Monday, 13 August 2018
Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018; Second Reading
I rise to speak to the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018. This bill would reduce the income level at which people have to repay their Higher Education Contribution Scheme debts and would mean that people who have a HECS debt would have to pay it back more rapidly. It would have huge impacts on young people in particular across Australia today and would lead to us having far fewer people who are willing and able to undertake higher education. The fact that this has been proposed by the government speaks volumes about how out of touch they are with people on low incomes and young people—in particular, the intersection of young people on low incomes.
Look around this chamber. There's hardly anybody here at the moment, but, if you look around this chamber when we're all here—at question time, for example—there is hardly a young person here. In fact, there is only one person in the whole parliament who is under 30, and that's Senator Jordon Steele-John, who, at 23, is really the only one of us who is in any position whatsoever to understand what the impacts of this legislation are going to be on the average student and the average young person saddled with HECS debt. In fact, less than 10 per cent of the whole parliament—MPs and senators alike—are under 40, and the government, which is proposing this legislation, has the grand total of 10 members who are under 40. This is my first point: it's pretty clear that, consistent with that, the government is totally out of touch with young people. It is, in fact, more than out of touch; it's committed to selling them short and selling out their future in the interests of its corporate mates today.
This legislation is yet another attack on young people, students, the leaders of tomorrow and our future. Add this to the already $2 billion worth of cuts to higher education that are resulting in a really serious squeeze on the number of young people who can access higher education. Then, if they get there, they get to experience poorer quality teaching and learning because of bigger class sizes and more overworked teaching staff who are doing their very best but are absolutely stretched and on insecure contracts. There's absolutely no doubt that this measure, on its own, will mean that some people who would have gone on to tertiary education are not going to. One might reasonably ask: who are those people likely to be? It's not going to be those who are happily living at home with their parents, with the privilege of knowing that their parents can support them through the 'Bank of Mum and Dad' and knowing that they always have the safety net of a parent to fall back on if they ever find themselves struggling to make ends meet. No—those people aren't going to be the ones who will be impacted by this legislation. It probably won't affect those who've got a family history of going to university and are confident of finding well-paid work after their degree or the ones who are studying high-status degrees, like medicine and law.
No, the people who are going to be hit hardest by this legislation are those who have had to struggle all their lives—who are doing their best to lift themselves out of poverty; who have attended an underfunded public school and succeeded in getting through Year 12 nonetheless; who don't quite know what they want to study; who often haven't got a family history and people who can guide them in what they want to study; and who don't know whether their study path is going to be a pathway to a secure career or a reliable income. The people who are going to be impacted are those young people who have a difficult relationship with their parents or where life at home is crowded and fractious and they've decided that, overall, life is going to be easier if they leave home. They're likely to be working in casual, underpaid work, living in absolutely crappy, poor-quality rental housing and struggling to pay the bills. The people who are going to be affected by this legislation are those who are newly arrived to Australia, maybe with no family here at all, having survived violence and persecution in their home countries, who are struggling to find their place here, experiencing racism in their everyday lives, finding it hard to find work and thinking that maybe studying is going to be their way forward.
These are the people who will decide that they can't commit to study, because having to pay back their HECS debt when they are only just earning above the poverty line will be too much of a risk and it will add to the stresses on their already overstressed lives. Yet these are the people who we need to be doing everything we can to encourage to study, for their own sake and for our country's sake. For our future as a country, for us to thrive, we have to a well-educated community and workforce. We need to be removing inequality and to be ensuring that everyone has a chance to achieve their full potential, regardless of their background and regardless of their postcode.
We have so many challenges ahead of us as a country that we need the best-educated society that we can provide. Other countries realise this. Germany offers free tertiary education, not just to their own residents but also to any overseas students, because Germany realises the benefits of having a highly educated society. New Zealand is now offering free degrees as first degrees to anyone. So for us to be putting more barriers in the way for young people to be able to access higher education is entirely the wrong direction for us to be heading. In fact, it's entirely the wrong thing to be doing if we want to have a thriving and prosperous country.
So let's think about what the impacts of this legislation are going to be. Put yourself in the shoes of someone who has been struggling and has managed to get their way through uni, and they've now got a debt of maybe $30,000, $50,000 or more. Think of people in their early career years who aren't on a big income, who are paying half their income in rent for the crappy rental housing that I was just talking about. This legislation would tell them that, when they are earning just above the poverty line, they have to start paying this debt back. Think about women who are working part-time while bringing up their kids, where every dollar matters, or single parents suddenly having to pay off their debt on their limited income, where it's most likely going to be a choice of paying off the debt or putting food on the table or clothing their kids. Eight dollars a week is nothing to the people in here but, to people on a low income of $45,000, $8 is a meal for the family, a second-hand coat for your young son or petrol to drive to your daughter's netball match. Eight dollars might mean telling your child, 'Sorry; we can't afford for you to go on that excursion this week. You're going to have to stay home. I'll write a letter to the school to say that you're sick.' And $8, of course, pretty much wipes out what people are getting in their low-income tax cuts, doesn't it?
