Monday, 9 November 2015
Education Legislation Amendment (Overseas Debt Recovery) Bill 2015, Student Loans (Overseas Debtors Repayment Levy) Bill 2015; Second Reading
I rise today to speak to the Education Legislation Amendment (Overseas Debt Recovery) Bill 2015. The bill before the chamber will increase the capacity of the government to collect outstanding debts from the Higher Education Loan Program and the Trade Support Loans program from those living, working and travelling overseas. According to the May budget, this bill is expected to raise approximately $26 million over the next four years.
Personally, I am pretty sceptical about the ability of this measure to raise even the pitiful amount of revenue that has been projected, requiring, as it does, the self-registration of foreign residents and overseas travellers. Even with the punitive regime that this bill requires, with the tax office potentially hovering over anyone who fails to sign up before going on a backpacking trip around South America or South-East Asia, I have much less hope than the government at the revenue-raising possibilities involved here. However, even if these projections of potential revenue turn out to be correct, the Greens would not support this bill. Not only is it evidence of a government with distorted priorities but it is poorly crafted and it contains some serious procedural problems that we will seek to amend.
The first reservation that the Greens have with this bill is the requirement that those with existing HELP or TSL debt who are intending to travel overseas for more than six months after the commencement of the bill have only up to seven days to register with the Australian Taxation Office. Failing to comply with this would amount to a failure to comply with the Taxation Administration Act, with a roughly equivalent punishment. Additionally, foreign residents with assessed worldwide income above the repayment threshold must pay an amount equivalent to the repayment that they would make if they were an Australian resident. The government has entirely put the onus on the individual to not only be aware of their responsibilities in this bill but also assess whether they are in fact over the assessable worldwide income. It is a bit onerous to expect people living overseas to keep up to date with the happenings in Australian politics.
These measures place a huge burden of awareness of their responsibilities on foreign residents and travellers. Given the weight of the failure to comply with these responsibilities and the seriousness of the potential penalty—I understand it to be up to 50 penalty units—the Greens believe that this would be better served by creating or altering currently existing mutual tax agreements that we have with other nations. Half of Australia's university graduates working overseas are in only five countries. It is 60 per cent of graduates if we include Hong Kong and China. Identifying and receiving payment from these individuals via tax treaties would be a far fairer and more effective method of getting this money, should the government choose to pursue it. It would certainly be fairer at least than requiring the individual—many of whom would not know about this reform—to register with the tax office and then, in turn, requiring the commissioner to follow up on all of these foreign residents around the world. It sounds like a hugely onerous exercise for all involved. The Greens do understand the difficulties of altering existing tax treaties with other nations, so I will be moving a second reading amendment to this effect. The government should, at least, investigate the feasibility of this course of action before proceeding with this new tax regime.
A second problem that the Greens have with this bill is that it violates the no-retrospectivity principle. When current foreign resident HELP and TSL debtors moved and began their lives working overseas, they did so with the understanding that no mandatory HELP or TSL repayments would be required—at least that has always been the arrangement that has operated in this country. So for many, especially those at the middle of the income range or right at the edge of the repayment threshold, they would have made major life, family or financial decisions within a specific budget. I think we all recognise that a university qualification is not necessarily a ticket to riches. Indeed, many people at the point of the repayment threshold are still living in financially difficult positions. That is particularly the case overseas. Requiring them to now repay their debt, which could be upwards of $2,000 per annum, may cause instances of financial stress. It is concerning when that is being applied to people who do not anticipate that coming down the line.
The Greens' committee stage amendment would mean that all foreign residents with current HELP and TSL debt accrued prior to the commencement of this bill—should it pass today—would be exempt from their income assessment and repayment requirements. Only HELP and TSL debt from courses enrolled in after the date of beginning would be relevant for current foreign residents. Given the benefit of warning, future foreign residents would also be required to pay back their HELP and TSL debt should they be required to move after the commencement period. Although the Greens still have significant problems with this bill, it would certainly be an improvement on what has been proposed by the government.
At the root of our opposition to this bill is a bafflement at this government's priorities—warped priorities they are indeed. The tax office found in 2011-12 that over $60 billion was moved from intra-party transfers to related entities in tax havens—$60 billion. Even if we were to assume that only 0.1 per cent of this, a tiny percentage, could be captured by the Australian corporate tax system, it would still amount to $60 million per annum, compared to the paltry $6.5 million per annum from this bill's projected revenue in the forward estimates.
The question is: why on earth is this government pursuing university graduates so hard yet it is unwilling to move on multinational corporates? Why is the government wanting to hassle students about their gap year yet leaving corporate entities untouched? Why is the government continuing to pounce on the most vulnerable members of our community rather than asking those with the wealth and the means to pay their fair share? These are questions that the Greens will continue to pursue. The government has a huge source of potential revenue at hand, not only with regard to corporate tax evasion but via reforming the superannuation system, negative gearing, capital gains and fossil-fuel subsidies. Of course, it is reluctant to go down that path, but, when it comes to slugging students, they are always fair game for the Liberal Party. The Greens will continue to point out the punitive nature of the government's revenue strategy of going after the poor and the politically weak while letting the rent seekers and the rich get off scot-free. That is this government's modus operandi and this bill is an extension of that agenda.
The Australian Greens remain committed to a universally free, accessible and world-class education system. This extends from early childhood to primary and secondary school and right up to tertiary education and training, whether that be at university, at TAFE or via an apprenticeship. The right of every individual to the education and training they need to be self-actualised citizens is essential to our vision of a fair, just and future-looking society—and the Greens will always stand up for that vision. The Greens do not support a further expansion of the HELP system that leads to tracking down overseas debtors and, because of this, we do not support this bill. However, we do believe that our amendments today could improve certain aspects of the bill as it stands, taking the onus off the individual, who, as always, is lumped with further bureaucratic requirements and responsibilities, and taking the pressure off those expats who have already made significant life decisions based on the current regime. I move the second reading amendment on sheet 7788 standing in my name:
At the end of the motion, add:
", but the Senate calls on the Government to use existing mutual taxation agreements to assist in the identification of foreign residents and overseas travellers required to repay HELP or TSL debt, rather than require those residents and travellers to comply with changes in Australian law.".