Tuesday, 26 June 2018
Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018; Second Reading
I rise to continue speaking to the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018. We've come a long way in our attitude towards higher education in this nation. In my days at school, there was a predominant focus on trades and jobs that relied on learning in the workplace. But, over decades, there has been a shift in our way of thinking and in the way in which we learn. As well, many jobs that existed are no longer, and many occupations now available weren't dreamed of then. Since the 1950s we have seen the number of students attaining university entrance in Australia raise from 30,600 to a whopping 1.3 million. Over the last 70 years, more than 28 million people have graduated from higher education in this country, and our universities have produced some of the greatest minds in the world. As well as this, our universities rate with the best in the world. Currently, we have a range of higher education providers across Australia, including 38 public universities and four others which are classified as private, plus around 125 other institutions providing a variety of higher education services.
Our nation's universities were originally established to provide qualifications in professions such as medicine and law, as well as traditional liberal arts learning. This is very different to our broad selection on offer today, including courses for careers that weren't even thought of in my day. Included in this is something called 'gender studies'. Why a university would offer a course on gender studies but not the study on the history of Western civilisation I can neither understand nor support. That aside, I'm pleased to say that higher education in this nation is no longer just for the well-off. It is now a choice within the reach of everyone who works to get there. This is because the government subsidises course fees in our 38 public universities to an average of around 58 per cent.
Students supplied with a Commonwealth-supported place can their borrow their contribution, which is half the real cost of their education, until they have a sufficient income to repay it. With generous subsidies and student loans available to students attending universities, financial status is no longer a barrier to post-secondary study. However, there still exist barriers according to postcode, with a greater discrepancy of rates for students from rural and regional areas—I'll return to this point soon. That said, this parliament has a duty to ensure the money we lend to students to ensure their financial security is recognised as a debt to the people of Australia, and to require that it is paid back as soon as possible. With more than 3.8 million students enrolled in 9,444 schools across Australia today, we have an obligation to them and to those who will be born tomorrow to ensure that the scheme is sustainable, that their access to higher education in the future is assured. Already we have areas of skills deficits, and professions which rely on overseas recruitment. If our economy is to grow, especially in regional areas, we need to think about how we can skill our young people to meet these needs.
What we do need to do is ensure that the training they get is in line with what Australia's industries need, and this is not necessarily all provided by universities. We need skilled tradesmen and others to be well skilled across a range of occupations and industries, for productive participation in our economy. A university qualification should not be the only career pathway provided to young people. They need to see that alternative pathways are just as worthwhile and will lead to a good life. But, to do this, there need to be quality training alternatives available to them.
Over the past decades, the TAFE system has been progressively downgraded by governments as more students have opted for a university education in preference to the occupational training that TAFE offered. We now have to move to reverse this through a stronger TAFE system, thereby giving a real choice to our young people in training and career aspirations.
The people of Australia are currently owed $42 billion for student loans. I'll repeat that: $42 billion for student loans. That's 2.6 million Australians with an outstanding student loan debt. The debt would have been $48 billion, but this government wrote off $6 billion of student loans in the last year. This was a lesson about what happens when there is insufficient accountability for public funds. Under the then VET loan scheme, too many young people were tricked by shoddy operators into signing up to dodgy courses and ended up with a debt they were unaware they had to repay. Thankfully, compliance measures now in place should protect against this in the future.
The Productivity Commission estimates that the value of outstanding student loans will quadruple to $200 billion by 2025. Let's face it, that figure will effectively negate any surplus this government thinks it will have in coming in years. From 30 June 2014 through until 30 June 2017, the level of debt not expected to be repaid rose from 17 per cent to 25 per cent. That equates to about $1 in every $6 lent, or now $1 in every $4 lent.
In the banking sector, the Australian Securities and Investment Commission mandates responsible lending. This is determined by two specific questions: (1) has the lender made reasonable inquiries about the borrower's financial situation and their requirements and objectives? And (2) has the lender taken reasonable steps to verify that the consumer's financial situation supports their capacity to repay? To relate this to the student loan scheme, the questions to be asked are: is there a reasonable expectation that the student will successfully complete the course; and will this lead to getting a job?
