Alicia Payne (Canberra, Australian Labor Party) Share this | Hansard source

Yesterday this parliament delivered on a promise we made to students, to young people, to workers retraining for the future and to every Australian who took on a student loan and pursued an opportunity. This bill, the Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025, is the first piece of legislation that was introduced into the 48th Parliament, just as the Prime Minister said it would be, and I am so proud that this was a key priority for us in the new parliament. This bill is about fairness; it's about making our student loan system more just, more affordable and more humane; and it's only happening because the Australian people put their faith in the Albanese Labor government on 3 May. More than three million Australian will see their student debts cut by 20 per cent overnight, and this includes 22,126 people in my electorate of Canberra. For someone with an average student debt, which is now around $27,600, that's a reduction of over $5,520. For someone with a $50,000 HELP debt that's $10,000 wiped away. That's a real relief for young people who feel like the system was working against them.

Canberra is a university town. My electorate is home to five university campuses, and this bill will make a huge difference to the students who have studied in Canberra's universities, who are now contributing to our local economy as graduates. Importantly, this cut will be backdated to 1 June this year, before indexation kicked in. We know how much anxiety the annual indexation of HELP debts caused for students and graduates across the country. That's why this year our government capped indexation so that it will never outpace wage growth again. This is so important.

This legislation goes even further. We are fundamentally reshaping how the repayments work. Under the current system, once you've earnt above the threshold—currently just $54,435—you start paying a percentage of your entire income. That can be punishing. For someone earning just over the threshold, it's like falling off a cliff. We are raising the minimum repayment threshold to $67,000 next year and indexing it to wages. Repayments will be based on what you earn above that threshold, not your entire income. That's a fairer, more progressive system. Let me give one example. Right now, someone earning $70,000 pays around $1,750 a year in HELP repayments. Under our changes, that same person will pay around $450, a saving of $1,300 every single year. That's money for rent, for groceries and for saving for a home. That's the kind of relief that we need in a cost-of-living crunch.

This is not just a Canberra issue, but it matters deeply to my community. We are home to a large number of public servants, early career professionals and students—many of them carrying student loan debts—and it's something they talk to me about often. This bill will lift that weight. It's also a boost for women, who are more likely to take time out of paid work and more likely to carry their student debts for longer. And it isn't just about uni students. These reforms also apply to vocational education students and some apprentices. Labor values education in all its forms, not just what happens in lecture theatres, but in TAFE, in trade schools and on job sites. These reforms are just one part of a broader coherent vision for higher education. We've locked free TAFE into law, with more than 650,000 enrolments so far. We've introduced paid prac placements for teaching, nursing, midwifery and social work students. We've expanded FEE-FREE Uni Ready courses to give more people, especially those from disadvantaged backgrounds, a pathway to university, and we've established an independent Australian Tertiary Education Commission to drive long-term reform and equity across the sector.

Finally, we've listened to young Australians and first-home buyers, who told us that student debt was locking them out of the property market. That's why the Treasurer worked with APRA and ASIC to ensure that HELP debts are treated fairly in loan assessments. Income-contingent loans should never have been treated like other loans when applying for a mortgage. When you apply for a mortgage, lenders assess how much you can borrow by calculating your debt-to-income ratio. This ratio compares your total debts to your income, affecting your borrowing capacity. This is obviously a sensible to do because we don't want people borrowing money they can't afford to pay back, but unlike credit card debt or personal loans HELP repayments depend solely on your income, not the outstanding loan amount or interest rates. This means that HELP doesn't behave like traditional debt. It's income contingent and doesn't fluctuate in response to changes in the cash rate.

We've changed the rules so that HELP debts don't impact mortgage serviceability assessments—no more punishing people for taking on debt to improve their future income chances. I had one particular constituent raise this issue with me before this change was made. It was something I raised with the Treasurer. I actually saw her the other night, and she has been able to be approved for a loan. She hadn't been able to before that because of her substantial HELP debt, so this is really making a difference to people's lives.

We believe in a society where education is not a privilege for a few but a right for all, where no-one is held back because of their postcode or their bank balance. Those opposite have called this bill elitist—what a load of rubbish. It just shows their attitude to universities and higher education, which they do so consistently. Young people have consistently told us that they feel the system is stacked against the. It costs far more to get into the property market. Degrees cost significantly more due to the policies of those opposite when they were in government. This bill is about letting those young people know that we hear them. We see them. They are the future of this nation. This bill delivers fairness, it delivers opportunity, and, as I've said, it delivers relief to over 22,000 people in my electorate.

I've paid off a HECS debt too, and I remember the pressure that that put on me as a young person and the concern that I had about whether I would ever be able to save for a home et cetera. I'm lucky that when I was at university the debts were nothing compared to what they are these days. When I talk to young people, I can really understand their concern about the huge debts that they are now incurring when they study.

Back in 2008 when I was a researcher at NATSEM I actually authored a report on HECS and the impact it was having on young people, called What price the clever country? As part of that, I had the great opportunity to work with Professor Bruce Chapman, the architect of HECS. He created this scheme, always envisaging it as a fair and equitable scheme. It was more about allowing the opportunity for more people to study and be able to pay the loan back in an equitable manner. I know that he is very welcoming of these changes because, even back then in 2008, he had concerns about the way the HECS system was going, that it wasn't delivering in the fair and equitable way that it was originally designed to do and that it had lost its way in many senses.

It actually is a system that enables people who have studied. As our report back then showed, this does on average have a significant impact on improving lifetime incomes. But that shouldn't mean that it's absolutely crippling to pay back debts as a young person when you are trying to establish your career, your life outside of work and what that might mean for your ability to enter the housing market or consider things like starting a family. I know that Bruce Champman welcomed these changes, and these are excellent changes. I'm excited that we are doing this with urgency as part of a new government and excited about what this will mean for the young people in my electorate and all around the country.

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