Tuesday, 26 June 2018
Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018; Second Reading
As I was saying last night, the government is increasing transparency for students around admission requirements and course cut-offs. We are working to give students better information about their choices. We are funding rural and regional hubs and regional scholarships, and we're having Universities Australia and Professions Australia work together to improve arrangements for student work placements. We are not increasing student fees. We do, however, think that we should hold universities to account for student outcomes, given the significant taxpayer funds they receive—something Labor also opposes. We also think that universities, like non-university providers, should not be able to charge students whatever they like because taxpayers and students will pick up the tab irrespective of how inefficient they are. Providers need to think of the product and the service they are providing students for the significant taxpayer investment they receive.
The Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018 will set a new schedule of repayment thresholds for HELP from 1 July 2018 with a lower minimum repayment threshold of $45,000 at a one per cent repayment rate—up from $42,000 proposed in last year's budget—and with smaller incremental rises in thresholds and repayment rates, up to a top threshold of $131,989, at which 10 per cent of income is repayable. It will align the indexation of the repayment thresholds to the consumer price index. From 1 July 2019, it will bring repayment thresholds for the Student Financial Supplement Scheme, managed by the Social Services portfolio, into line with HELP repayment thresholds and make corresponding changes to the order of repayment of student loans. It will also introduce a refreshable, new combined loan limit on how much students can borrow under HELP to cover their tuition fees. The combined limit is $150,000 for students studying medicine, dentistry and veterinary science courses and $104,440 for other students. We heard and read in the media today about the importance of that, given that some 'serial students', as I think the minister has categorised them, have racked up debts large enough to pay for an apartment, let alone higher education. While the loan limit is not new, it will now apply to Commonwealth supported students borrowing through HECS-HELP as well as fee-paying students accessing FEE-HELP, VET FEE-HELP and the VET Student Loans scheme.
HELP lending has grown rapidly, with the expansion of the demand driven system. The amount accessed for HELP loans has increased from just $3 billion in 2009 to $7 billion in 2016. The Turnbull government shut down Labor's failed VET FEE-HELP loan scheme at the end of 2016 and replaced it with the VET Student Loans scheme. This is a much more tightly controlled scheme with caps on tuition accounts and extensive safeguards against reporting by unethical providers. The fiscal challenge for the government is that HELP repayments have not kept pace with HELP lending growth. From 2010-11 to 2016-17, the level of new debt not expected to be repaid increased from 16 per cent to 25 per cent. It is no longer possible to ignore the long-term burden of this debt on the taxpayer.
Schedule 1 of the bill proposes a new set of repayment thresholds commencing from 1 July this year. There is a new minimum repayment income of $45,000 at which one per cent of income is repayable, amounting to around $8.65 per week. The second threshold is $51,957 with a two per cent repayment rate, which would otherwise be the first threshold rate on 1 July this year. Each progressive threshold increases by six per cent income amounts and by half a per cent increments in repayment rates, which smooths the repayment obligations. Importantly, this new schedule of thresholds will also reduce incentive for debtors to 'cluster' below thresholds to avoid repayments as they do now. This came out very clearly in the Senate inquiry. There are increased repayment rates for those earning the highest incomes, who are best placed to repay their debts sooner, with those earning $131,989 or more paying at 10 per cent of their income, as I said earlier.
From 2019–20, the revised HELP thresholds will also apply to SFSS debts under the Social Security Act 1991 and the Student Assistance Act 1973. Currently, these debts are repaid concurrently with HELP debts but according to a subset of just three thresholds. To improve rates of repayment of SFSS debts, and to achieve consistency in debt administration, the current three-tier threshold approach applied to SFSS repayments will be replaced with the full range of HELP thresholds. There will be a transitional year in 2018-19 that maintains the three-tier threshold arrangement, while systems changes are implemented, and to allow these debtors additional time for transition.
Schedule 1 of the bill also implements new indexation arrangements for the HELP repayment thresholds, which are currently indexed according to average weekly earnings. For a number of years now, the HELP repayment thresholds have been rising relative to earnings. The higher growth in AWE, average weekly earnings, has meant that people have dropped from a higher repayment threshold to a lower one, or have dropped out of the repayment stream altogether as the thresholds rise faster than their income growth. This bill provides that the minimum and all subsequent thresholds will instead be indexed to the consumer price index. This will ensure repayment requirements are adjusted in line with the cost of living. It also streamlines indexation factors used throughout the Higher Education Support Act 2003, as all amounts will be indexed in the same way.
Schedule 2 of the bill amends the order of repayment of student loan debts by loan type. Currently, student debts under the Social Security Act 1991 and the Student Assistance Act 1973 are repaid concurrently with HELP debts. I realise I have repeated myself there, so please excuse me.
Schedule 3 of the bill provides for the expansion of the loan limit to all HELP loans for which students can defer their tuition fees but makes it replenishable. The Senate committee inquiry which I chaired received evidence that a replenishable loans cap was preferable to a lifetime limit, and that was the recommendation to the government from the majority report of the committee. I'm pleased that the government has accepted that amendment, which it introduced in the House of Representatives and which was subsequently passed.
The new $150,000 loan limit for students undertaking medicine, dentistry and veterinary science courses, as defined in the act, is an increase on the estimated current FEE-HELP limit of $130,552 for 2019. Students in these courses who had previously reached their FEE-HELP limit will, from 2019, have access to additional funds up to the new $150,000 limit. Apart from annual indexation increases, the loan limit applying to students in other courses remains the same, with a base amount of $104,440 in 2019. The caps will be increased in 2019, but new replenishable combined loans caps arrangements will not start until 2020.
The measures in this bill are fair. They are modest but, over the longer term, they will ensure that the world-class income-contingent loans program remains sustainable for future generations of students and taxpayers. We have a system that is the envy of the world, and Professor Bruce Chapman is a man in demand around the globe as others seek to emulate the system that we have. Australian government funding is now at record levels, and it is important that we continue to ensure that Australians from all walks of life, irrespective of their background or financial means, can continue to access high-quality tertiary education if they have the aptitude and the application to succeed. That's why I, like my colleagues across the government, want to ensure we keep these opportunities open to future generations.
In making a contribution to the debate on the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018 I want to welcome the government's attention to the importance of reform in the higher education sector. I understand that this bill goes some way to reforming the HECS and FEE-HELP schemes, but there is a broader discussion and debate that we need to have in this place about the benefits of university education for a number of students. I recognise also that we've had the vocational education and training scheme, and there have been some significant reforms in that nature.
Our university system has become almost effectively a degree mill. That concerns me because there are many students who have the expectation placed upon them by society, their schools, their parents or themselves to get a degree from a university which doesn't equip them with a financially valuable skill when they graduate, some years down the track, indoctrinated in some respects by the university ethos and kudos, but they have a higher education scheme bill and are left pursuing rather menial tasks that are completely outside their training and education. That benefits no-one. The government, the public assume, by virtue of the fact that they fund it, will be accruing tens of billions of dollars worth of higher education debt, but much of it won't be repaid. As much as 25 per cent in some instances won't be repaid. We're talking about a significant amount of money—$15 billion, $16 billion or $20 billion over the next 10 years will never be repaid.
So I congratulate the government on their attempts at redressing some of the imbalances in the scheme, because, if you don't recognise that there's a problem and you don't try and fix it, you're never going to have a hope of improving the current situation. University education is not servicing all our students and our younger people as effectively as it should. Postgraduate outcomes are critically important. Meaningful reforms in this sector should incorporate a report and a very frank disclosure about how many graduates from a particular university, in a particular discipline, have obtained jobs within a certain time frame of graduating from that institution. It would produce some accountability. It would mean that universities don't just pick the cheapest degree to provide—let's say it's a law degree, for argument's sake—and graduate hundreds of students who all expect a glittering legal career and are unable to find work in that sector. That is but one example. We have numerous other examples in the sociology and social studies space. They have very little prospect of gaining meaningful employment outside of a tiny little cabal, which is not really adding to the productive nature of our society.
These things may be contentious. I don't think they are. I think many parents recognise it as common sense, and I know that many graduates lament the fact they have incurred a rather large and substantial debt and yet have no real meaningful employment prospects enhanced as a result of it.
