Jonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | Hansard source

They say that in politics you don't come up with a solution until you've created the problem, and I suppose this is a prime example of exactly that age-old saying being well deployed here by the government. Of course, the legislation we have before us, the Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025, is a response to a situation that university students and those who have previously gone through higher education and accrued a debt will benefit from, but one has to look at the entire landscape of situations that Australians who have a HECS or HELP debt are facing and examine exactly what they're up against here. I think it is important to point out at the beginning of this debate that this response is only necessary because of Labor's cost-of-living crisis, something that they've failed to deal with.

Life is exactly the same as it was before the election now that we've gone through the election. People are still doing it tough. People are still struggling to make ends meet, be it whether they're able to pay their power bill, put fuel in the car, put food on the table or pay the mortgage. Those issues that beset Australian households and families ahead of the election remain exactly the same as they were, so I don't think it's any cause for celebration. I don't think we should allow people to be fooled into thinking that this will fix all of their woes because of the passage of this legislation. Let's not forget that the cost of health services in this country is up 13 per cent. The cost of food is up 14 per cent. Rent is up by 18 per cent, and insurance is up by 36 per cent. So, while it is great to have measures that assist some in our community and deal with some of the issues that individuals or households face, this does not deal with the causes, and it doesn't help a great majority of Australians. Solutions to a Labor induced problem—or one that's certainly been exacerbated by this Labor government—should not be celebrated. As I've already said, life before the election is sadly continuing on in the same pattern. As it was before, it is now. There's no reason to see some of the hubris we've seen on display from the government in relation to this and other matters.

As we know, the bill proposes a one-off upfront reduction of 20 per cent on existing HELP student debts. It will also see the threshold for repayments increase from $54,435 to $67,000 from the financial year 2025-26. There'll be a change to the repayment system based on marginal rates so that repayments are calculated only on the income an individual earns above the threshold, rather than the total income earnt by that individual.

Of course, this policy has been criticised by people other than the opposition. You only have to look at some of the economists who contributed to the debate after Labor announced their policy, including Ashley Craig, an economist who described this as 'exceptionally bad policy which favours the rich, doesn't help with current cost of living, and does nothing to encourage higher education'. Chris Richardson referred to is as a reverse Robin Hood, and Andrew Norton from Monash University said:

But it is a very expensive and poorly targeted program which delivers huge benefits to those with high debt, while delivering nothing to those starting next year and those who finished earlier.

That is an important point, of course. If you have a HECS debt or HELP debt at the point in time when this legislation passes, you will benefit, as I described before, but it doesn't do a great deal for those who start accruing a debt later on, although the repayment thresholds apply from this point in time onwards. I'll come to that a little later on.

Those experts I've referred to, those economists, are not voices we should dismiss. I think when it comes to the matter of indexation, we should also note that indexation on these loans will still be applied before repayments, meaning that debt balances will remain inflated despite what the government says this legislation will do. Because inflation has remained higher for longer under this government, the amount of indexation Australians have had to cop on their HECS-HELP debt has skyrocketed. Some analysis we had done by our own Parliamentary Library found that, in real terms, this 20 per cent wiping of debt that will occur under this legislation will amount to just a 7.9 per cent reduction for some HECS debt holders based on their debt from 2022, which I think does rather put this in perspective and again goes back to that original point I made earlier on. Don't come up with the solution until you've highlighted the problem or indeed made it worse, which is exactly what has happened under this government. I am sure others, my colleagues in particular, will talk about some of the impacts of indexation and what it actually means for debt holders.

In terms of the wiping of the debt, the 20 per cent that will be taken off people's debt, I think it is important to highlight that those with bigger debts will get more relief. Twenty per cent of $100,000 is $20,000, but 20 per cent of $10,000 is only $2,000. So those who have a bigger debt because of a longer period of education—generally speaking, those who will go on to higher paying careers like doctors, surgeons, medical specialists, barristers, engineers; those who have studied for longer and therefore accrued a bigger debt but who will earn more and have greater earning potential—will receive a bigger benefit than perhaps, for example, a social worker who might have a three-year degree in a much lower cost course that will benefit them far less. Unusually, they will benefit far less from this government's policy. That is something to take into account here. It isn't really something that a lot would describe as fair. Nonetheless, there is a benefit to many in our community.

