Andrew Giles (Scullin, Australian Labor Party, Minister for Skills and Training) Share this | Link to this | Hansard source

'A huge weight off my shoulders', 'opening up new opportunities', 'every penny helps my savings'—now, these aren't my words; they are the words of some TAFE students who joined me recently to talk to me about what student debt relief means to them. This is real cost-of-living support, helping students with those week-to-week costs and helping them save for the rent, a home deposit or whatever it is that is their dream.

But, beyond that, this is something that is continuing to break down barriers. Through this measure, through this bill, the Albanese government is sending a really strong signal to Australians, particularly but not only young people, so that everyone can see that accessing education and training is possible, that pursuing a new career needn't be only a dream but is something that can be tangibly reached.

In our first term, the Albanese government wiped $3 billion of student debt through changes to indexation, putting this money back into the pockets of students and apprentices right around the country. We listened to students, who were telling us that cutting student debt made a real difference to their lives. So we didn't stop there. Last year, in Sturt, the Prime Minister announced that a re-elected Albanese government would introduce as our first piece of legislation a 20 per cent cut to student debt for students in universities and for students in the VET sector, too. We listened to students, and now we are delivering.

I want to recognise the fantastic work of my friend Minister Clare, the Minister for Education—the work he's done to put this bill before the House, to show that we are delivering to those students and to thousands like them right around the country. This is of course the first bill presented to the parliament by the re-elected Albanese government.

The bill also underscores our government's commitment to making tertiary education more accessible. This is a wide-ranging commitment, of course, because it sits alongside measures such as free TAFE—almost the last bill legislated in the last parliament—alongside our critical apprenticeship incentives and of course alongside paid prac. It means that more women, more First Nations Australians and more people from our regions can get the skills they want so they can do the jobs we need—secure, long-term, well paid jobs in industries like construction, the care economy, manufacturing and technology. By cutting student debt, the Albanese government is taking pressure off more than three million Australians who have a student debt loan, including nearly 300,000 students in the VET sector, whose debt will be reduced by half a billion dollars. That is three million Australians right around the country—including, of course, more than 20,000 students and apprentices in my electorate of Scullin.

During the election campaign I heard from so many community members—again, particularly young people—about what the 20 per cent cut to their student debt meant to them. With this bill there are additional measures. We're also increasing the repayment threshold to $67,000 in 2025-26. This means, for example, that someone earning $70,000 a year will have around $1,300 less in repayments.

As the Minister for Skills and Training I'm particularly proud of what this legislation means for students in the vocational education and training sector. I've been travelling to TAFEs right around the country, meeting with students and apprentices to hear about how government can better support them. I've seen firsthand how many of them have leapt at the chance to undertake a free TAFE course. On the basis of the latest data we know there've been more than 650,000 enrolments in free TAFE. We also know that free TAFE is producing results, with more than 170,000 course completions, seeing more Australians heading towards work in critical industries. And now these students, these apprentices, will be benefiting from student debt relief, too. Students with Australian Apprenticeship Support Loans and those with VET student loans will benefit—nearly 300,000 of them.

On 1 June 2025, apprentices with these student loans had $1.22 billion of loan debt, while students with VET student loans had around $1.6 billion of student debt. Now, as a result of our 20 per cent student debt cut, around 244 million of Australian Apprenticeship Support Loan debt and $317 million of VET student loan debt will be removed. For an apprentice with the average-size loan, $9,000, the debt relief they'll see will be $1,800, while debt relief for someone with the average VET student loan of $11,000 will be $2,200.

These loan programs have made further study and training possible for hundreds of thousands of Australians. They've enabled students and apprentices to pursue high-level training, including in courses that address the needs our country is facing and of course creating better employment outcomes and opportunities for them. In manufacturing, our government continues to drive forward a future made in Australia. In the care economy, we are developing reforms across aged care, health and early childhood education to support communities and ensure that they have the services they need. In housing, too, we are boosting the pipeline of housing construction workers to build the new homes Australians need. In science and technology, we are putting Australia at the forefront of global innovation and developing solutions for the modern world. Not only is this of benefit to students; we know how much Australian businesses and the economy benefit from the skills these graduates bring.

I very recently met with some students from CIT here in Canberra who very generously shared their stories with me. Jennifer has a $40,000 student debt across both HECS and VET. She told me: 'I am relieved I will be saving around $8,000. It makes such a huge difference. I feel a huge weight off my shoulders, and I really feel like I can focus on finishing my course and getting into my industry.' Ralph is undertaking a Diploma of Nursing. As a result of this legislation, he will save $3,000. Ralph's looking to continue his journey to become a registered nurse. He told me that having more money back in his pocket will make a big difference. Izzy is set to see $2,000 of her student debt cut. For someone who has gone to TAFE to follow her passion for interior design, she feels like the government is supporting her to pursue her dream. Lauren told me she is trying to save for a home and that the student debt cut she will receive will get her a little bit closer to that goal. Elliott was pleased that they would receive a student debt cut on top of seeing wages rise for early childhood educators and free TAFE too.