There's also another gratuitous imbalance in the system, which I will be moving an amendment seeking to reform. That applies to the four private universities in this country: Bond University in Queensland, Torrens University in South Australia, Notre Dame University in Western Australia and New South Wales, and the University of Divinity, which is based in Melbourne. These four privately funded institutions not only don't benefit from taxpayer subsidies for each enrolment; the students who choose to go to these institutions are penalised for doing so. They're penalised with no real justification. The penalties are quite significant. Effectively, what it means is that, if they are accessing HELP fees to the tune of say $60,000 in order to get their educational qualification, the government slugs them with a 25 per cent loading on those fees simply because they've chosen not to pursue a publicly funded university place.
I understand this was introduced in around 2006 by the Howard government. In going back to understand why, I found very little rationale or explanation other than it was the vibe at the time that this should take place. Since then, I've had conversations with a number of individuals about it, and the rationale has moved down the path to, 'These are going to be accumulating higher HECS debts for individuals that are attending them'—HECS is my terminology; it's HELP and HECS now—'by virtue of the fact they're more expensive to go to, so the government will be financing a larger loan, so there should be a penalty.' This is a nonsensical argument, because it doesn't take into account the subsidies that go into universities already. It doesn't account for the fact that, for example, in Bond University a student can get through their degree in two years because they have an accelerated program that the student, who has learnt a financially valuable skill—I note in yesterday's Australian Financial Review that the private universities had higher satisfaction and better outcomes for job placement than most others—they will get into the workforce at an earlier stage and they will begin to be able to repay their debt at a later stage.
As for the concept that the fees, and hence the borrowings, attached to private institutions are somewhat higher, yes, the fees are higher, because there are no subsidies taking place there. There's not a $20,000- or $30,000-per-student subsidy that has been injected into the university to maintain the sandstone. These are privately funded institutions.
The government, might I also say, charges the interest rate that it determines applies to all student loans, irrespective of the amount. We know from media reports as well that there are students out there who have obtained hundreds of thousands of dollars in HECS debt and HELP debt by becoming perpetual students, and that, I'm sure, doesn't pass the commonsense test. What does pass the commonsense test, though, is for the government to effectively introduce a cap on HECS and slash outstanding HECS and HELP debt of, I think, $104,000, which is in this bill. It also entirely negates the justification for this loading on private universities. The loading on private university students was justified, as I said, because the fees they were going to be accumulating would be higher. Well, in the end, the only amount of borrowing that a student can undertake at any single time, with one or two exemptions—we understand that—is around $104,000. Whether you pay $60,000, $80,000 or $90,000 for your degree, or whether you do two degrees, whatever it is, the most you can get is $104,000 outside of the medical sciences. I have no dramas about a loading, perhaps, for private institutions in medical sciences. I don't think it should exist, but, if a degree at Bond University in medicine could cost upwards of $500,000, one has to question whether the taxpayer should be on the hook for that. That is a decision to be made. But the principle is the same. By capping the fees, you undermine the very argument for a 25 per cent loading.
In the interests of full disclosure, my son is a scholar at Bond University. This contribution to the debate is not driven by self-interest at all, apart from the fact that I pay his fees there. He's not using HELP or accessing HECS because we're very fortunate that there's no need for him to. But it was his enrolment there, the engagement with it and the discussions I had with him about this that marked the inequity of the system.
There is an attractiveness about the private university system for many students. I've talked about the accelerated education so you can actually do a degree in two years. You do three semesters per year, you have minimal breaks between them and there are three 14-week semesters rather than two 14-week semesters or thereabouts. I'm decidedly impressed with the commercial nature of it. They explore a great many things, but everything is oriented towards practical, real-world skills in the area in which they will graduate. If that is in law, they're practising their mooting skills, discussing real-life cases or assisting in particular areas. Everything I've learned from my son's explanations to me demonstrates that there is a truly valuable skill that is coming down the pipeline, rather than just theoretical knowledge—which has its place in higher education, in research and academia, but that's not what he was seeking from a university degree.
I understand it's the same at Torrens University. This is not an ideological bent. For those on the other side of the chamber who don't share my conservative leanings or perhaps my sense of fiscal responsibility, I make the point that Torrens University in South Australia is part of a global network of universities which, I think, was launched and certainly celebrated by no less a left-winger, if I can put it like that, than Bill Clinton.
Private universities have their place. They are just another option for children and students in our country to make a decision about, and I don't think they should be penalised by government simply for opting into a system that is not state sanctioned or state run. I've been on the record many times as saying that I think the university system is becoming a bit more of a closed shop, where freedom of speech, freedom of thought, freedom of ideas and the battle of ideas are no longer as relevant as they once were. It seems that few are willing to defend in this space what we have always tolerated or accepted. They're just students. They have differing views. But now we see students who were campaigning for the 'no' campaign being attacked and vilified simply for having that view. We have seen pro-life organisations on campus. We have seen pro-conservative organisations on campus. We've seen people penalised—and I just spoke about it in my podcast today—
Yes, Senator Hanson-Young. You can tune in actually.
Senator Di Natale interjecting—
Yes, you can. You can go to iTunes—I'll just make that point—and look for the Weekly Dose of Common Sense. It's entirely free and commercial free. The Greens do cop a bagging on it every single week. Senator McKim features a lot. Senator Hanson-Young, of course, is very unpopular with my listeners, so we mention her quite a lot. But I digress.
We have a circumstance where places like Curtin University—it was reported to me today—are penalising students for using gender-specific pronouns. They're not bringing those sorts of things in. It is like an indoctrination of children. I think parents and all students need to be able to have a choice about where they want to go in that respect.
In the end, I welcome the opportunity that every Australian has to enter into a competitive decision with respect to the university that they choose to attend. I also welcome the fact that they may choose not to attend university. But what I will be proposing—and I will be moving this amendment in the committee stage and I will look for the support of the chamber—is to remove that impediment, that barrier, that tariff, if you like, for those children who do choose to attend a private institution who then seek to avail themselves of what many in this place celebrate as the opportunity that should be provided to every student, and that is accessing funds in order to finance their degree in an advantageous manner. We've accepted, rightly or wrongly, that a very low-interest rate loan, effectively a market-neutral loan, repaid out of future earnings is the way forward and is an equitable measure for people to finance their tertiary education and studies. Applying a 25 per cent loading on top of that, plus the interest, I do not think is in anyone's best interest.
More specifically about this bill, I do agree that lowering the threshold at which repayments are meant to be made is very important. If it were left to me, I would suggest that one per cent of income is probably not enough. I would prefer, of course, to lower taxes across the board for everyone and then expect people to make a higher repayment schedule as they get into the earnings market. I make the point that, in New Zealand, about 10 per cent of income is quarantined to pay for university education, from the very first dollar earned or thereabouts. It's much the same in many other places around the world. We are not reinventing the wheel here. I'm just trying to make it fairer and more reasonable and balanced, mindful of the new university environment that is springing up around the country. I think competition in this space and options for people are very important, and government should facilitate that freedom of choice, without imposing an arbitrary penalty on people, which has, from my research, very little justification for being.
I rise to speak on the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018. Labor opposes this bill. It's an unfair piece of legislation. This MYEFO package of cuts is the government's fourth attempt since coming to office to cut universities and make students pay more. At last year's budget, they tried to make students start repaying their HELP debt when they started earning as little as $42,000. Now they're proposing a new rate of $45,000. It's still too low.
Labor believe the current repayment rate is about right. We don't want to make students repay their debts when they are starting a career, saving for a house or trying to start a family. We know that higher student debt is a genuine barrier to study for low-SES and disadvantaged students. We should be doing all we can to increase participation in higher education and not making it harder. Experts warn that, if Australia does not boost participation in postsecondary education, we risk being left behind the rest of the world. Indeed, Universities Australia Chief Executive, Belinda Robinson, said:
Universities will be moving resources around, they'll be looking at other programs they can perhaps close down, campuses they can close … anything they can do to hold on for 12 months. There will be adverse consequences.
