Louise Pratt (WA, Australian Labor Party, Shadow Minister for Environment and Water (Senate)) Share this | Hansard source

I rise to speak on the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018. We understand that this bill is part of the government's Mid-Year Economic and Fiscal Outlook, or MYEFO, package of cuts to universities and represents an attack on students with a savage $2.2 billion worth of cuts. Given its failure to pass its three previous packages, the government resorted to bypassing the parliament and inflicting a grants freeze on universities as well as changing Australia's world-class income-contingent loans program, HELP. The Liberals have only ever had one plan for university policy, and that is, I'm sad to say, to make cuts and make students pay more.

We know that if Labor had not worked with the crossbench and the community over the last 4½ years we would already have in this nation $100,000 degrees and students saddled with an absolute debt sentence. But just before Christmas the minister struck at universities by imposing a grants freeze. This decision, bypassing parliament, will effectively kill off the demand-driven funding system in our country. We've already heard from Universities Australia that the grants freeze will mean that 10,000 places will be underfunded in 2018 alone. For our nation this means that 10,000 Australians could miss out on the opportunity of a university education, just because the government wants to make budget savings. It is a rip-off. One of the greatest achievements of Labor's past period in office—and this is something I'm very proud of—was the demand-driven system. As the deputy chair of Universities Australia, Catriona Jackson, noted during the Senate inquiry into this bill, since 2008 Labor's demand-driven funding and equity participation scheme has been responsible for a 55 per cent increase in low-SES undergraduate student enrolments, an 89 per cent growth in Indigenous undergraduate student enrolments, a more than doubling of enrolments by students with a disability and a 48 per cent increase in the number of regional and remote students. These are opportunities that will transform their lives.

That is why this reckless grants freeze is so very mean. It will have very little impact on wealthier parts of the country but will hit our outer suburbs and regional areas the most. The northern suburbs of Perth and Western Sydney and the outer suburbs of Brisbane and Melbourne are the ones that will feel this cut. Universities in these regions, many of which have growth strategies in line with economic and population growth, will have to turn away some of our best and brightest young people. We in Labor want a strong, vibrant higher education system with well-resourced universities. That's why the Leader of the Opposition announced as part of our commitment to the sector that Labor would reinstate a demand-driven funding system when we are next in government.

This bill also seeks to make changes to Australia's world-class income-contingent loan scheme. It was the reforming Labor education minister, John Dawkins, who introduced the scheme, then known as HECS, the Higher Education Contribution Scheme, in 1989, drawing on the expertise of Professor Bruce Chapman to design a fair system of student contributions. We understood that to expand our higher education system from a small elitist model to a broad high-participation model, we needed to broaden the funding base. Labor believes that it is appropriate that students who gain a personal benefit from a university qualification make a contribution to the cost of their degree. But, in the three decades since HECS, and now HELP, was introduced, the Liberals made numerous changes to make it much less fair. In fact, Australian students now make the sixth-highest contribution to the cost of their university education compared with other OECD economies. As we saw during the inquiry into the bill, the President of the National Union of Students, Mr Mark Pace, said the most recent data reveals that two-thirds of Australian students live below the Henderson poverty line and one in five students regularly skips meals. He reminded the committee that student life is not the lifestyle that people choose. Young Australians are going to university to get the skills and knowledge they need for the careers they want and need, and we in this place should be supporting them and not saddling them with debt and more stress.

This bill proposes to lower the HELP repayment threshold to $45,000, with a one per cent repayment rate and a further 17 thresholds and repayment rates up to a top threshold of $131,989. It would change how thresholds are indexed, moving away from the average weekly earnings to the consumer price index. This is a recycling of the proposals from last year's budget, where the government failed to lower the HELP repayment threshold to $42,000.

It is clear to us that budget savings are driving these policy changes. Labor thought at that time that $42,000 was too low, and we think $45,000 is still too low. After all, $45,000 is only $9,000 more than the minimum wage in our nation. On average, graduates are taking 4.7 years to find full-time work—that's incredible, isn't it?—and Australians earning $45,000 are spending, on average, around half their income on rent. We also know that the Department of Education and Training hasn't done nearly enough work to determine how the proposed changes to HELP repayments intersect with our tax and social security systems.

When you talk to young people in this country, it is clear they are facing significant pressure and that the government policies are certainly not there to support them—be they the government's championing of unfair negative gearing, which locks young people out of the housing market, or the cuts to penalty rates, which hit the pay packets of more than 700,000 Australians. If this bill were to pass, an Australian earning $45,000 would be slugged another $450 because of this bill. Many students who already work while they study will have to start paying back their HELP debt before they graduate.

