Mehreen Faruqi (NSW, Australian Greens) Share this | Hansard source

I move Greens amendment (1) on sheet 3371:

(1) Page 33 (after line 22), at the end of the Bill, add:

Schedule 3 — HELP debt indexation to account for withholding amounts

Higher Education Support Act 2003

1 Subsection 140-5(1)

Omit "is worked out by multiplying", substitute "is the sum of".

2 Paragraphs 140-5(1)(a) and (b)

Repeal the paragraphs, substitute:

(a) the amount (the person's base debt for the financial year) worked out using the method statement in this subsection; and

(b) the person's *indexation amount for the financial year (see subsection (1A)).

3 Subsection 140-5(1) (example)

Repeal the example.

4 After subsection 140-5(1)

Insert:

(1A) A person's indexation amount for a financial year is the amount worked out using the following method statement:

Example: Tom is studying for a Bachelor of Laws and Bachelor of International Relations. On 1 June 2024, Tom had an accumulated HELP debt of $15,000. He incurred a HELP debt of $1,500 on 31 March 2024. He made a voluntary repayment of $525 on 1 May 2025. Tom lodged his 2023-24 income tax return and a compulsory repayment amount of $3,000 was assessed and notified on his income tax notice of assessment on 3 September 2024. Between 1 July 2024 and 30 May 2025, Tom had a total of $4,000 withheld from his salary in relation to the collection of compulsory repayment amounts in accordance with section 154-70. Assume for the purposes of this example that the HELP debt indexation factor for 1 June 2025 is 1.030.

To work out Tom's base debt for the 2024-25 financial year (before indexation on 1 June 2025), first work through the method statement in subsection (1):

Step 1: Take the previous accumulated HELP debt of $15,000 on 1 June 2024.

Step 2: Add the HELP debt of $1,500 incurred on 31 March 2024.

Step 3: Subtract the $525 voluntary repayment made on 1 May 2025.

Step 4: Subtract the $3,000 compulsory repayment assessed on 3 September 2024.

Steps 5 and 6: Do not apply because since 1 June 2024 Tom had no amendments to any assessment.

Tom's base debt before indexation on 1 June 2025 is:

($15,000 + $1,500)—($525 + $3,000) = $12,975

To work out Tom's indexation amount for the 2024-25 financial year, work through the method statement in this subsection:

Step 1: Take Tom's total withholdings of $4,000.

Step 2: Given Tom's total withholdings do not exceed his base debt, subtract all of the total withholdings of $4,000 from the base debt of $12,975 for a base debt less withholdings amount of $8,975.

Step 3: Subtract 1 from the HELP debt indexation factor of 1.030 for a result of 0.030.

Step 4: Multiply the base debt less withholdings of $8,975 by 0.030.

Tom's indexation amount for the 2024-25 financial year is:

$8,975 x 0.030 = $269.25

Therefore, Tom's former accumulated HELP debt in relation to his accumulated HELP debt for the 2024-25 financial year would be the sum of his base debt and indexation amount as follows:

$12,975 + $269.25 = $13,244.25

5 Subclause 1(1) of Schedule 1

Insert:

indexation amount has the meaning given by subsection 140-5(1A).

6 Application provisions

The amendments of the Higher Education Support Act 2003 made by this Schedule apply in relation to working out a person's former accumulated HELP debt in relation to the person's accumulated HELP debt for the first financial year to start after the commencement of this item and later financial years.

Let us be clear that student debt cannot be fixed, because student debt really shouldn't exist. The same goes for indexation. It is not a flaw to be tweaked but a fundamentally unjust mechanism. Unfortunately, the Labor government, despite its commanding majority, doesn't have the courage to pursue the ambitious reforms that are needed. But, hopefully, they can support the Greens with this bare-minimum amendment to address a glaring unfairness in calculating indexation.

This amendment changes the way indexation is calculated on student debt, because applying indexation to a debt that has already been repaid is plainly unreasonable and unjust. Repayments must be properly counted before any indexation is added. This amendment changes the timing of indexation and offers a modest but meaningful shift towards fairness. I call on the government and others in the chamber to support it.