In a time of significant economic transition, we should be investing in our people and not making it harder to get a university qualification. It's pretty clear that the government has only ever had one plan for higher education: cut and make students pay more. Australian students already make the sixth-highest contribution in the OECD to the cost of their degrees, but the Liberals can't help themselves. They have consistently tried to make students pay more. Why? All to pay for their $80 billion tax cut. They've even given themselves a $7,000 tax cut. We've seen it in schools: a $17 billion cut. We've seen it with vocational education and training: nearly $3 billion cut. And more than 140,000 apprenticeships and traineeships have been lost since the Liberals came to office. Again, we've seen it with the universities: a $2.2 billion cut.
I'd like to take this opportunity to share a story about the harsh reality of the impacts of these cuts. One of my constituents left the Territory to move to Canberra to study at the Australian National University. This is just one example of many. This student held an undergraduate degree and was looking to study Indonesian through ANU's then Diploma of Languages program. Having spent Christmas with their friends and family in Darwin, the student moved their entire life to the ACT to pursue this course. Upon realising the impacts of the MYEFO cuts, ANU sent the following email to aspiring language students:
Dear Student, I refer to your application for the Diploma of Languages. I regret to advise you that the Diploma of Languages will no longer be available for commencement in 2018 and your application has been withdrawn. This is owing to a recent notification, in December 2017, from the Commonwealth that there will no longer be any Commonwealth Supported Places available for the Diploma of Languages at ANU. You may want to consider studying language courses at the ANU on a Non-award basis or look at what other options are available to you through Open Universities Australia.
In other words, if you've got enough money to fund your language diploma yourself, then, they'd be happy to take them on. Understandably, the student was devastated. After they had moved their entire life from the Territory to the south, a move which came at a massive personal and financial cost, the government has basically said, 'You moved your whole life to pursue your dreams, but, because we're going back on our word, here's an online alternative.' This action by the Turnbull government is completely unacceptable. It is unjust and unfair.
This brings me to my next point. These cuts to universities damage the future prosperity of our nation as a whole. Cuts to courses like language diplomas restrict our ability to establish business and career opportunities for our students. They restrict our nation's ability to grow and they diminish our influence in our region. Indonesia is Australia's ninth-largest trading partner. Restricting the next generation's ability to communicate with one of our largest trading partners is simply baffling. The Northern Territory stands to be one of the hardest hit by the Turnbull government's cuts to universities. Indeed, CDU vice-chancellor Simon Maddocks has said that small, young universities such as CDU would be disproportionately affected by the freeze, as they lacked budgets big enough to absorb the cut to revenue. Only last week, Professor Maddocks was quoted in NT News as saying:
'If revenue is going down and costs going up, you can't just keep doing what you're doing …
We will inevitably have to review our capacity to sustain everything we've been doing because you can't keep paying out more and not get the revenue in.'
The university was 'only just financially viable' now, he said.
'We all understand the Government has savings to find but education is a significant pillar to the future of the country. High-performing countries invest in quality education systems …
I agree wholeheartedly. If we are to continue to develop, build and grow as a nation, we must ensure that higher education is affordable and accessible no matter where you live in this country.
If we look at the data from this government's much-bungled census, it's obvious that cuts to universities will only restrict—certainly in the Northern Territory—people's ability to further their careers and improve their quality of life. The 2016 census revealed that only 17.1 per cent of Territorians have a bachelor degree or higher. Compare that with the national average of 22 per cent. That statistic should be an indication that the Territory needs more investment in higher education, not less. These funding cuts have left the people of the Northern Territory in a dire situation.
When Labor first uncapped places, there were 484 more university places for students in the seat of Lingiari. That was for 2008 to 2016. Under Labor's new policy we'll see around 400 more students in Lingiari on their way to university. When Labor first uncapped places in the seat of Solomon, which covers Darwin and much of Palmerston, there were 649 more places for students at university for 2008 to 2016. That's a total of 3,207 students in the Northern Territory over eight years. Now, compare that to the Liberals 2,140 projected number of students under their unfair cuts to university placements between the years of 2020 and 2032—no growth there; no future there.
Labor delivers real reform to higher education in this country. Under Labor's new policy, we'll see around 831 more students in Solomon on their way to university. Certainly, when we were last in government, we lifted investment in universities from $8 billion in 2007 to $14 billion in 2013. We opened the door to university to 190,000 more Australians, many of whom were the first in their family to go to university. But under this government, with this latest round of cuts, that door is being slammed tightly shut.
I rise today to speak against the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018. First, let's look at what this bill does. It amends the Higher Education Support Act to provide a new minimum repayment income of $44,999. In plain English what that means is that, where previously we had a threshold of somewhere around $53,000, the threshold for repaying a HECS debt has been dropped by close to $8,000. But what does it mean in the real world? It means that when a university graduate is earning about 700 bucks a week, taking that home, they're going to be expected to start paying back their HECS debt. Previously, they started paying back their HECS debt once they were earning more than 700 bucks a week. Now the threshold has been dropped. Let's try and translate what that means for people in the real world. If you're a young person taking home about $700 a week, let's face it, it's not a goldmine. Once you've paid your rent and energy bills, and paid for your groceries, shopping needs and transport needs, there's very little left to spend on anything else.
Put that in the context of what else this government is doing. We were here last week. This is a government that gave a whopping great big tax cut to people earning over $200,000. If you're earning $200,000 or more, you get an extra $11,000 in your back pocket. Someone on $200,000, $300,000, $500,000, $1 million or $2 million gets an extra $11,000 in their pocket. Yet the government is saying to a young person who has just graduated from university, 'We're going to make life harder for you. We're going to make life harder for people on Newstart. We're going to condemn you to a life of poverty. Indeed, we're going to make it worse than that. We're going to come after you. We're going to allege that you have debts you haven't repaid and in many instances we're going to make your life miserable.' Look at what they're doing in health care, with increasing out-of-pocket costs and the freeze on Medicare. 'We're going to make life harder for people with chronic illnesses. But we're going to make life easier for people who are already earning many hundreds of thousands of dollars.'
It is a reflection of the priorities of this government. It is no secret that young people are getting royally screwed over by this older generation of LNP politicians. This bill is just one of many examples of a government that is intent on making life harder for young people. Just have a look at the last budget. What did we see in the area of housing, which is one of the great areas of intergenerational inequity that's emerged in our country? We saw nothing. What did we see in terms of addressing insecure work for young people? Again, nothing. Did we see a rise in the youth allowance? No. What did we see to make child care more affordable for young parents? Again, nothing. When it comes to climate change, 'the great moral challenge' of our time, as it was once described by a former prime minister, it was not even mentioned in the recent budget. There is nothing to stop the extinction crisis, or the crisis on the Murray River or the Great Barrier Reef.
This government is presiding over one of the greatest acts of intergenerational theft ever seen in an Australian parliament. Look at what happens to that young person who's now being to forced to repay their HECS debt when they're earning less than they were previously. They're expected to save for their first home. But of course we know that housing prices have increased exponentially over recent years. We know that many young people are locked out of the property market because of skyrocketing property prices, all because they're competing against not people buying their first home but investors buying their third, fourth or fifth home. That's who they're competing against. So is it any wonder that as a young person in this country you would be looking right now at members of the Liberal and National parties and saying to them, 'You had it pretty good and you're making life tough for us.' This is a rigged system that young people are entering into now, where investors who are buying multiple properties get huge tax breaks, yet somebody who's aspiring to buy their first home gets almost nothing.
It is time we started to do something about the young people who are going to inherit many of the consequences of decisions made by this parliament. We're seeing a generation of politicians who enjoyed free education, free health care and affordable housing, who were able to pollute the planet for free with no consequences, now saying to young people in this country, 'We had it pretty good, but we're pulling the drawbridge up behind us and you need to clean it up. You need to fix up the mess that we've created.' Right now they're not only asking young people to pay for something they never had to pay for but also condemning young people to a life of struggle because of the decisions that are being made in this parliament.
We have some very important choices to make. We can recognise that investing in our young people, in the education of the generations that come after us, is an investment in our own country, an investment in the foundations of a decent society and an investment in the prosperity of current and future Australians—the teachers of tomorrow, the nurses of tomorrow, the doctors of tomorrow, the engineers of tomorrow. We can choose to make their life harder or what we can recognise is that we all benefit when we have a well-funded tertiary education sector. We can recognise that those young people who come after us shouldn't be condemned to a life that is made more difficult than the life that we enjoyed. Indeed, one of the very markers of human progress is to look at our young people and say, 'Your life will be easier than the life that we live right now.' We're reversing that trend in this parliament through these acts of intergenerational theft. Look at the housing market, climate, energy policy and, of course, now this retrograde step when it comes to making life more difficult for people who are pursuing tertiary education.