The measure is not means tested, and it does not in any way favour those who have already gone to the lengths they have to repay their debts, including those who pay their HELP debts upfront. Andrew Norton from Monash says this policy treats the symptom rather than the cause of graduates' increasingly unaffordable debt obligations. It deals with the end amount that HELP debt holders have rather than the cause, which I think is a very important point here. As we know, all taxpayers will be paying for the debts of a few, rather than it being something that everyone benefits from.

In terms of the repayment mechanism and the lifting of the threshold, we do acknowledge that the change to the threshold and the fact that it applies to the amounts above those thresholds, the marginal rates, does smooth out repayments and brings the repayment method more in line with, say, personal income tax, but there are some negative implications. Lower debt holders will take longer to pay off their debts because they may find it harder to reach the new repayment threshold and get caught up in a loop of indexation increases over time. Parliamentary Budget Office modelling showed that a graduate with a low income—that is, 50 per cent of the average graduate income upon completion of a degree—will fall below the new minimum repayment threshold, and it will take them approximately eight years to pay off their debt. That will add approximately $21,467 to their repayments. This is one of those consequences that will perhaps need addressing and may not have been considered by the government in their pursuit of this policy—something that, I think, should not go without mention in this debate.

Frankly, though, we have to look at some of the broader issues facing our education sector. To provide relief to those who hold debts is an admirable thing. It's certainly something we've said we will not stand in the way of, as a coalition, and it's something that, I'm sure, some in our community will welcome—though, it's important to note, not everyone has welcomed it, as I've mentioned before. I think we owe it to students and to our nation to focus on more than just this component of the higher education policy, the cost and affordability of it. We can't be distracted by purely this. We have to look at what's going on with our results and standards. Australian universities suffered a 70 per cent fall in the QS global rankings recently. While we stand here talking about whether or not this bill is good policy and what it might mean for people, this issue remains unaddressed. I know that the government does have legislation coming in relation to the ATEC model they're looking to deploy. Hopefully that will contain some responses to that, but I will believe it when I see it. Short-term solutions should not be a distraction from the bigger problems here.

We've said we will deploy a constructive approach—given, as stated, this government did receive a mandate from the Australian people to do many things. It doesn't mean that we will be waving through legislation without scrutiny. We opposed this measure before the election. We remain concerned about elements of it. But, as stated, we will not be standing in the way of the passage of this bill. Labor promised that they would provide this relief to holders of debt. They've won the election, and we do not want to prevent Australians from benefiting from that.

It was interesting to have the commentary from the Minister representing the Minister for Education in this place over the last couple of days—the minister who has not yet engaged with the opposition on matters pretty central to her portfolio. She's more concerned about comments made by colleagues and where the opposition might stand. We've made our position pretty clear around not opposing this bill, allowing Australians to get the benefits of this legislation, while noting the concerns and hoping that the government will do more for all Australians who hold debt and more for those who want to get the benefits of a higher education system which achieves world-best standards, rather than declining standards. So I am concerned about the approach taken by the minister who represents the education minister in this place. It doesn't bode well.

When I compare it to the approach of Jason Clare, the Minister for Education and member for Blaxland in the other place, who has been incredibly forward leaning when it comes to working with the coalition on policy, on this bill and on other legislation. He's been only too willing to provide us with the information we've asked for. So I think and I hope—especially as we approach a far more sensitive debate on another matter—that we see from the Minister for Early Childhood Education a more measured approach than some of the things we've seen here during question time in relation to this matter. Because it is a serious issue—as I've said, we've heard nothing from that minister on the next debate we will be engaging in. That said, the coalition stands ready to allow Labor to have this bill passed. We will not oppose it, and, hopefully, Australians will benefit from it, but I'm sure a number of my colleagues will provide commentary on some of the issues that have been raised as concerns, some of which I've touched on already.