This government talks about aspiration and talks about working families. This government has no idea! And, as for encouraging and supporting women to stay in the workforce, couple this with the increasing childcare costs, and it's yet another barrier for women going back to work. When it's going to cost you more to go back to work—particularly when insecure, casual, underpaid work is all that's on offer, despite the fact that you've got a tertiary degree—because of your childcare costs and because you then have to start paying back your HECS debt, that's when you decide that it's better to stay at home.
This bill is going to save $231 million. It's a relative pittance that will have massive impacts, but this government don't care. It's clawing back just under twice of what the marriage equality plebiscite cost us last year. It's a choice that the government are making. The big choice, of course, is the choice to forego an income of $200 billion because they are dancing to the tune of the big end of town—$200 billion in tax cuts to big business and the wealthy. But, no, we have to claw back $231 million from people who in all likelihood are doing it pretty tough. That's the choice that the government are making. In short, they like rich people. 'To those who have, let us give them some more.' And they don't like poor people. They think being poor is your fault. 'Why don't you get a better job so you can afford to buy a house?'
It's a bill that sees education as a commodity, a transaction. As I heard Senator Paterson say in his speech when we were last here:
Providers need to think of the product and the service they are providing students for the significant taxpayer investment they receive.
They view education as a commodity, and if you can't afford it then bad luck—that's your fault for being poor. Instead, they'll give tax breaks to their corporate mates, who certainly aren't poor. They'll give themselves tax breaks. Each of us senators earning $200,000 a year will be pocketing a tax break of $11,000 when all the tax cuts are in place. Each of us will be given a tax break that's enough for the yearly repayments on the HECS debts of almost three people who are struggling to survive on $45,000 a year. Not to worry—I'm sure at least some of the people in this place and the other place will donate a small fraction of that to a charity that can then dole out largesse in the form of food parcels for which poor people can feel truly grateful.
The Greens have a very different view of education and of how we should be encouraging people to participate. We see investing in higher education, in all education from early childhood, as a priority, because it's an investment in people and in our shared future. Education helps people to flourish, to fulfil their potential, to understand the world and to work out their place in the world—where and how we belong and how to create a better society for all of us. At every step and stage of life, we should be encouraging people to be learning and should be supporting them in their educational journey.
If you want to talk dollars and cents, then it is an economic investment too. A highly educated society where everybody has the opportunity to be educated ticks every box imaginable for what you need and want in a well-functioning economy. The economic benefits of free education far outweigh the supposed economic justification for giving tax breaks to global corporations and to people who are already well-off. We can afford to do so. It is a choice that we could be making as a parliament. There's a simple example of how it could be so.
I've already mentioned Germany and New Zealand, but let's remember back to 1974 and the decade and a half that followed, when tertiary education was free in Australia. I was one of those lucky ones who didn't have to pay a cent. In fact, around half of this parliament are of an age where they would have been able to benefit from free tertiary education, along with being able to buy a house. This is intergenerational inequity at its most stark. Yet this government are punishing the young people of today to even dare to dream, to have the audacity to contemplate that maybe we could rebuild a more equal society that would have accessible education at its heart.
The Greens would invest in education. Instead of obscene tax cuts, we would invest in education. We would invest in that more equal society, a forward-looking society, a society that values and supports its young people and allows them to thrive. We would make sure that legislation like this before the parliament today would not see the light of day. And we will keep on fighting. We will keep on campaigning against injustices like this bill until we get to that fairer, more equitable society.
If this Liberal government has one mantra, it could be, 'When you can, kick a young person,' because time and time again this government's policies are entirely about trying to make it harder for young people to make their way in life. Whether it's failing to make the sensible changes Labor proposes to negative gearing, tax cuts for multinationals and those in the highest income brackets or increasing the cost of university degrees, the changes that this government makes significantly disadvantage young people. It's as if they think that, by continually disadvantaging young Australians, they can absolve themselves of their failure to provide any sort of economic leadership for the country. They blame young people and attack young people and they do this to divert attention from their cuts to education, their cuts to health and their billions of dollars worth of tax cuts to multinationals and big businesses. If this government's credibility as competent economic managers weren't dead already, the decision that tax breaks for big banks were more important than funding schools was seriously the final nail in the coffin.
The Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018 enacts a number of changes to Australia's income-contingent loan scheme, the Higher Education Loan Program, known as HELP, and makes technical changes to the Student Financial Supplement Scheme, the SFSS. It's an unfair piece of legislation that attacks students and undermines the fairness of our world-class student loan system. Australians already make the sixth-highest contribution to their university fees in the OECD.
Labor believes the current repayment rate is about right. We don't want to make students repay their debts when they're struggling to start a career, saving for a house or trying to start a family. In a time of significant economic transition, we should be investing in our people, not making it harder to get a university qualification. We should be doing all that we can to increase participation in higher education, not making it harder. The MYEFO package of $2.2 billion of cuts is the government's fourth attempt since coming to office to cut funding to universities and make students pay more. We believe that any changes to the HELP scheme need to be considered and evidence based, but these changes to the HELP repayment threshold are simply driven by budget cuts and antistudent ideology.
Labor believes we must have a fair and equitable loan scheme, but these changes to repayment thresholds simply do not pass the do-no-harm threshold. The changes to HELP were announced as part of the package of higher education measures in MYEFO on 18 December last year. This bill sets new repayment thresholds for HELP from 1 July 2018, starting with a new minimum repayment level of $45,000 with a one per cent repayment rate, with a further 17 thresholds and repayment rates up to a top threshold of $131,989, at which 10 per cent repayment would apply. The bill aligns with the indexation of HELP repayment thresholds to CPI instead of average weekly earnings and also introduces, from 1 January, 2019, a new combined loan limit on how much students can borrow under HELP to cover their tuition fees. This limit applies to all programs, including VET students loans, HECS-HELP and FEE-HELP and would be $104,440 for most students or $150,000 for students studying medicine, dentistry and veterinary science courses. This bill also makes a number of technical changes to the repayment threshold for the SFSS, including bringing repayment thresholds in line with the new HELP repayment thresholds and making changes to the order of repayment of student loan debts. The bill would also retain the current three-tier repayment thresholds for SFSS, with existing indexation for 2018-19.
We must remember that this isn't the first time the government has attempted to make this change. The government has previously tried to make changes to the HELP repayment thresholds in its Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System) Bill 2017. Its proposal in last year's bill was to lower the HELP repayment rate to $42,000 a year. Labor was successful in making the case that this rate was too low. The government was unable to get enough support in the Senate, so it withdrew the bill in November. Now it's trying again but with the added punitive measures.
The new proposal for a lifetime borrowing limit is a new policy proposal from the government. This would have significant implications for the operation of the higher education system. While a borrowing limit has been introduced in the VET student loans, there has yet to be a limit for all loan schemes in the higher education system. Traditionally Commonwealth supported places or HECS places did not have a borrowing limit for students. Students taking other courses which were not subsidised, like full-fee postgraduate coursework places, could take out a loan for the fees through the FEE-HELP scheme. Full fees were set by universities and higher education providers and have not been regulated, which has led to instances of students taking on significant amounts of debt. While there is some merit to sending a price signal through a lifetime borrowing limit, the proposal in this bill may have a range of unintended consequences.
On 15 November last year the Senate referred the provisions of the bill to the Senate Education and Employment Legislation Committee for inquiry and report by 16 March. Very few of the submissions indicated outright support for the bill, and Labor senators recommended the bill be opposed. To put it simply, this bill is bad policy and many submissions to the inquiry agreed with this view. The National Union of Students is not only opposed to the changes proposed in this bill but to the entire suite of measures the government has attempted to introduce during its time in government. The NUS submission to the inquiry states:
Since the 2014 budget, the Federal Government has attempted multiple times to impose radical changes on Australia's Higher Education sector. It has done so with no coherent strategy for Australian higher education, other than to reduce public funding for what is an incredibly vital sector.
… … …
NUS notes that the Federal Government has consistently failed to win the support of students, the Australian public, or the Senate for these changes, yet has proceeded with massive cuts and an end to the demand-driven system through executive order.
The National Tertiary Education Union argues that this bill is flawed in four key ways, telling the committee:
The NTEU opposes the proposed changes to HELP repayment schedule, especially the lowering of the income threshold to $45,000. The reasons for our opposition include that:
Similarly, the ACTU, in its submission to the inquiry, was highly critical of the bill:
… we have seen this government persist with unprincipled, unfair and unsustainable policies that shift the cost burden for higher education onto the shoulders of students and their families. The ACTU believes that this bill places an unreasonable burden on students and will do nothing more than continue this government's agenda of reducing access to higher education for disadvantaged Australians.