It's time for governments to end this act of intergenerational theft. It's time for governments to stop acting in the interests of the rich and powerful, of corporate Australia. The government should be dropping its plan for corporate tax cuts. It should recognise that what this parliament did last week, when you look at what it's doing today through these changes to the HECS system, is making Australia a less egalitarian, a more unfair and a less caring society. We are here with a duty to act not just for the interests of people who put us here but also for the interests of those generations that follow. And the passage of this bill is emblematic of a government that cares more about its mates at the big end of town than it does about the generations that will follow us.
I'm always very happy to see young people go to university, succeed and get ahead in their careers. I'm happy for them personally. The other reason I'm happy is that university graduates and undergraduates form a big part—not an entire part but a big part—of the Young Liberal Movement around Australia and in my home state of Queensland and they do a wonderful job. Indeed, as undergraduates, they've taken a real interest in democracy in many universities in Queensland. It is the YLMP who've actually taken over the student advancement leagues in the university—some call it student politics. They do a wonderful job, and I'm delighted for them that the taxpayers are able to send them to university and then, through Labor's HECS, pay it back, and I think that's only very fair.
I wasn't bright enough to go to university and, in those days, you needed a Commonwealth scholarship. My parents weren't wealthy enough to send me to university, so I started work as an articled clerk, working eight hours a day, and then studied externally through the University of Queensland to get my solicitor's qualifications. Can I remind Senator Di Natale and most of the other senators—I say 'most' because I suspect Senator Sterle and a couple of others, like me, never had the opportunity to go to university—as they rail on about asking students to pay back the taxpayers for their education, that the people who are paying for their education are, in many cases, not people who will ever go to university. There are a lot of young people who, for various reasons, cannot get into university and go into the workforce. They start earning a fairly meagre wage but they start paying tax, so the likes—
Honourable senators interjecting—
These young people leave school, go straight into work, get a meagre wage, often not a very good wage, and start paying their tax so the likes of Senator McKim and Senator Di Natale can go to university. I begrudge no doctor whatever they earn. Having recently been through the hospital system, I have the greatest admiration for doctors and nurses. But, if Senator Di Natale were any sort of a doctor, he would have, if he had chosen to, been making a small fortune in that profession—and good on him! But it's only fair to the other Australians who paid their taxes for Senator Di Natale's, Senator McKim's and Senator Watt's educations that they should pay it back under Labor's HECS scheme.
I have a niece who left school and started as an apprentice hairdresser. She happily did that; she didn't want to go to university. She's a very good hairdresser. She did her apprenticeship, again, on very meagre wages, but paying tax so that the likes of Senator McKim could go to university. She paid that tax and now she's become a hairdresser, earning a bit more and paying more tax. I think that when we have these debates it's important to understand that young people are not the only ones at university. In the committee stage I will ask the minister for these statistics, but I would guess that there are more young people leaving school who don't go to university than those who do. These senators rail on about university education. As I said, I'm a great supporter of young people going to university; they do a wonderful job in society. Again, I mention what a great job the YLNP, the Young Liberal National Party in Queensland, do, not just in student politics and not just in contributing their arguments but in helping people like me and the Liberal National Party in Queensland to devise policies that keep young people in mind.
I won't delay the Senate much more on this particular bill, but I do ask senators that when they carry on, as we hear Senator Di Natale carrying on, to remember that there are many young Australians who do not have the opportunity they had of going to university. They've paid their taxes, happily, and they would happily pay for the likes of Senator McKim and Senator Di Natale to go to university. But we have to bear in mind the contribution they make, and the fairness, I might say, of Labor's Higher Education Contribution Scheme of a decade or so ago. I think that's fair. I do ask that when senators are debating higher education they keep in mind that there are many young people, who, for various reasons, never have the opportunity of participating in higher education.
It's always a pleasure to follow Senator Macdonald in a debate. I'm sure that I'm not the only member of this chamber, or the outside world, who has noticed that every single speech he gives at the moment is directed at the Young LNP. I wonder if that could be because of his preselection being up for debate right now and his dependence on the Young LNP for those votes.
Of course, he spends the rest of his time in this chamber consistently voting for measures that hurt young people, including the bill that we are discussing. But—oh!—will he use this chamber to grovel to the people who will determine his preselection. We can only assume that other Queensland LNP senators are worried about him and are giving him every opportunity to stay in this chamber so that he can be the first senator in this chamber to reach the age of 80 for some period of time. From my point of view, long may his reign he continue, because every time he gets on his feet I can hear the Labor primary vote going up! So I very much welcome Senator Macdonald's participations in these debates.
On a more serious note, I do rise, as other Labor speakers have done, to oppose this Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018, which is just the latest attempt by this LNP government to again hurt the interests of young people. What this bill is about, more than anything, is putting more and more of the cost of university education onto young people, or onto those who undertake higher education, and forcing them to pay it back at a much earlier stage.
If there was a key point to Senator Macdonald's speech—other than, 'Please Young LNP, vote for me in the forthcoming preselection'—it was that we shouldn't be asking people who don't have the opportunity to go through university to shoulder the burden of paying for that university. I'm disappointed to hear Senator Macdonald have that attitude. I hope that's not an attitude that is reflected among other speakers on the government side in this debate, because many of us who have had the good fortune to attend university, like me, do not come from families of great privilege but come from families who didn't themselves have the opportunity to attend university straight out of school and did exactly what Senator Macdonald talked about and put themselves through work or night school.
In some cases they did have an opportunity to attend a university at a later stage of life. But I know many people who haven't had an opportunity to go to university and who do not begrudge for one moment that opportunity being given to other people. In some cases it is their own children, or their nephews and nieces. In some cases it is the opportunity for their spouses to go to university later in life. People who go to university do not begrudge paying a contribution through the taxation system for someone to do an apprenticeship to become a hairdresser, an electrician or a chef, because that is something where a taxpayer gives people an opportunity to get ahead in life.
If there is a dividing line between Labor senators and those from the Liberal and National parties, on the other side of this chamber, it is whether we believe that we actually are all about an individual or about a greater society and a greater community. We on the Labor side will always argue that we're not only here to advantage individuals' interests; we're also here to advantage the community overall. The higher education system, along with other aspects of our education system—TAFE, training, work experience, all those opportunities—is about giving young people, but also those who need to retrain later in their career, an opportunity to get ahead.
I'm currently chairing a Senate inquiry looking at the future of work. There is a big debate that is going on in our community, and we are looking at the fact that, as automation comes online, as we get greater technology coming into the workplace, there are going to be more and more people whose jobs are disrupted and, in some cases, eliminated. Without giving away key findings of that report, which is yet to be tabled in this chamber, it is very clear from the evidence we've received that more and more Australians, regardless of their background, are going to need retraining and upskilling to be able to simply get a job or retain a job in the new and emerging world of work that we have.
Measures like this higher education bill the government is trying to pass not only disadvantage younger people who are looking to undertake university studies straight out of school; they're also going to impact the many people, and the growing number of people, who will need to retrain from their previous occupation simply to have a job into the future.
So I ask Senator Macdonald and other Liberal senators to just reflect on the fact that, although they might like to come in here and play a bit of class warfare and try to argue that they are on the side of battlers who don't ever have the opportunity to go to university and who shouldn't have to pay for those who do, the fact is that we all have an interest in having a highly educated community, whether it be people educated through universities, TAFEs, apprenticeships or other forms of education and training that people obtain on the job. That is not only in the interests of the individual who is getting that education and training; it is also in the interests of our entire community to make sure that we are preparing people for the new world of work, which is increasingly going to require higher levels of skill and knowledge, and that's not what this bill is doing. What this bill is doing is actually putting more of burden on students to pay for their own education.
I have never objected to the idea of students making a contribution to their own education. Going back to student politics days, it wasn't always a popular opinion on the left-hand side of politics that students should make some personal contribution to their education, but I truly believe that, where we've got to at the moment—with the fees we're asking students to pay at the early stages of their career and with the requirement to repay those loans that they take out to undertake those studies—is a disincentive for poorer and working-class kids to have the opportunity to go through a university education.
