job-ready Graduates Package and to change the timing of debt indexation until after prepayments are made. It's clear that the Morrison government's Job-ready Graduates Package has failed. It's left some students, notably arts graduates, with extremely high debts, given that the cost of most of their courses more than doubled. These debts do not reflect these students' future-earning potential.

It also hasn't achieved its aims of diverting humanity students to other courses. One study using Universities Admissions Centre data concluded that only 1.5 per cent of university applicants changed their preferences from humanities to STEM and teaching because of the cost changes under the scheme. As it turns out, if you're a humanities student, you're unlikely to change your future path based on relative uni fees. The Universities Accord review recommended the scheme be scrapped, saying:

… the continuation of these current arrangements risk causing long-term and entrenched damage to Australian higher education.

I urge the government to act on this.

In conclusion, I give bill a B. Twenty-two thousand Curtin constituents will benefit. It recognises the challenge of education debt for young people and increases the threshold for payment, but it's mostly a one-off change. In personal terms, this is great for my first son, who's in his second year of uni, but will do nothing for the uni debt of my second son, who will be starting next year. We have to do more for future university graduates as well. It's a good response to the cost-of-living crisis, but in the education sector there's a lot of work to be done to make sure that we're an educated population and that we're not burdening young people with crippling debts.

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