This is just a snapshot of the nearly 300,000 students and apprentices in the VET sector who will benefit from our government's student debt relief. It's clear to the students that this will make a really tangible difference in their lives. It's recognition from our government that we want to support students and apprentices to pursue new opportunities through TAFE and help set themselves up for their future and our future too.

Very shortly after the Albanese government was first elected to office we brought stakeholders together in a jobs and skills summit. Alongside employers, unions and civil society, we are continuing to work to address what we inherited, which was the worst skills crisis in 50 years and the second-worst of any advanced economy. In our first term, we followed this by putting TAFE back at the heart of the VET system, delivering now more than 650,000 free TAFE places to address critical skills shortages and offer more people the opportunity to get ahead through training. These vital skills are now being deployed in industries like construction, hospitality, health and aged care, cyber and manufacturing. At this point, the very start of our second term, this bill, which will deliver a 20 per cent cut to student debt, will help expand opportunity to those who have traditionally been denied it while critically delivering immediate cost-of-living relief. I commend the bill to the House.

Kate Chaney (Curtin, Independent) Share this | Link to 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.

Jo Briskey (Maribyrnong, Australian Labor Party) Share this | Link to this | Hansard source

I'm very proud to rise today in support of the Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025, a crucial piece of legislation that will support three million Australians with student debt. This legislation was a key Labor promise, and I am excited that my first speech on legislation in this House is on this piece of legislation, something that will directly benefit over 25,000 people in my electorate of Maribyrnong. This bill is about supporting everyday Australians, relieving cost-of-living pressures and making tertiary education more accessible for all. It removes a significant barrier to those seeking tertiary education who otherwise may be deterred by the rising costs associated with such an endeavour.

I take you back to February 2003, when I first walked onto campus. I had the very good fortune of achieving a tertiary education, and I still recall the date that I finally paid off my debt as such a relief. But the reality is that now it is harder. It is harder for our students in terms of both the cost of qualifications and, more broadly, the cost-of-living pressures that we're under. In fact, both tertiary education and vocational education lead to good, well-paid jobs, an integral part of our economy, and therefore we must do all we can to make it more accessible for everyone.

Student debt often leads to sacrifices everywhere, like homeownership, seeking important healthcare and every other daily cost-of-living pressure. While student debt affects many in our community, it disproportionately affects young Australians. By cutting all student debt by 20 per cent, we are making a significant investment in the future of all young Australians. We're cutting student debt by more than $16 billion. This is on top of the $3 billion we wiped off of HELP debt last term and the changes we made to the indexation, ensuring that student debt will never increase faster than the growth rate of wages.

What is also great about this legislation is that it will make repaying student debt fairer. Currently, if you make over $54,435 annually, you pay a percentage of your entire wage towards your student loan. Under this legislation, the minimum income threshold will be raised to $67,000. Further, you will be paying only a percentage of the income you make over that $67,000, so, if you're making $70,000 a year, you will be paying only $1,750 each year. Essentially, this legislation will not only immediately help Australians but also help them to prosper in years to come by changing the current system that is unfairly based on their entire income. What's also important to reassure my electorate about is that this legislation is clear that the cut will be backdated to 1 June 2025, before the increase due to indexation. That means that indexation will only be applied to your total student debt after the 20 per cent cut has occurred.

As a proud Victorian, from the education state, I know that this legislation will have an immediate impact. In fact, over 800,000 Victorians have student debt, totalling $23.2 billion. The average reduction from this legislation will be $5,755. This is huge. Throughout the campaign, I doorknocked every suburb in Maribyrnong and saw the excitement many had when we discussed this policy. This is not surprising, because in my community of Maribyrnong, as I said, nearly one in four have a student debt. The reactions of those I spoke to were those of optimism and relief along with the positive reassurance that, after a decade of being ignored by the previous coalition government, Labor was campaigning to take action on the issues that disproportionately affect younger Australians.

These are life-changing reductions, and everywhere you turn in my community there are stories that speak to how important this legislation is. There is John from Strathmore, who studied teaching at Victoria University and is now a social studies teacher at a local school in Airport West. John is a local who has made the most of our higher education system and is now giving back to his community in the invaluable field of educating our children. In doing so, he has amassed a student debt of over $27,000. But, thanks to this legislation, he'll be saving over $5,000. These changes will also decrease John's future repayments, leaving him with more money in his pocket.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

Order! I do apologise, Member for Maribyrnong. Statements on this topic are interrupted in accordance with standing order 43. We will now move to 90-second statements.