Senator Macdonald and others might think that they are defending the interests of working-class and poorer people in supporting these kinds of measures, but what they are actually doing is taking university back to the pre-Whitlam days, when it was the preserve of rich kids only. If we're not careful, we're going to discourage kids from poorer and working-class backgrounds from undertaking university studies, even if they get the marks at school that would enable them to do so.
Specifically this bill will make students start repaying their higher education loans once they hit an income level of $45,000, well below average weekly earnings, at the very time when new graduates, if they are younger people, are looking at trying to save up for a house deposit, which we know is becoming harder still as a result of this government's failure to deal with housing affordability. At the very time when younger students are coming out of university, trying to put together a house deposit, trying to pay off other debts that they may have incurred while they were studying, through credit cards and other forms of debt, and while they are looking, in some cases, at starting a family—also an expensive proposition, as all of us who have a family know—at the very time when some of the students are finding it difficult to make ends meet, this government wants to throw another debt at them and start forcing them to repay the loans that they have taken out to undertake university studies.
Let's remember that, by and large, the only students who are taking out loans to undertake higher education are those from lower and middle-income families. If you're fortunate enough to come from a rich family, you've got parents who can pay what used to be known as HECS and now your HELP loans. But it's working-class and middle-class kids who are being faced with the prospect of having to repay their loans at a much earlier stage of their career while they are also trying to save up for other things like a house or a family.
This bill will also impose, for the first time, a lifetime borrowing limit, to constrain students' ability to undertake further study if it's going to be funded by loans. As I say, anyone who pays any attention to the Australian workplace of the present and of the future knows that, in order to get a job and keep a job in the future, Australians are going to need more education, not less. There are so many jobs that haven't required a post-school qualification that are disappearing in our economy as a result of technology, as a result of offshoring and as a result of other changes, including as a result of this government's failure to defend the car industry. We've seen Telstra announce 7,000 job losses over the last week. The banks are shedding thousands of jobs too. What is needed for people who are being made redundant from their existing employers, to ensure that they will get a new job in the future, is more education, not less. But what does this government want to do? It wants to say, 'Sorry; if you want to go and get some more education so that you can get another job, we're not going to continue supporting you in the form of loans.' Why would any government do that? Why would any government put in place active steps that are going to discourage people from undertaking further education and training, when that is exactly what people need to do to be able to compete for jobs in the future?
In essence, this bill is simply a continuation of the trend that we have seen from this government to put more and more of the burden of university education , TAFE education, traineeships and apprenticeships onto students themselves rather than onto all of us, as part of the community. This government has continued to cut general funding to universities as well as putting more pressure on students to pay more.
One of the most concerning aspects of these cuts to universities that we have seen from the government is the impact they are particularly having on regional Australia and regional Australians. Very often I come into this place and highlight the ineptitude of National Party senators and members of parliament, who say that they are the defenders of regional and rural Australians and consistently get done over by their Liberal counterparts, who are very good at putting through measures which help high-income people in big cities around Australia, to the disadvantage of people in rural and regional areas. This is another example. Universities in regional Australia have played a very important role in preparing the local community for higher skilled jobs, which tend to pay more. Also, they are very big employers in their own right in regional Australia. Many of the regional universities across Australia are some of the biggest employers in their towns and their regions, so if we're cutting funding to regional universities, as is happening under this government, what we're actually doing is cutting jobs in universities and making it harder for regional Australians to get the university education that they will need in the future.
We already know that rural and regional Australians have some of the lowest levels of participation in higher education anywhere in the country. We all know that fewer people in regional and rural Australia than in big cities get the opportunity to go to university. Wouldn't a National Party member or a National Party senator who's keen to get behind rural and regional Australia actually want to be fighting for more funding for regional universities and making it easier for regional students to get a university education? That's what they should be doing, but of course that would involve standing up to the Liberal Party, which we know our National Party members and senators are completely incapable of doing.
The cuts that this government is imposing on regional universities are twice as bad as those we're seeing on universities in the big cities. If you tally it up across the country, you find that regional universities are going to be suffering cuts of seven per cent to their funding, on average, while universities in the big cities are only suffering cuts of 3½ per cent. I don't think we should be cutting funding to the universities in the big cities either. I think we have a massive national interest in increasing funding to universities, as we do in increasing funding to TAFEs, for apprenticeships and for traineeships, but this government has the opposite view. It wants to cut back because it's got to find a way to pay for its big-business tax cuts somehow, so it says, 'Let's take money out of universities, traineeships and apprenticeships,' even though in the long term it will do massive harm to our economy, 'and instead shovel it into the pockets of our mates in the banks and big business.'
Of all the universities across the country, the university that is worst hit by the cuts this government is making to university funding is Central Queensland University. Its main campus is in Rockhampton, but it has campuses in Gladstone, Mackay, Bundaberg and other parts of Central Queensland. In fact, it's been so successful that it's now got many campuses all around the country, particularly attracting international students, who bring more revenue into the university. But, as a reward for its success, what are the government doing? They are cutting its funding by 15 per cent—more than double the amount that regional universities are getting cut overall and, on my maths, four to five times worse than the cuts we're seeing to urban universities.
If you look at who is representing the electorates that Central Queensland University is largely based in—in Central Queensland—you see that, of course, they're all National Party members. You've got George Christensen representing Dawson, Michelle Landry representing Capricornia, Ken O'Dowd representing Flynn and Keith Pitt representing Hinkler. Every single one of them is a National Party member. But have you heard anything from any of them about the cuts their own government is making to the university that is employing hundreds and thousands of people across their communities; and that is giving kids from disadvantaged backgrounds, who have never had a parent go to university, the opportunity to go to university and be the first person in their family to have an opportunity for a university education? Not a peep—because what would that involve? It would involve standing up to the Liberal Party. They never do it on university cuts; they never do it on health cuts; they never do it on school cuts; they never do it on apprenticeship cuts; and they never do it on cuts to big-business taxes, which are not going to benefit Central Queensland either. I really wonder why these people are in parliament. I thought the job of being a parliamentarian was to come to Canberra to defend the interests of your community, whether it be on universities, TAFEs, schools or hospitals, but these people just seem to want to get a flight down here and spend a nice week in the cold in Canberra. Frankly, I'd rather be spending a week in Central Queensland, where it's a lot warmer than here in Canberra. If you are going to come to Canberra and be cold, you might as well actually do your job properly and fight for the interests of Central Queenslanders.
The Vice-Chancellor of Central Queensland University has labelled the cuts that this government is making 'a tax on success'. I thought that the government—the Liberal and National party members—were generally about no tax and limiting tax. The vice-chancellor of this university has labelled the cuts a tax on success. So maybe any one of those four members of parliament or Senator Canavan, who's also based in Central Queensland, can listen to the vice-chancellor of the university there and do something about these cuts. I'm pleased that Russell Robertson, the Labor candidate for Capricornia, is actually doing something and speaking up about the need for these funding cuts to be reversed, because, unfortunately, the member for Capricornia, Michelle Landry, has yet again been missing in action on this issue. It is good to see there is at least one political representative who is taking up the issue.
The same can be said of Griffith University, whose main campus is on the Gold Coast, where my office is based. They're facing funding cuts of $92 million. Again, has anyone heard a peep out of any of the Gold Coast LNP members of parliament? Just like Central Queensland is currently a total stranglehold for the LNP, so is the Gold Coast, but these people aren't doing anything to deserve their places in parliament. They are completely lazy, completely complacent and completely happy to just nod along and let Mr Turnbull and Mr Morrison make whatever funding cuts they want to make to their universities, even though it's their own constituents who miss out. You've really got to wonder why any of these people bothered getting elected to parliament if they don't want to come to Canberra and make a difference for their communities.
The real effect of this bill, in forcing students to repay their higher education loans at an earlier stage and in imposing a lifetime limit on the amount that students can borrow to undertake university and other forms of education, is that students are going to miss out on the opportunity to go through university or to go through vocational education and training through TAFE, apprenticeships and traineeships. At the very time that we are trying to get more Australians to undertake more study to prepare themselves for the new world of work—for the high-tech, high-knowledge jobs that our country is going to be producing—this government is cutting funding to those institutions and forcing students to pay more and to pay earlier in their career. It's the complete opposite of what we should be doing as a country. It's for that reason that I and the other Labor senators will be opposing this bill.