I'm not convinced that this happens, and in some cases young people with low entry scores are being enrolled. That is, they're being set up to fail. On top of this, there are those undertaking studies which have little likelihood of leading to a paid job. It is in everyone's interests that students are required to meet the entry levels set for their chosen course of study before they qualify for a loan. This, in turn, gives a reasonable expectation that they will successfully complete their studies and go on to get employment in their chosen field. We have an obligation, not only to the students who want to borrow money under this scheme but to the taxpayers who fund it. When one in four students will never pay back the money they borrow, I question whether we are doing the right thing by our young people. And, at the same time, we are setting this loan scheme up for failure. I won't sit back and see it fail.
Pauline Hanson's One Nation will be supporting this Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018. I support the changes to rein in student debt under the scheme, but place on notice that I will be looking at ways that it can be further reduced. The new thresholds are well supported by facts. Those facts say that graduates easily have the means to start repaying their loans with an income of $44,999 or above. Remember, the bill proposes that at this starting level the required payment is only one per cent of their taxable income. That is only about $8 a week at the lowest income level.
According to the 2015 report released by Graduate Careers Australia, which details median starting salaries in various categories of graduate jobs, all but two categories will earn above the $44,999 starting income that the bill proposes, and these are 2015 salary levels. These include dentistry, optometry, medicine, education, earth science, engineering, mathematics, social work, law, paramedical studies, computer science, accounting, agricultural science, biological sciences, economics and business, physical science, psychology, veterinary science, humanities, social sciences, and agriculture and building. The lowest-paid graduate job category, art and design, shows a starting salary of $40,000 per annum. Every single one of these degrees will set graduates up with the prospect of a full-time job and the capacity to repay, at the very least, one per cent of the money borrowed to obtain their education. Let's remember that the earning potential of first-year graduates will only grow over time.
I want to comment on the second reading amendment by Senator Hanson-Young. This amendment claims that the government is cutting $2.2 billion from universities when it is not a cut but a freeze. I believe the freeze is warranted given the growth in funding to universities that we have seen in recent years, ever since they were given open slather in enrolling students regardless of their academic achievement. Sarah Hanson-Young's amendment also says that the bill 'makes students pay back more of their debt sooner'. No, they're not paying back more of their debt; their paying back their debt sooner. I expect nothing less from the Greens than a play on words, and not being really up-front and honest with the people.
So, yes, repayment of the student loan will start earlier, and so it should—as soon as income allows for it. I challenge anyone to say that $8 a week will be a hardship for someone who is on a taxable income of $45,000 a year. I'm sure they could go without a couple of coffees a week to pay back their obligation to the Australian taxpayer. I spoke earlier about salary levels for graduates in various professions—
I'm surprised: $8 a week is not much, considering that they've been given the taxpayer funding to further their education and to get better jobs and a better life. I think that's great for $8 a week. I don't think it's any imposition. As I said, they could go without a couple of coffees a week and pay back their obligation to the Australian taxpayer.
Senator Hanson-Young actually knows what it's like to pay back the debt to the Australian taxpayer, when it took her I think a year to pay back to the government the $15,000 or $20,000 that she owed the taxpayer because she overspent on her travel. So, she should understand what it is to pay back the Australian taxpayer when you do the wrong thing.
I spoke earlier about salary levels for graduates in various professions. Entry to these occupations and professions is by virtue of taxpayer funding. The student loan scheme in its various forms has given them a wonderful opportunity to pursue their chosen career path, and their loan should be repaid as soon as it is affordable to do so.
I mentioned earlier my concerns about the lower level of access to higher education by students from rural and regional areas compared to those from major centres. I believe that Australia is well provided for by universities which have campuses in smaller centres and regional cities, and I applaud them for their initiatives geared to the needs of students from those areas. However, more can and should be done for our rural and regional areas. I visit areas of my state and talk to people about their needs. In too many areas, population levels are falling. When this happens, it becomes a domino effect. When schools close and medical services are cut back, it becomes harder and harder to attract and retain people. Communities need these essential services, and they need the skilled tradespeople and workers to keep them viable. I want to see higher education and vocational studies geared more closely to the needs of individual communities, and our regional universities are ideally placed to do this.