It also argued:
At a time when home ownership, even for university graduates, is becoming an impossibility for many young people and when someone earning $45,000 a year will be spending, on average, nearly half their income in rent, increasing costs for young people to attend university and TAFE is unacceptable. It locks them out of education and ensures that those who do manage to enter the system have a harder time starting out.
So the government believes that the escalating level of HELP debt is caused by former students not repaying their debt. Yet evidence suggests that this isn't the true cause. In fact, its own policies may well be to blame.
Witnesses to the inquiry arguing against the government's view include the NTEU, who wrote in their submission:
While the NTEU understands the government's concerns about the ever escalating level of outstanding HELP debt, … we do not believe changing the repayment schedule addresses the fundamental cause of this problem.
The escalating level of HELP debt shown in Figure 2 is not a consequence of students failing to repay their debts. The rising level of HELP debt is being driven by:
So we can see that the reasons that the government argue that this bill is needed are in fact false.
But let's take a moment to consider who will be impacted most by the changes. The Regional Universities Network outlined how this change will most impact on lower income households, with their submission stating:
The decrease of the first threshold for the repayment of student loans from around $52,000 to $45,000 is a significant change, which will negatively impact on low income households.
And their submission said:
A cap on student loans is a disincentive for life-long learning.
Universities Australia was also critical about how the bill will impact on those who can least afford yet another hit to their budgets. Universities Australia said in its submission:
UA is concerned about any proposal that would increase the financial burden on graduates earning modest salaries. … A $45,000 threshold would require graduates earning significantly less than the median starting salary for Bachelor degree graduates in full-time employment ($60,000 in 2017) to start making repayments.
The proposed, inflexible cap makes little sense in an era of accelerating labour market change, requiring more people to retrain and reskill. The proposal is difficult to reconcile with a commitment to lifelong learning. Trends towards requiring Masters level qualifications for initial professional registration also raise questions about the implications of the proposed limit.
And it was argued by the ACTU that VET students in particular are most likely to be hit by the changes in this bill. They argued:
It is clear that the students who will suffer most from these changes are those from disadvantaged backgrounds. Students from low-socio economic households will be particularly punished. VET students, who are more likely to be from disadvantaged families, are likely to be the hardest hit. Students from low socio-economic households are unlikely to be able to rely on support from their parents either during university or, crucially, in the early years of their career.
I'm also deeply concerned that the government has not fully understood the impacts that the changes to HELP repayment thresholds will have on women. We know that, for this government, women are a second thought. This government has delivered policies so often that disproportionately impact on women. As National President of the National Union of Students Mr Mark Pace stated:
We know from the National Tertiary Education Union's submission to this Senate inquiry that 60 per cent of all Australians with outstanding HELP debt are women and that two-thirds of the Australians who will be dragged into the debt pool with the new proposed repayment thresholds will also be women—therefore, the bill should be rejected on that premise as well.
Equity Practitioners in Higher Education highlighted the current gender inequality of the HELP system, a situation which will worsen with the proposed changes in the bill. They stated in their submission:
The gender inequity of graduate salaries and the gender pay gap between men and women is reinforced by carer responsibilities, feminised industries and gender discrimination. Unsurprisingly, women as a group take longer to repay their student loans than men, largely due to gender pay gaps and time away from paid employment while fulfilling caring responsibilities. The interest on student loans continues to accrue, even though earnings may be well below the repayment threshold.
Equity Practitioners in Higher Education highlighted the impact that changes in this bill would have on equity groups including Aboriginal and Torres Strait Islanders and people living with disability. Their submission stated that the government needs to take into consideration:
So it's pretty clear that the government has only ever had one plan for higher education: cut university and TAFE funding and make students pay more. The Liberals can't help themselves. They've consistently tried to make students pay more to pay for their $80 billion tax cuts. We've seen it in the schools, with $17 billion cut. We've seen it with vocational education and training, with nearly $3 billion cut and more than 140,000 apprentices and traineeships lost. That's 140,000 apprentices and traineeships lost since the Liberals came to office. Again, we've seen it with unis, with $2.2 billion cut.
Labor deliver real reform to our higher education in this country. When we were last in government, we lifted investment in universities from $8 billion in 2007 to $14 billion in 2013. We opened the doors of universities to 190,000 more Australians, many of whom were the first in their family to go to university. The Liberals, through their latest round of cuts, are slamming those doors shut in people's faces. This bill is bad. It's bad for students from low-income households, it's bad for women, it's bad for Indigenous and culturally diverse students, and it's bad for students with disability. The government has failed to make the case as to why this bill is needed and has failed to adequately consider the effects that these changes will have on students and graduates who are struggling to own a home and get ahead in life. I encourage all senators to vote against this legislation.