In conclusion, I also want to point out that this bill is a continuation of another trend we're seeing from this government. What this bill does is force students to repay their loans at an earlier stage, and in the background we've also got massive funding cuts that this government is making to universities and traineeships. Right now it's students in universities who are in the gunsights of this government, but it really doesn't matter what kind of young person you are in this country—you are in the sights of this government. It's got to come up with ways of paying for the big-business tax cuts that it wants to give, and the way it's doing it is increasingly by going after young people. If you're a young person who is working, this government is coming after your penalty rates, with more cuts to penalty rates coming in another five days. If you're an unemployed young person, this government is coming after you by tightening eligibility and wanting to drug-test you. If you're in training, this government is cutting funding for apprenticeships and cutting funding for TAFE, making it harder for the young hairdressers, chefs, boilermakers, electricians and chippies to get an opportunity to start their career. Now, with this bill, if you're a university student, it's coming after you by forcing you to pay more for your education and by forcing you to pay it back at an earlier stage. Why is it that this government has such a problem with young people? No matter what kind of young person you are, this government is coming after you, and, at the same time, it's using the funding it's stripping away from you to pay for a tax cut for big business. We all know what this government's priorities are. They are to support its friends in big business, even if it's young people who suffer. The parents of those young people are noticing it, as well.
I rise to contribute to this debate today in relation to the government's Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018, and to put clearly on the record the Greens' opposition to this piece of legislation. We all know that this government goes on and on about not wanting political debate to get drawn into class warfare, and yet what we've got right in front of us today is a piece of legislation that takes the heart out of our higher education support scheme, right down to making it more and more difficult for students who come from lower socioeconomic backgrounds to get a university education, and, even if they do, to never be able to do further training or study because of the difficulty of being able to afford to pay back this loan.
Over and over again we hear this government talk about aspiration. Last week we heard from the Prime Minister, with all of his might during the income tax debate, that this was about aspiration and supporting aspirational Australians. Yet, with one fell swoop, this legislation cuts out the ability for young people right across this country to be aspirational about what level of education they get, how they go about getting it and how they set themselves up for the future, because what this bill does is widen the gap between the rich and the poor. It widens the gap between the haves and the have-nots. It says to young people in this country, 'Unless you've got a bank balance, probably funded by your parents, that is big enough to support your university education, you're going to have to do it pretty tough.' That's what this bill does, and it does it in two ways.
Firstly, it reduces the threshold at which students have to start paying back the debt on their university education. At the moment, on average, students have to start paying back their debt once they start earning $53,000. But this bill wants to drop that down. It wants to drop it down so far that it falls well below the average weekly earnings. It wants to drop it down to about $45,000, which is not much better than the minimum wage in this country. It is astounding that what the government wants to do here is punish students and young people who've gone out of their way to get a university education. It's going to punish them for going to university if they didn't have enough money to pay the up-front fees or to clear the HECS debt on the day they graduated or if they didn't ask mum and dad to foot the bill.
The second thing that this piece of legislation does is cap the amount of money that a student can borrow in order to further their education. At a time when we know that retraining is absolutely essential, when young people are going to enter the workforce in one job and change positions, careers and skills over and over again throughout the journey of their working life, this bill makes it more difficult for young people to get retraining and to further their education as life goes on.
Here, in this place, I think it's really important to look at the lack of vision that this government has under Malcolm Turnbull and the education minister, Simon Birmingham, for aspirational young people and for investing in education in this country. Compare that with the vision that is put forward by the Greens. We argue for an investment in lifelong learning. We know that investing in education is the best bang for buck that any government can spend. That starts with early childhood learning and goes right through school, tertiary education and lifelong learning. We know that we have to enable members of our community to train, to engage in the workforce and to retrain. That is the changing nature of working life right around us. And it's not just here in Australia, of course; it's happening right around the world.
Putting a handbrake on the ability of young people in this country, or anyone, to go back to university to complete another degree and further their skills is a stupid, stupid idea and shows a lack of vision from a government that says it cares about aspiration. It's all lip-service. Perhaps it's all about aspiration for the millionaires and the big income earners and the big banks, but there's no aspiration being put forward by this government in relation to allowing young Australians to get an education to further their opportunities and to be job ready for the workforce.
This bill comes at a time when there is a widening gap already between the haves and the have-nots. Inequality in Australia is getting worse. We know that two-thirds of students live in poverty. Poverty, of course, is one of those areas where, once you're in it, it's very, very hard to get out. It's a tricky cycle. And what this bill does is make it even harder for young people to get out of that cycle. It locks them in. If you're a young person who needs income support from the government, through youth allowance, in order to study, because your parents can't afford it, and if you need to take out a university loan because you're not lucky enough to have a mummy and daddy who are able to sign the cheques at the university down the road, then this bill locks you into a cycle of poverty right from the beginning.
It's not about whether a young person has enough spare cash in their back pocket to have a beer at the uni bar. That's not what we're talking about. We're talking about being able to put food in one's belly, pay for the rent so that you've got a roof over your head, pay for the public transport that you're going to need to get to classes every day or wind back on study to take more part-time work or full-time work, paid at a ridiculously low rate, often with very few penalty rates—this government wants to cut them. We are keeping young people trapped in a cycle of poverty at a time when we should be supporting them to take up more and more opportunities for education. In fact, the best way of dealing with inequality would be to better fund education, to ensure that it's more accessible and to ensure that it's affordable for people so that, when students are studying, they are able to actually focus on their studies. This isn't just about being able to make the university degree itself affordable; it's also about ensuring that students have the support in order to be a student.
Youth allowance is ridiculously low in this country. It is well below the poverty line, so of course you can't live on it. University students struggle every day to be able to go to university, study, get an education and further their careers in order to contribute to society, while struggling on pitiful amounts under youth allowance. We need a better deal for young people in this country, particularly those who are doing everything they can to get an education and to contribute to society.
Of course, higher education isn't all about just what the market gains or about what profits can be gained. This bill sends a very clear message that that's all this government care about, that they only really care about whether there is a commercial return for a university student's university loan. What happened to the days when we understood that educating the next generation was good, in and of itself, for the society and for the community? Education is essential for a decent society. It shouldn't be simply measured against whether the government of the day thinks it offers the certainty of a commercial dividend.
We heard Senator Macdonald speaking on this bill. And while he talked about the importance of having young National and Liberal members educated at university—I think he was doing, as Senator Watt suggested, a pitch for his preselection rant—ultimately he missed the key point, which is that any young person in this country should have the opportunity to go to university, to get an education and to contribute back to the community and the society. We, as a decent society, pay for the opportunity for some of those young people to go to university because we know we get a dividend back in what that contributes to the community.
Nurses don't earn very much. They should earn more. But would anyone in this place begrudge a university graduate who's done a nursing degree next time they're confronted with them at an emergency ward in a hospital? Is the Prime Minister going to turn around to the next nurse he sees when he falls ill or a member of his family falls ill and say, 'But have you paid back your university debt yet?' Of course not, because we know the role of these people in society is absolutely paramount and essential.
It shouldn't be that, just because you're not rich enough to pay your university degree off either upfront or quickly, you don't deserve support from the government. University education is getting more and more expensive. These days, the average fees that students pay and debts that students graduate with range anywhere from $30,000 to $40,000—sometimes more. If you've studied medicine, you're more likely to have a debt of $60,000 to $70,000. If you do a combined degree, your debt is closer to $100,000. University students today are graduating with debts of this magnitude, and yet we expect them to start paying back their debt when they've just exited university, they've just entered the workforce and they're only earning $45,000 before tax. This is absurd. Either we value education in this country or we don't. Either we value the dedication and determination of young people in Australia to go to university, get an education and become our nurses, our doctors and our teachers or we don't.