In conclusion, the student loan scheme needs to remain viable so that kids in Queensland going through primary school today knowing that it will be there in years to come and that they'll be able to attend regional campuses like Central Queensland University, the University of Southern Queensland, the University of the Sunshine Coast and James Cook University—all of which are excelling in meeting the needs of our regions. I take my hat off to them for their efforts. Along with our other universities and higher education providers in Queensland, our young people have a real choice in tertiary education. The next step is to extend this choice through greater access to apprenticeships and vocational education and training.
I am on record as supporting a substantial increase to the number of apprenticeships and urge the government to do more to provide better support to small and medium businesses, particularly in regional areas, to take on apprentices and train our future generation of tradesmen and tradeswomen. As I said before, let's move to build up TAFE so that our children will have real choice—choice will allow them to contribute to and be part of a strong future Australian society. This way we will provide real work choice to school leavers and ensure Australia's future economic growth.
I, along with my Greens colleagues, oppose the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018. It should be self-evident from even the most cursory glance—and obviously any glance deeper than that—that this bill will impact most significantly on people on lower incomes. It will impact particularly the group of people on lower incomes who have undertaken higher education and training, which is exactly the sort of thing we encourage people to do. It particularly affects younger people, but it also affects older people who are trying to retrain, as they're continually told to do. The high priests of neoliberal fundamentalism that have been driving economic policy in this country since the 1980s demand exactly that of people.
We've got a rapidly changing economy and a rapidly changing workforce where different skills are needed, so you go out and retrain. But, if you go out and retrain, we'll charge you for it and then expect you to pay it back before you've even managed to earn enough to get yourself back on your feet. It's just putting one extra burden on top of another for people who are already amongst those who are struggling the most. That, unfortunately, is a description that applies so consistently to this government that you may as well just put it on play and repeat for pretty much every second piece of legislation—certainly anything that relates to economics in this place.
Last week, of course, we had massive tax cuts—big piles of money—made available to people on the highest incomes, and this week we have this government wanting to make more billions of dollars available to the biggest corporations. At the same time, the government want to push through legislation that will make people who are earning less than the median wage have to pay more if they've had the temerity to try and improve their education. Often it's a necessity to undertake education and training to try and get employment. We all hear it time and time again, the ridiculous mantra from the government benches. I heard it time and time again 10 years ago and 20 years ago: 'The best form of welfare is a job. What these people need to do is get a job.' But when they try to get training or to get an education to enable themselves to get a job, they get more debt. Now the government wants to force them to pay back that debt before these people are even earning enough money to get by as it is.
I am one of those—again befitting my literal greybeard role—from the era when university fees were not charged in the 1980s. It was in my final year at the University of Queensland that the Hawke Labor government brought in tertiary fees again. One of the great legacies of the Whitlam era, along with Medibank, was free tertiary education, which the Fraser government kept free. It was the Labor government, under the spell of the neoliberalism philosophy that is now so massively discredited, that introduced tertiary fees back in the late 1980s. It is a matter of folklore now that Mr Joe Hockey, who as Treasurer liked to talk about the 'end of the age of entitlement', was a student politician at that time in the 1980s. I remember how he protested against tertiary fees. So did I and many other people. Many people were spun the line, 'It's only a small amount,' and, 'You won't have to repay it until you're earning well above average wages, so it's completely fair and just.' Many people knew it was, quite rightly, a classic case of the thin edge of the wedge. And that is what we have seen ever since. The fees go up and up and up, the threshold at which you have to start repaying that debt gets lower and lower and lower. This is yet another stage in that process.
We all know that more and more people, particularly younger people, cannot access secure, permanent, full-time work. We all know how much more difficult that makes it for them, not just to get a loan to buy a house but also to get credit and loans to buy all sorts of things, to be able to get business loans and generate all those other different ways of trying to build a different way forward. When you've got that extra debt on top of it, it just makes it that much more difficult.