This is still not my first speech. I rise to support the government's Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018. This bill amends the Higher Education Loan Program, HELP, and the Student Financial Supplement Scheme, SFSS, to revise the repayment threshold for student loans. It will also change indexation arrangements for repayment thresholds, amend the order of payment of some student loan debts and introduce a combined lifetime loan limit for HELP.
The argument in favour of these changes is conclusive. HELP debt has grown rapidly in recent years, reaching the astronomical figure of $55.4 billion, nearly $20 billion of which is never expected to be repaid. This was driven in part by students doing vocational education and training, which had rapidly expanded under the previous Labor government, loaded with dodgy courses which were promoted by even dodgier private operators. Some professional students have been identified who have skipped from one useless course to the next, running up hundreds of thousands of dollars in debt without ever getting qualifications that will get them sufficient income to repay their debts to the taxpayer.
During the life of the HELP scheme, the minimum repayment rates have generally remained around average weekly ordinary time earnings. However, the repayment thresholds are subject to indexation each year by the increase in average weekly earnings. As a consequence, the threshold has tended to increase over time in real terms, until lower thresholds have been legislated. The adjustment proposed by the government is fully in line with past practice.
At a more general level, many people fail to appreciate that widespread tertiary education was one of the great achievements of the Menzies government. Menzies knew that improving the education standard of Australian people would improve their ability to get better-paying jobs and would drive prosperity and material advancement. Many of the great universities of Australia, such as ANU, were built as a consequence of the Menzies government policy.
However, an issue that should be mentioned is that even today not everyone goes to university. It follows that if those who go to university do not pay the cost of their own courses, those who do not get the benefit of a university degree end up subsidising those who do. More than anything else, this is a powerful argument for lowering the income repayment threshold for HELP and SFSS student loans. To those who oppose the bill or actually want to increase the repayment threshold, I ask: why should low-income working families who are unable to go to university be required to pay additional tax so that middle-class students can get a free ride to higher incomes and dazzling careers? Higher repayment thresholds for student loans do not help low-income earners: they punish them. Rich man's degree, poor man's fee, has never been more true.
I rise to join with other opposition senators to oppose this bill. I do so on the basis of equity reasons and also what might be called economic reasons and what's best for the nation's economic future. I don't think that there would be anyone in this place who would deny that Australia's economic future is completely dependent upon us investing in the skills and knowledge of Australians. Everywhere we look around the world, we are seeing technological advances. We are seeing other countries investing increasingly in their higher education sectors, their vocational training sectors and their schools to ensure that their people of all ages are as well prepared as possible for the kinds of jobs of the future that are going to rely increasingly on high levels of knowledge and skills. I don't think there would be anyone in this place who would disagree with that. So it defies belief that, yet again, we're in here debating another bill from this government which tries to take the country in exactly the opposite direction. Even in the short time that I've been here, we have debated a number of bills that have seen the government take the axe to funding for schools, for vocational education and training, in particular TAFE, and also for universities. So at the very time when we need to be investing more in the skills and knowledge of Australians, to make sure that they are prepared for the kind of jobs that are growing in the future, this government is taking us in exactly the opposite direction. That's what this bill does.
In particular, this bill will reduce the income threshold at which people will start paying back the loans that they've taken out to pay for their higher education. I was fortunate to graduate from university in the early days of what was then the HECS system, when some form of fees were re-introduced for university studies in Australia. As a result, from memory, the debt that I took out was in the order of $8,000 to $10,000. That did take me a number of years to repay. I wasn't from a family that had millions of dollars lying around spare and was able to pay for my fees up-front. Like most Australians undertaking higher education studies, I paid it back once I graduated from university and started earning a reasonable income.
The problem with what the government are trying to do is that they are not only going to make students pay more for their degrees than they have had to in the past but they're also going to make students pay that back at a much earlier stage, when they hit $45,000 a year. That is not only below the median income for Australians overall; it is below the median income for graduates from university. So they're actually hitting up people below the median and forcing them to repay their fees at an earlier stage. There's nothing in this that's going to affect wealthy students from wealthy families whose families are going to be able to pay the fees up-front. This will only impact students from working and middle-class backgrounds, who have no choice but to take out a loan in order to go through university. It's another example of this government training its guns on people from working and middle-class backgrounds and doing nothing to disadvantage students from wealthier backgrounds.