Why is it that rich kids, because money doesn't matter for them, are the only ones who can pick which university degrees they would like? The reality is that those lower paid jobs are essential for our community but those who are in them still aren't paid what they are worth. Teachers, nurses and early childhood educators are the people who are going to be graduating with debts and having to pay them back on pitiful wages. It is simply unfair. Inequality is a problem in this country, and the sooner this government works that out the better. If they don't, they are going to cop it at the ballot box. Australians are not silly. The voters can see what's going on here. The government has prioritised giving $140 billion in tax cuts which primarily help high-income earners. Later on today, we're going to be debating a bill that gives $85 billion in tax cuts to big corporations—and then the government turn around and say, 'We don't have enough money left to fund education.' It's absurd. It says everything you need to know about the priorities of this government. They don't care about young people, and they certainly don't care about young people from low-income families. They'd prefer that teachers, nurses and early childhood educators went off and did their university degrees, started paying back their loans and then shut up and weren't heard from again.
The problem with this bill is that the government's argument is that these thresholds need to be lowered because somehow, apparently, wage growth is stalling, yet the argument for why we need to give income tax cuts to the rich is that wage growth is going to explode. This government picks and chooses which arguments it wants to run on a bill being debated based on what is going to satisfy the big end of town. 'Let's keep low-income workers down and let's keep kids from low-income households locked out of the system.' This government has already cut $2.2 billion from our university sector. Not only are they making it harder for students to be able to cover the costs of their education; they're making it harder and harder for universities to cover that gap.
I fear that we are sliding into a future Australia that says, 'If you come from a low-income family, if you're not part of the rich kids who went to the best private schools in this country, then you don't deserve a quality education; you can stay over there.' I'm worried that we're sliding towards an Australia that says, 'You can only go to university if your parents are rich.' I'm worried that we're sliding towards a future Australia that says, 'If you come from a poor household, you should stay poor. Don't get in our way. Do the jobs we don't want to do, but don't complain.' That's not the kind of Australia I want, and I don't believe for a second that it's the kind of Australia that anyone else out there in the real world wants either. The Prime Minister talked about aspiration. Well, this is the exact opposite. Aspiration for some but not for all is what this bill says. That's the attitude of the Prime Minister. It is going to make the rich richer and the poor poorer, and that is not the Australia that I want to see.
At a time when the workforce is so rapidly changing, we need investment in our education system across the board—in our early childhood sector, in our schools, in our universities and in our TAFEs. It's going to be a normal thing for people to have to re-enter education and get retraining. Why on earth we would be making that harder is beyond me. It shows a total lack of vision from this government—unless, of course, the vision is to look after the rich and shut out the poor. You can't read this piece of legislation as anything else. It is part of that narrative from this Prime Minister and his government, and it is the exact opposite of the decent Australia that we should all be striving for.
Tax cuts for big banks and big corporations, and tax cuts for millionaires—and then all the money is spent, so there's nothing left to be spent on educating the next generation. That is what is before us today. This is a matter of priorities. I say to the crossbench: Don't fall for this. Don't fall for this false argument from the Prime Minister that we can't afford to invest in our young people. We can afford it, but it means that we can't afford tax cuts for the banks. I move the second reading amendment standing in my name:
At the end of the motion, add:
“, but the Senate notes that:
(a) the government is at war with young people, pursuing policies that put the aspirations of young people to get a degree, own a home and pay the bills further out of reach;
(b) the government is cutting $2.2 billion from universities around the country, without a vote in the Parliament or a mandate from the public;
(c) this bill makes students pay back more of their debt, sooner, rather than doing anything to assist people with the cost of living while studying or to boost wages upon graduation; and
(d) no government that genuinely supports aspiration would make it harder to study at university.”
I'm pleased to have this opportunity to speak on the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018. Labor opposes this bill in its current form, and I'll explain why to the Senate shortly. Firstly, I want to acknowledge the work of my colleagues Senator O'Neill, Senator Marshall and Senator Collins—the Labor members of the Senate Education and Employment Legislation Committee's inquiry into this bill. Their dissenting report sets out very clearly and cogently the many problems with this bill as it stands.
Next, I want to point out to the Senate the proud record of past Labor governments in the great work of broadening access to higher education in Australia. In 1940, when Australia had only six small and very elitist universities, John Curtin's wartime Labor government dramatically increased the number of scholarships available to students from government schools to enter university and also allowed women to apply for these scholarships for the first time. When Gough Whitlam became Prime Minister in 1972, Australia was still served by a small number of elite, fee-charging universities. Although the university sector certainly expanded during the Menzies era, our higher education system was still geared to the economy of the 1950s, not the new knowledge based economy which was emerging in the 1970s. Most university students still came from private schools and upper-income families. The only way students from low-income families could get to university was by winning a scholarship. Gough Whitlam and his education minister, Kim Beazley Senior, made university education free and introduced the first student funding scheme, the Tertiary Education Assistance Scheme, known as TEAS. These two reforms revolutionised higher education in Australia. A whole generation of bright students from government schools were able to go to university who would not otherwise have been able to do so. They included some of the very same people who now want to withdraw that same access from the current generation of young Australians.
By the late 1980s, it was apparent that Australia's massively expanded higher education system could not be sustained on an entirely free basis. Rather than introducing up-front university fees, as the Liberal opposition of the time wanted to do, the Hawke government, through its visionary education minister, John Dawkins, introduced the Higher Education Contribution Scheme in 1989. Under this scheme, a fee was charged to all university students and the Commonwealth paid the balance. But students could defer payment of this fee and repay it through the tax system when their income exceeded a threshold level. This measure preserved the access to higher education created by the Whitlam government while requiring those students who gained high-income employment after graduation to repay some of the cost of their education once they could afford to do. This was a great Labor reform, which has stood the test of time.
The Howard government brought in several retrograde measures designed to undermine the principles established by Gough Whitlam of equal access and no up-front fees. They greatly increased the fees charged under the renamed HELP scheme and also allowed the universities to bring back full, up-front fees for some courses. The Howard changes have allowed the older universities to reclaim their elite status, becoming largely fee-paying institutions. And I will add there that, in fact, because those universities have become largely fee-paying institutions and because of the cuts to the higher education sector, those universities have, of course, had to go offshore to look for students, and we now see the result of this. We see that, in fact, some universities are tailoring courses for particular cohorts of overseas students, and we have seen a recent example where one higher education institution apologised for a supposedly incorrect use of course material when it was brought to the attention of the Chinese embassy here. I think this is one of the consequences that couldn't be seen at the time, but that is what happens when higher education institutions have to seek out fee-paying students in order to sustain their business model.
As a result of these changes, the ability of students from lower-income families to access universities—and, particularly, the more prestigious universities—declined, and students also amassed increasingly onerous levels of debt. It has always been obvious that the Liberal Party wants to return Australia to a two-tier higher education system in which high-prestige courses and high-prestige universities, which naturally lead to higher-income careers, are once again reserved for the children of the affluent elite, while everyone else is channelled off into lower-prestige universities or into the TAFE system, even as that system is being systematically attacked by Liberal state governments.
The last Labor government took a stand against this retrograde trend. In 2009, Julia Gillard, as education minister, introduced the demand driven system. Universities were allowed to enrol unlimited numbers of students in virtually all undergraduate courses in order to increase educational attainment and student equity. Labor's reforms aimed to increase the proportion of young Australians with undergraduate degrees to 40 per cent and raise the proportion of students from lower income families to 20 per cent. This objective was funded through the Higher Education Participation and Partnerships program. This reform was spectacularly successful. University participation rose enormously without any sacrifice of quality. Australia quickly moved from an elite higher education system to a mass higher education system. The proportion of students from lower income families rose from 16.2 per cent to 17.7 per cent between 2009 and 2014. In the same period, the overall number of students from lower income families increased by 44 per cent. Since 2009, the number of Indigenous undergraduate students has increased by 60 per cent. The number of students with a disability has increased by nearly 80 per cent.
It is a wonderful outcome. Andrew Harvey, Director of the Access and Achievement Research Unit at La Trobe University, wrote in June 2016: 'The improvements in equity are even more impressive when considered in historical context. The level of low socioeconomic status participation was virtually unchanged from 1990, when data was first collected, until the introduction of the demand driven system. Class is intractable but not immovable.'
Sadly, however, we now, once again, have a government which does not see greater equity in access to higher education as a priority or even a desirable objective. We've seen during the tax debate in recent weeks that this government's overriding priority is to reduce the amount of tax paid by corporations and high-income earners—the people who essentially fund the Liberal Party and the people who vote for it. That means government spending has to be cut accordingly and government revenue from other sources increased. University education is once again to be a privilege rather than a right; and access is, once again, to be cut off for students from lower income families and government schools.