I go to a note on this bill in relation to its impact on women. As the ACTU said in their submission about this bill, 60 per cent of Australians with a taxable income and an outstanding HELP debt are women and the number of women affected by the HELP repayment threshold lowering will be double that of the number of men affected.

Senators—through you, Mr Acting Deputy President—if Australia is to exploit the challenges and opportunities of the Asian century, we must boost participation in post-secondary education. As the Mitchell Institute has said, the majority of jobs created in 2020 will require a post-secondary qualification. About half of these will need to be university level and the other half vocational. The government's policies simply build barriers to participation in post-secondary education.

The other major change in this bill is a new lifetime loan limit on how much students can borrow under HELP. This is a significant change to the system. Currently there's no limit on how much a student can defer if they are in a Commonwealth-supported place, and there are restrictions on the amount students can borrow for full-fee places. We support the principle of a borrowing limit that can send a price signal in the education market. Labor did not oppose the government's amendment to change the proposal from a one-off limit to a renewable limit, although we still believe that there may be a range of unintended consequences from this proposed change.

Labor understands that, in this period of immense change, we need to encourage Australians to continue to update their qualifications throughout their working lives and that we should be encouraging lifelong learners. That is why Labor has always supported a system where students can borrow to fund further study. Increasingly, students will need to take a mix of education options from both higher education and vocational education. This is why we are concerned about how a renewable borrowing limit might operate.

The rising cost of higher education in our nation has been highlighted during the inquiry into this bill. We've heard evidence from students and universities about the cost of full-fee qualifications. We're very concerned about the rise of qualifications that go over the current FEE-HELP limit, and we've heard many examples of courses with fees of over $100,000. A large number of students in these programs have to find ways to pay the gap between the fees set by the university and the current FEE-HELP limit. This simply isn't good enough. We will not accept that universities have to come up with bursary schemes or simply rely on their students having access to family support for these fee gaps. The last thing Labor wants to see in this country is the rise of commercial, American-style student loans. That will devastate students, who already face so many challenges.

This bill does not do enough to address reckless high-fee setting. While Labor accepts that some courses are expensive to teach—things like medicine, dentistry and vet science—we do not want these students taking on many mountains of debt. Experts have told us that lower-income students are much more debt averse than those from higher-income thresholds, and that debt is a barrier to taking on a university qualification.

In February, Labor's shadow minister for education and training, Tanya Plibersek, along with our shadow minister for skills, TAFE and apprenticeships, Senator Doug Cameron, and our shadow assistant minister for universities, Terri Butler, announced that a Labor government would conduct a once-in-a-generation inquiry into Australia's post-secondary education system. We know that if we're going to take advantage of the challenges and opportunities of the future that we need a TAFE system that's fit for purpose. Never before have TAFE and universities been looked at together in a national inquiry. This must be done.

We want to ensure that our universities have stable funding and can respond to our rapidly changing economy and society. The funding stability in universities contrasts sharply with that of TAFE, and Labor's inquiry will make sure that we have two great systems for the future. As Terri Butler said so well in her contribution to this bill, we want to see kids from poorer backgrounds going to uni as much as we want to see rich kids choosing TAFE as well. We know we can't grow these systems by cutting them.

In conclusion, as Catriona Jackson, Chief Executive of Universities Australia, said:

… the first principle—the first thing you must keep in your mind when you're changing this fundamentally important scheme—is to do no harm.

As we said in our dissenting report, Labor believes that the changes in this bill do not pass the 'do no harm' test.

I note that this principle is something in which Senator Martin used to believe. In March, he said he would not support any cuts to education and would oppose the changes to HELP repayment thresholds in this bill when he said that any cuts to the HECS-HELP repayment thresholds would, in effect, be a disincentive to students—especially those from lower socioeconomic backgrounds—from undertaking study to improve their prospects in life. Labor agrees with the old Senator Martin. The old Senator Martin knows how much the changes in this bill would be a disincentive to Tasmanians wanting to get a diploma or higher education. The old Senator Martin knows that we can't boost participation in post-secondary education by erecting barriers.

This bill is about finding money for the government's tax give-away, to give to the big banks. We've been proud to stand with universities and students against the government's repeated attacks. Access to education is the great equaliser in our country. We will continue to ensure that every Australian, regardless of their background, can access the education and training they need. I urge the Senate to join Labor in opposing this bill. I seek leave to continue my remarks.

Leave not granted.