Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

The Minister for Education constantly justifies the increase in the HECS-HELP repayment on the basis that graduates earn, on average, 75 per cent more than people without a university degree. But this research is flawed in two ways. Firstly, he talks in averages rather than means and in this research averages can be distorted by a small cohort of very high income earners.

More importantly, the figure predates the introduction of demand-driven funding. Today, the Minister for Education predicted an additional 80,000 higher education students per year.

The market forces tell us what will happen: as there are more graduates, the income differential between those with and without tertiary qualifications will decrease as having a university qualification becomes more common. Almost certainly because of this the government has incorrectly estimated how quickly graduates will be able to repay their loans and the impact of the higher interest rates on them.

Yesterday I asked the Group of Eight university representatives what the impact would be of this very considerable increase in the number of graduates on their incomes. They could only refer to research in the UK, where a rapid expansion in the number of graduates is beginning to impact on that differential income, driving graduate wages down. If we are basing our system on a differential we need to understand that that will remain in place. (Time expired)