Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Hansard source

Well, Senator Henderson appears to be debating last year's bill, not the bill that is in front of the chamber today. Last year, before the election, we fixed how HECS indexation was done. We made it the lower of the CPI and the wage price index. I know Senator Henderson has a different proposal now, which is not supported by her own party. This is a proposal that Senator Henderson might have taken to her party and to the chamber last year when we passed our legislation to fix HECS indexation. She is debating a bill from the previous parliament, not the bill that we have in front of us today. We have fixed HECS indexation, in terms of making sure that it's the lower of the CPI and the WPI.

In addition, Senator Henderson makes claims about inflation and how inflation is running. If her three per cent measure were applied today, of course, it would be higher than inflation. When we took office, inflation had a six in front of it. Because of the measures that we've put in place over a sustained period of time, inflation now has a two in front of it. As I understand, Senator Henderson is trying to prosecute both legislation and economic debates from the previous parliament. She's doing that in an apparently friendless way, in terms of not having the support of her own party for the measures that she is putting forward.

We are really proud that we have a bill in front of us today that does exactly what we said we would do before the election. Before the election, we said we would wipe $16 billion off the debt of three million Australians, and that is exactly what this bill does today. For a person with an average HECS debt of around $27,000 this bill will save them $5½ thousand. It will wipe 20 per cent off their HECS debt. We said that we were going to do that, we took that to the election, the Australian people voted for it, and that is the legislation that we have in front of us today. This is legislation that reduces people's student loan debt by 20 per cent, an average saving of $5½ thousand.

In addition to that, we are making the way in which HECS debt is repaid better and fairer. We are raising the minimum repayment threshold from around $54,000 to around $67,000. The purpose of that is to allow students to earn a reasonable wage before they have to start repaying their student debt. We want people's higher education to start paying off for them before they have to start paying off their HECS debt. At the same time, we are also reforming the marginal repayment system, meaning that people will repay their HECS debt calculated on only the proportion of income that is above that threshold—the $67,000 threshold—rather than their total annual income. These are the measures that are actually in the bill that is before us today.

This is a bill that does what it says on the label. It cuts student debt by 20 per cent. It provides an average saving of $5½ thousand per year for the average HECS debt of around $27,000. It makes the repayments fairer by raising the minimum repayment threshold to $67,000. And it also reforms and introduces a marginal repayment system, meaning that repayments are calculated on the proportion of income above the threshold rather than someone's total annual income. Under that measure, the reform in relation to the marginal repayment system, someone earning $70,000 a year will have their compulsory repayments reduced by $1,300 a year—from currently $1,750 down to $450. So this is really significant reform. In addition to doing what we said we were going to do and wiping 20 per cent off student debt, we are also making the way in which people's loans are repaid better and fairer.

We are doing that because we know that student debts are a significant burden on young people in Australia today. That's why we took this measure to the election, alongside a whole series of measures to provide cost-of-living relief to Australians. We know that people in their 20s, who are starting out in life, are just setting themselves up in life. It might be a time in life when they're thinking about buying a house. It might be a time in life when they're thinking about starting a family. It's a time in life when they're embarking on their careers. We know that too many young Australians are weighed down by the debt that they have, and that is why we took this measure, a 20 per cent reduction in student debt, to the election.

During the election campaign, when asked, 'What is the first thing that this parliament will do and will consider?' the Prime Minister said that HECS debt relief would be our first piece of legislation. And here we are today, in the Senate, ready to pass this bill, a bill that will cut student debt by 20 per cent, a bill that will give a person with an average HECS debt a $5½ thousand saving, a bill that will also improve the way in which repayments are made by making sure that people earn more before they have to start paying their debt back. The new minimum repayment threshold is $67,000 a year. At the same time, people's repayments will be calculated just on the income that they make above the new threshold of $67,000. So we are doing exactly what we said we were going to do. We said we would wipe 20 per cent off student debt, we said it would be the first thing that we would do, and that is exactly what we have in front of us in the chamber today.

And, of course, the HECS system is a really proud Labor legacy that has helped so many Australians go to university. We want a sustainable HECS system that allows us to continue to support more students to go to university and have the benefits of higher education. One of the improvements that we are making with this bill is to reform the marginal repayment system, meaning that the way in which your repayments will be calculated will be on the proportion of income above the new repayment threshold. That is a reform that has been welcomed by the architect of HECS, Professor Bruce Chapman, who said it was the most significant reform since HECS was introduced.

We know that we need more Australians to get the benefits of tertiary education. When HECS was introduced, a very small proportion of Australians actually had a tertiary education. Our government wants more people to have the benefits of tertiary education and the opportunities that it brings. These reforms to HECS will help students. These reforms will help young Australians with the cost of living and help them repay their HECS debts as well. And, of course, we are committed to more Australians being able to get the benefits of university by having a sustainable HECS system. The HECS system was introduced by a Labor government and is being improved by a Labor government. We are doing exactly what we said we would do before the election, and that is cutting $16 billion of debt on top of the $3 billion that we already cut in the previous term.