Senate debates

Tuesday, 27 March 2018



3:46 pm

Photo of John WilliamsJohn Williams (NSW, National Party) Share this | | Hansard source

I give notice of my intention, at the giving of notices on the next sitting day, to withdraw business of the Senate notices of motion Nos 1 to 4 standing in my name for 28 March 2018, proposing the disallowance of the Broadcasting Services (Technical Planning) Guidelines (Consequential Amendments) Instrument 2017 (No. 2), the Radiocommunications (Spectrum Licence Allocation—Multi-band Auction) Determination 2017, the Retirement Savings Accounts Tax File Number Approval No. 1 of 2017 and the Migration Agents (IMMI 17/047: CPD Activities, Approval of CPD Providers and CPD Provider Standards) Instrument 2017. I seek leave to make a brief statement.

Leave granted.

When these instruments were received by the parliament they had been incorrectly classified and were, therefore, incorrectly tabled as exempt from disallowance. Following correspondence with the relevant ministers, the committee concluded that the instruments were misclassified due to administrative errors and the classifications were corrected. The committee's final comments on these matters are in Delegated Legislation Monitors 15 and 16 of 2017.

The committee is concerned that such errors can hinder the effective oversight of instruments by parliament. This is because, during the period an instrument is incorrectly listed as exempt from disallowance, senators lose some or all of the 15 sitting days available to them to give a notice of motion to disallow the instrument. For this reason the Senate Regulations and Ordinances Committee gave notices of motion to disallow each of these instruments, thereby providing senators with an additional 15 sitting days to consider them. The committee is now withdrawing those motions but remains concerned about the classification of instruments generally and will continue to monitor this issue.

3:47 pm

Photo of James McGrathJames McGrath (Queensland, Liberal National Party, Assistant Minister to the Prime Minister) Share this | | Hansard source

I give notice that, on the next day of sitting, I shall move:

That the provisions of paragraphs (5) to (8) of standing order 111 not apply to the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018, allowing it to be considered during this period of sittings.

I also table a statement of reasons justifying the need for this bill to be considered during these sittings and seek leave to have the statement incorporated in Hansard.

Leave granted.

The statement read as follows—



Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill

Purpose of the Bill

The bill introduces measures that will improve the sustainability of the Higher Education Loan Program (HELP) by setting a new minimum repayment threshold and adjusting subsequent repayment thresholds, changing indexation arrangements for repayment thresholds, and setting a limit on the amount of tertiary education assistance a student may borrow.

The bill will also amend repayment thresholds for the Student Financial Supplement Scheme (SFSS) from 1 July 2019 to align them with HELP repayment thresholds. To ensure that the HELP changes do not adversely impact SFSS debtors, existing repayment arrangements will be retained for 2018–19 and SFSS debts would no longer be recovered concurrently with HELP debts.

Reasons for Urgency

Passage of the bill in the 2018 Autumn sittings is essential so that new HELP repayment thresholds can commence on 1 July 2018. This will avoid confusing HELP debtors by having a second change to repayment thresholds in the space of a year and provide adequate notice to debtors and affected agencies.

The Budget Savings (Omnibus) Act 2016 lowered the minimum repayment threshold for HELP debts to $51,957 in 2018-19, with a two per cent repayment rate. This bill introduces a lower repayment threshold of $45,000, with a one per cent repayment rate. The threshold set by the Omnibus Act becomes the second threshold. Each further threshold is six per cent higher than the previous one, with repayment rates rising in half per cent increments. In future years, thresholds will be indexed not by reference to Average Weekly Earnings as is currently the case, but by the Consumer Price Index.

The bill also introduces, from 1 January 2019, a new limit on the total amount of tuition assistance that can be borrowed through FEE-HELP loans (including FEE HELP, VET FEE-HELP, and VET student loans). The limits will be set at $150,000 for students undertaking medicine, dentistry and veterinary science courses (leading to professional registration) and $104,440 for other students.

From 1 January 2020, there will be a combined HELP loan limit on the total amount of tuition assistance that can be borrowed through HECS-HELP, FEE HELP, VET FEE-HELP, and VET student loans. That is, HECS-HELP loans will reduce a person's HELP balance from 2020 onwards.

In addition, from 1 January 2020, the total loan balance will become renewable, such that any HELP debt repayments that a person makes during a financial year (starting 1 July 2019) will be subsequently re credited to their loan balance. This will enable them to take out further HECS-HELP, FEE HELP, VET FEE HELP, and VET student loans to the same amount. That is, a person's HELP loan balance will be renewed by HELP debt repayments, but it cannot exceed the relevant loan limit.

Changes to HELP repayment thresholds and rates, and the amount of debt that a student can accrue, will affect all those who take out HELP loans (including VET Student Loans, Trade Support Loans, Student Start−up Loans and loans under the discontinued Student Financial Supplement Scheme). In turn, this affects several agencies including the Department of Education and Training, the Australian Taxation Office, the Department of Human Services and the Department of Social Services, as well as higher education providers. These agencies and loan providers require lead time to implement systems changes and communicate with students and debtors about how the changes affect them.

Put simply, measures that can improve the sustainability of student loans are vital. This bill contributes by ensuring more HELP debtors commence repayment, even at low rates, reducing overall debt not expected to be repaid. It will also ensure that high income earners with HELP debts repay their debts faster.

Passage of this bill will make a significant contribution to achieving fair and reasonable reform of the Higher Education Loan Program so that it has a more sustainable future.

(Circulated by authority of the Minister for Education and Training)