As I say, these changes from this government come on top of a range of other cuts that they've imposed on the education sector. These changes come on top of the $17 billion that they've cut from school funding, particularly from state schools—which, again, educate most kids from working- and middle-class backgrounds—and they also comes on top of the cuts that we keep seeing from this government to TAFE and vocational education and training for the future. I don't really know what kind of future the government think they are preparing the Australian people for if they are not prepared to put serious funding into our education system to make sure that young and older Australians have the opportunity to compete for the kinds of jobs that are going to be opened up in the future. But, arguably. the worst thing about this bill—in addition to them jacking up fees for university students and cutting funding to universities, cutting funding to TAFE, cutting funding to schools and making students repay their university loans at a much earlier stage—is that the reason the government are doing this is that they've desperately got to cobble together a pot of funding to pay for the tax cuts that they want to give to big business.
I was listening to Senator Anning, who spoke before me, and there have been other government speakers on this bill. They always like to trot out the class warfare in these debates about higher education funding, and they always like to talk about why people from working-class backgrounds or poor backgrounds who don't have the opportunity to have a university education should have to pay for those elites who get to go to university. For starters, the entire community benefits from having a highly educated population. It doesn't matter whether you're rich or poor, the nation's economic future is dependent on having a highly educated population. But even leaving that aside, do you ever hear anyone from the government get up and talk about how unfair it is to make poor people and working-class people pay more in taxation so that the government can give the banks or big business a tax cut?
The government and the crossbench supporters that they have are completely missing in action whenever it comes to standing up for working-class and poor people who are having to pay more in taxes to pay for a big-business tax cut—people who are losing funding to their hospitals, schools, TAFEs and pensions in order to pay for a big-business tax cut—but, all of a sudden, they become the friend of working-class and poor people when it comes to higher education. Everyone can see through this. It is just nonsense. This government and their crossbench supporters have no interest in helping working-class or poor people in Australia. If they actually did, they would get rid of this bill, which is going to require people to repay their loans at an earlier stage—not the wealthy students who've got parents who can pay their fees for them, but the working- and middle-class students who actually have to take out a loan to get a university education.
I don't think it's very well known that Australians already pay the sixth-highest contribution to their own cost of university education of any country in the OECD, in any country in the developed world. We are the sixth-highest already. So it's not as if we aren't asking students to make a contribution to their education—I'm completely fine with doing that—but it's about the level at which people should repay these loans, before we actually start making a disincentive for people from poorer backgrounds to undertake university studies in the first place.
If this bill goes through it's going to have a particularly big impact on younger people—who, to my knowledge at least, still make up the highest proportion of university students in the country. At the very time young graduates are trying to put together the money to buy their first home and maybe to have a family, they're now going to be saddled with higher debts that they have to repay at a much earlier stage than is currently the case. So it's going to impact on young people.
Senator Bilyk was talking about the particular impact that this bill is going to have on women. Pleasingly, in Australia over recent decades, we've been able to increase the proportion of women who go to university. It's not like when my mum was growing up and women had very little chance to go to university. It's great that there are so many more women going to university these days. But all of the statistics show that it's mainly women who take longer to repay their debts and, therefore, their university debts, and therefore rack up greater interest, because, unfortunately, occupations dominated by women still tend to pay less, and many women take time out of work to have children.
So it will have a particularly big impact on women as well—not to mention the particular impact that this bill will have on regional students. I just want to say a little bit about this. I've pointed out, on a number of occasions across different pieces of legislation, how hypocritical it is for Queensland LNP senators, particularly those who line up with the National Party, to come down to Canberra and pretend that they're the friends of regional Queenslanders and then consistently vote for legislation dreamed up by their Liberal Party colleagues which will actually hurt people in regional areas.
We know—it is beyond dispute—that people in regional areas, particularly in regional Queensland, do tend to have lower levels of income than those in the big cities; they graduate from degrees and get less pay than their colleagues in the big cities. What LNP senators, particularly those lined up with the National Party, are going to do by voting for this bill is make their own constituents in regional Queensland pay more for their courses and pay it back earlier, before they've actually even started earning the median wage for university graduates. So that's how much of a friend they are for regional Queenslanders; they're prepared to, yet again, come down to Canberra, stab them in the back and vote for legislation that's going to help out their Liberal Party mates and sell out their National Party supporters back home.
In conclusion, as I've already said, no-one could seriously debate that this country's economic future is completely dependent upon having the most highly educated community that we possibly can. What we need is a government that actually is prepared to invest in our schools, invest in our TAFEs and invest in our universities. We need to have a government that's prepared to take people who've worked in blue-collar jobs all of their life and give them training opportunities to make sure that they're prepared for the kinds of jobs that are going to exist and grow in the future.
This bill takes us in exactly the wrong direction. It's cutting funding to universities. It's cutting funding for places for universities. It's making students pay more for their education and it's making them pay it back much earlier. This is the wrong direction for our country to be going in, and that's why I'll be joining opposition senators in voting against it.