The Greens' policy is that we should be reversing this trend with regard to university fees, but the legislation before us is going even further in the wrong direction. With the tax cuts to big businesses and the massively wealthy people who run them, the current government is only going to increase the large wealth disparity that we see plaguing this country. This is another measure that will simply increase inequality. Surely all of us here now know that inequality is one of the major challenges, economic as well as social, facing this country.
An important factor of this legislation that needs to be noted is that it will impact more significantly on women. The lowering of this repayment threshold will be forcing 185,000 additional people to start paying back their fees earlier, when their income is below the median wage. Often, because they've undergone study, they've foregone the opportunity for a full-time income. It is almost impossible to have a full-time income and study full time. It is incredibly expensive to study with all of the extra costs associated with study apart from fees, so the vast majority of students, unless they happen to have wealthy families, are already in economic difficulties as part of going through that. That is fine if it provides the opportunity to come out the other side with greater opportunity to gain employment, but we all know, under the workplace laws that have been in place since Labor was last in government and the way they've now played out under the current coalition government, more and more graduates are finding it difficult to obtain jobs—certainly permanent, stable, full-time jobs. And even when they do find work, wages are stagnant.
The National Foundation for Australian Women found that the proposed changes will have disproportionately more negative impacts for young women attending university. They've stated that graduates caught between these policies will experience considerable financial stress. Graduates who are currently earning $51,000, more of whom are likely to be women, will have less disposable income than someone without a HECS debt earning $32,000. To reflect on the remarks of the previous speaker, who seemed to think that this should all be okay—'If people buy one or two fewer cups of coffee a week, they'll be fine to get by on $32,000 a year'—in any location where there are high housing costs, transport costs, caring costs, medical costs or the other challenges that so many people face, it is incredibly difficult. It will also negatively affect young mothers, in particular, who are already financially constrained by the costs of child care, and may be a further disincentive for them to enter the workforce.
For all the narrative that we hear from others in this place about the need to incentivise people to get a job, what we're actually doing is making it harder and harder for them, putting more and more disincentives in place, and continuing the regime of punishing the poor. As the second reading amendment from my colleague Senator Hanson-Young states, this is another indication of this government's war on young people and the poor. They are quite happy to hand out large amounts of money to their benefactors, to their corporate mates and to the wealthy while, at the same time, saying, 'We've got a budget crisis, so we've got to keep squeezing the poorest.' It's a stereotype, but it's so true. It is, of course, the easiest thing to do. It takes no courage to make changes that assist the wealthy and those that are already influential, but, as others have said prior to me, what does take courage is to make changes that support and assist those that are most in need. This parliament, time and time again, has its priorities very much the wrong way around, because these changes will indisputably make life more difficult for a specific group of low-income earners: people who have chosen or, in some cases, basically been forced, to undertake further or higher education or to upgrade, diversify or broaden their skills. We punish them further for trying to improve themselves.
We are in a situation where young people in hospitality and retail are having their penalty rates cut. They're having their incomes cut, yet some of those very same people, who are already struggling to get by, will now also be expected to be paying more on lower wages. These are young people who can't buy a house or who, if you're a student, certainly can't afford to rent a house unless they're doing it with a group of other people. Today I was talking to a young student named Gabby, who had just finished studying on the Sunshine Coast, about the immense financial challenge of getting through the studying process and coming out at the end of it with an enormous debt. Let's not forget the size of the debts we're talking about here. The previous speaker talked about it as though this is money that people owe the Australian taxpayer. Well, they do, unfortunately, but they shouldn't have to. People shouldn't come out of higher education or upgrading their skills with a massive debt. They certainly shouldn't have to repay that debt when their own income is below even the median full-time income. When they're low-income earners, we're expecting people to pay back a debt that they really shouldn't have incurred in the first place.
The whole argument—which has been shown over the years to be very flawed—that supposedly justified HECS was that people get an economic benefit out of being able to go to university. Certainly, some people very much do, but, if they get a higher economic benefit out of it, they should pay something back to the public through HECS fees. But we're now trying to force people to pay back it when they're not getting a higher economic benefit, when they're actually under the median wage and when they're a low-income earner. That is the bizarre logic that is trying to be applied here to justify squeezing more money out of people who are on low incomes.