This bill must be seen in that context. Its primary motive is to cut costs to fund the government's high-income tax cuts. Its secondary motive is to roll back the Labor government's reforms and reduce equity in our higher education system. The dissenting report by the Labor members of the Senate Education and Employment Legislation Committee's inquiry into this bill sets out in detail our objections to this bill. Firstly, we oppose the government's move to lower the HELP repayment threshold to $45,000—only $9,000 a year more than the minimum wage. This completely contradicts the original premise of the HECS and HELP schemes, which was that students should only start repaying some of costs of their university education when they reach an income level high enough to enable them to do so while also meeting the other demands that people face at that age, such as buying a first home and raising a family.
As the dissenting report says, the government has made no sufficient case for changes to HELP beyond budget savings. The report quotes Professor Bruce Chapman, an economist and academic, who designed the original HECS student loan system. He testified: 'I think it is unfortunate when people focus on the stock of the debt. It is really not very interesting. What's interesting is the overall amount that is not repaid. If that number is even at 25 per cent, there is no crisis here, there is no crisis in the system.'
Labor also opposes the government's proposal in this bill to introduce a limit on how much students can borrow under HELP. Currently, students enrolled in Commonwealth supported places have no limit to the amount they can defer through the HELP scheme. The proposal in this bill would create a borrowing limit across all of the HELP programs. The shadow minister for higher education, Ms Terri Butler, made it clear in her speech on this bill that Labor does not oppose the principle of loan limits operating as price signals. But we believe that the proposal in this bill is too rigid. It ignores the fact that our rapidly changing economy and workforce require more and more students to take on additional study throughout their lives to meet the changing needs of the labour market.
This proposal also ignores the fact that the universities—in particular, the elite universities—are now free to charge whatever fees they like and that there is a growing gap between what university courses cost and the assistance available to students to pay for them. As a result, a student in graduate debt is a major concern and has the potential to be a drag on the economy. Young families cannot buy homes if they are crippled by student debt. Labor does not want a system where students have to take out commercial loans to pay for the gap between fees set by universities and the loan borrowing amount. This bill does nothing to discourage reckless high-fee settings. For these reasons Labor opposes this bill and urges the Senate to reject it.
While we're on the subject of higher education, I want to say something about the current controversy over the Australian National University's decision to reject a proposed course on Western civilisation sponsored by the Ramsay Centre. As with so many other policy debates in Australia at present, this debate has become yet another episode in the culture wars. On the one hand, supporters of the Ramsay Centre course say that the ANU has surrendered to a coterie of left-wing academics and students who hate Western civilisation and all of its works, while admiring or at least excusing the behaviour of totalitarian regimes, and who fear that such a course would undermine their ideological hegemony in the universities. Opponents, on the other hand, argue that such a course would be mere apologetics for the West's sorry history of imperialism, colonialism, militarism, racism, and all of the other isms, and would ignore the history of non-Western civilisations, people of colour, women and other oppressed people. Both of these positions are, of course, caricatures and neither of them is very helpful in understanding the issues involved.
I'm a big fan of Western civilisation and I think that our universities should be teaching students about it and about the Jewish, Christian, Greek and Roman foundations of Western culture, religion, politics, literature and art. I studied both Latin and Greek at school, and, perhaps less usefully, Mediaeval French as well. My life and career have been hugely enlightened and enriched by my studies of these subjects. There is no contradiction in teaching these things and also teaching about non-Western civilisations, particularly the civilisations of our Asian neighbours. Indeed it can only help with diversity and understanding of different cultures if we study a variety of courses and if we study different cultures. Australian universities are perfectly capable of teaching both and Australian students are perfectly capable of learning both—nor should any course on any type of civilisation shy away from teaching about the failings of those civilisations.
To go back to the bill: we don't want to discourage people from learning. I would argue that we need more, not less. We don't need cuts, and we don't need a more-euphemistically-phrased freeze on higher education. The sector needs more support, not less. Why don't we not give tax cuts to big banks and foreign billionaires? Why give $80 billion in tax cuts to those groups and not support the education of everyone we possibly can in our society with a merits based system?
I welcome the opportunity to speak in this chamber in support of the proposed change to the student loan system through the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill. After much consideration I have come to the view that the lower loan repayment threshold is preferable to other higher education cuts. I doubt that future students entering tertiary education would appreciate fewer opportunities and perhaps a lower quality education than those who are already reaping the benefits intellectually as well as financially from their time at university.
If the savings from this measure, estimated by the government to be $231 million, are not legislated, the money will have to come from elsewhere in the education budget. At a time of growing debt and with the budget struggling to return to balance, it is important that this bill rein in the rising costs to government of HELP loans. Total HELP lending is growing rapidly, and I agree with the need for repayments to keep pace with HELP lending growth. Those who are reasonably able to pay off their HELP loans should do so to avoid the student loan system becoming unsustainable for future generations and to avoid our loan systems becoming unnecessarily costly to taxpayers, as the Grattan Institute argued in its submission to the Education and Employment Legislation Committee.
We should also take into account the point raised by Grattan, that HELP's largest cost to the taxpayer is debt not expected to be repaid. In 2012, HELP debt was $25 billion, whereas today it is $55 billion. Of that $55 billion, nearly $20 billion is doubtful debt. The evidence is significant, however. On its own, it's not sufficient reason to vote for the bill. Fortunately, this bill does a good job, in my view, in balancing economic sustainability with fairness to students and to those repaying student loans.
I have decided to accept the readjustment of the current repayment pathway. Growing slowly upwards from a fair one per cent repayment rate for those earning $45,000, this legislation offers a smoother repayment process. Those earning between $57,000 and $98,000 will see considerable benefit, and high-income earners will pay their fair share as well. The legislation will couple lower repayment rates across the board for the vast majority of lower- and middle-income earners with smoother incremental rises. That will give significant relief to many, at the same time as increasing the amount of loans that are ultimately repaid. For example: under the current system, from 1 July this year someone on an annual income of $58,378 would face a repayment rate of four per cent. By contrast, if this bill were passed we would see the same person pay a repayment rate of 2.5 per cent. That is a saving of $876 for that individual per year.
I would also like to draw greater attention to the fact that those struggling to pay off their HELP loan do have the option to defer their repayments or to set up a repayment plan that would provide appropriate relief. As I understand it, the vast bulk of those who apply for hardship relief are successful. The hardship provisions provide a responsible safety net to ensure that this bill does not apply undue burden on those in hardship. I support efforts to increase the visibility of the hardship arrangements so that those who need relief get it. I would encourage my fellow senators to consider the hardship provision when weighing up the impact that the lower repayment threshold might have.
Overall, the economic sustainability of the student loan system needs to be balanced with fairness to students, and this bill achieves that balance. With regard to the amendments put forward by Senator Bernardi: I too agree that public and private universities should be treated fairly. His amendments would level the playing field for student access to both private and public universities. The current 25 per cent fee for students at Torrens University Australia in my home state of South Australia, Bond University, the University of Notre Dame Australia and the University of Divinity should be scrapped. One strong reason to vote for the Australian Conservatives amendments is that they would encourage fairer access to students across the board to attend programs that are best fit for them.
It seems to me that the current 25 per cent fee could act as a disincentive for some students when weighing up whether to apply to a private university. A consequence of removing the fee could be that more eligible candidate students, and from less affluent backgrounds, for example, might choose to apply to private universities if they felt that those programs would give them most benefit. I would encourage my fellow senators to vote for the Australian Conservatives amendments on the grounds of fairness—primarily for our students but also for educational providers.
Today we're talking about the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018. We've come a long way with education, but we've still got a long way to go. This is about students having to pay back to the taxpayers the loans that they've taken out. It has to be sustainable for future generations, and that's what the discussion here is about today.
A lot of Australians are grateful for the help from taxpayers and for having the opportunity to go on to further education. We have come to a stage in Australia where I believe that we are pushing people onto further education—people who do not have the qualifications and who should not be in universities because they're not able to do it. I think there needs to be a harder test on people before they go into universities. They're taking out exorbitant loans and they are not able to pay them back, and a lot of people are not able to get jobs when they finish.