I've said before that I didn't know what a high-school drop-out was until I went to the United States to live and discovered that I was one. Despite the lack of education—leaving school at 15 to join my local newspaper—I feel strongly about young Australians getting the best, most thorough educations they possibly can. I applaud some new programs in Queensland and the Northern Territory to get more Indigenous students through high school and then, importantly, through university, for better jobs.
I see that across the ditch Prime Minister Ardern has a whiff of Gough Whitlam's dream of free universities. It won't happen here again, but at least the government should be doing its damnedest to make life easier for university students to have enough money to eat, to pay the rent and to start their careers without worrying about the pressures of HECS debt repayments. Australians want young people to have every opportunity to continue their education, regardless of their socioeconomic standing, to get into great jobs both here and overseas and to contribute positively to the economy and to our society. They are, as other speakers have said, our future.
The reform package now boils down to two key measures—one I can live with, and one I can't. The introduction of a replenishable cap on HELP loans makes good, practical sense. I know it doesn't always pass the pub test to give students access to an endless stream of money to collect more and more degrees—what I call professional students. But people who pay down their debt will be able to borrow again for another degree. It's that simple, and it's that good. On the other hand, lowering the HELP repayment threshold to $45,000 is plainly unfair and, I believe, unjust. The government—remember—started the bidding at $42,000. They may believe that $45,000 is a fair compromise. Well, I don't. Pauline Hanson's version of chopping the threshold to under $30,000 is simply cruel, blinkered—even obscene—and not worth discussing.
Many young uni graduates who are for the first time earning a real adult salary are at the same time discovering our very high cost of living. They're moving out of the family home. They're paying bills. They're paying rent. They're paying for public transport, maybe trying to buy a car. On top of that, they need to find money for a new suit, new shoes, a new work uniform, and they still need to be able to eat. I'm not talking about overpriced smashed avocado on sourdough drizzled with balsamic vinegar; I'm talking about baked beans, bangers and mash, and scrambled eggs.
I'm also concerned that the government has not sufficiently factored in the impact this change will have on women, as other speakers have also mentioned. The President of the National Union of Students, Mark Pace, told a Senate inquiry that 60 per cent of all Australians with outstanding uni debts are women, and two-thirds of the Australians who will be dragged into the debt pool with the new proposed repayment threshold will also be women. Women, returning to work part time after having kids, would also be hit at a time when every single dollar counts. Now, I believe that people need a bit of breathing room, and that's what I'm hoping to give them with my amendment. My amendment is to lower the repayment threshold, but only very slightly, to bring it down from around $52,000 to $50,000.
This compromise acknowledges that national debt does need to be paid down and that HELP debt is part of that. When HECS was first introduced it was intended that students would begin to repay their loans when they started to get a direct, private benefit from their education. The community rightly expects that those who are earning decent salaries pay the government back—pay the taxpayer back. Starting to pay back your HELP loan at one per cent when you've reached a $50,000 salary, to me, seems fair. I remember people like the Treasurer and the Minister for Finance, Senator Cormann, told me two years ago this month, when I was sworn in: 'Remember, Derryn, compromise is what Canberra is about. Seventy per cent of something is better than 100 per cent of nothing.' Government ministers are always saying this. I hope they'll support my amendment on this. If my amendment does not get up, if the government turns its back on me, I'll join with the Greens, the ALP and some of my crossbench colleagues in attempting to excise the change to repayment thresholds from this bill to get rid of it altogether. I'll finish by saying, 'That's not bad for a high school dropout.'
I have informed my colleagues in the coalition government that I remain opposed to the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018. Some would say I'd be crossing the floor against my party; however, I see it as staying true to my word. I would like to thank my National Party colleagues for understanding that I take my stance. From day one, they have known my view on this bill and they have supported—while, admittedly, at times, with some understandable trepidation—my independence on this topic that is close to my heart. That is what makes the Nationals a great party. They respect a vast array of attitudes and opinions held by an equally diverse and switched-on regional Australia. I would also like to thank the hundreds of people, including students and academics, who have contacted my office to support my strong stance on the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018.
In my first speech I said:
… our most fundamental challenge as Tasmanians is education.
I went on to say:
According to Saul Eslake, each additional year of school attained, on average, leads to between six and 19 per cent economic growth over the long run. People with a degree earn an average of 50 per cent more over their lives than those whose education ends at year 12. In turn, people whose education finishes at year 12 earn 40 per cent more than those who finish at or before year 10. The pattern is clear enough.
But it's not just financial. In addition to being more prosperous, people who are better educated tend to be less prone to gambling, drug abuse, alcoholism, obesity, crime and chronic illness. In short, a better education means a better life.
Furthermore, my opposition to the bill was also outlined in a statement released in April, where I outlined my concern that any reduction in the HECS-HELP repayment threshold would, in fact, be a disincentive to students, especially those from lower socioeconomic backgrounds, from undertaking study to improving their prospects in life. Students are one of Australia's most precious resources, and we should invest in them.
My first speech had all the facts and figures in there as to why I strongly support maximising the opportunity for students, especially for those from my home state of Tasmania, but it is a decision I made with my head and my heart. I have seen, through my charity work with Enormity Inc., Books for Babies and Toast for Kids, that education sets a pathway to more opportunities.
It is with my heart-and-head approach that I also recall, from my first speech, mentions of the young Tasmanians inspired to grab their opportunities and run with them to achieve bigger dreams. That is what an education can do. It can open doors and lead to opportunities we could only ever have dreamt of. It is in line with the same aspirational spirit that has been mentioned in other contexts within the Senate over the past few weeks.
So apologies to those who thought that they may have gotten some political mileage out of me changing my tune and supporting the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018, even though I recognise the government's intent to make a sustainable system. However, I'm not changing my position on this bill, which I am opposing for all Tasmanians and all Australians with my heart and my head. I am proud to be in a party that leads the way in supporting rural and regional students to get an education. The Nationals have systematically removed barriers for rural and regional students. The Nationals have been an instrumental part of a government that commissioned the independent Halsey review into rural, regional and remote education. We have delivered record funding, through Gonski 2, that will prioritise regional, rural and remote education. We have removed farms from the asset test for country kids, changed youth allowance to better support rural students to make sure the gap year is only 12 months and improved access to educational opportunities for regional students, especially those from low-income families. Thank you.
I thank all senators who have contributed to this debate. I particularly thank those who have indicated their support for the Turnbull government's reforms to ensure that our world-leading income-contingent loan program for students, which is one of the world's most generous, continues to be viable and sustainable into the future. We are marking the 30th anniversary of the introduction of HECS by the Hawke-Keating government. Mr Acting Deputy President Whish-Wilson, I'm sure you, I and others would have been in that first generation that saw HECS-HELP and its introduction.
I want to acknowledge the members of the Senate Education and Employment Legislation Committee who have undertaken work on this legislation. Their work is demonstration that what we've seen since the advent of HECS and its subsequent HELP scheme is nothing but continued growth in participation in higher education, particularly participation across different equity cohorts. I particularly thank the Chair, Senator Gichuhi, and Senator Paterson, whose report the Turnbull government has adopted, including their proposed recommendations and amendments for a renewable limit on outstanding HELP loans. The renewable loans balance, as proposed, will commence from 1 January 2020, but the existing loan caps will be increased from 1 January 2019. I also want to thank, in particular, those experts, such as the original architect of HECS, Professor Bruce Chapman, who have made contributions to the Senate inquiry and to deliberations on this matter. These proposed changes are the culmination of a process that commenced with a policy discussion paper back at the time of the 2016-17 budget.
A generous student loans program provides access to tertiary education for all Australians, irrespective of their backgrounds, their financial means or the circumstances of their families. No real rate of interest is charged on outstanding loans, and as former students would know—and as I trust current students appreciate—it is certainly one of the best loans anybody will ever get. We are determined to preserve it and to ensure that it is sustainable well into the future. Australians will continue to be able to pursue further study, to change careers and to specialise in their current profession, and to do so by accessing very generous loans.
The HELP loan limits will continue to be indexed annually so they will increase in line with the cost of living. The Australian tax office's financial hardship provisions ensure that Australians should not have to make compulsory repayment if it will leave them or their families in financial difficulties. In discussions with some senators—I particularly acknowledge Senator Storer here—we've worked to increase awareness of these provisions to ensure there are clear links to them on the StudyAssist website. Some 90 per cent of applications for full or partial deferral of repayments are approved by the tax office. These measures are fair and progressive and ensure that Australia's world-leading income-contingent loan scheme will continue to be available to future generations of students.
Importantly for all Australian taxpayers, outstanding loans under the HECS-HELP program stand at over $50 billion at present. If we don't act over the next few years, future governments may well be forced to act, and in a way that doesn't preserve, as we have, the integrity, sustainable, and viability of the loan scheme. Indeed estimates are that, without the types of changes that we're proposing, around one-quarter of that $50 billion of outstanding loans will not be repaid.
The Labor Party would have you believe they're all for fairness, sustainability and future prosperity, but they tend to like to kick the can down the road and avoid making the difficult decisions, such as this one, that will improve the sustainability and integrity of this loan scheme well into the future. Today's Labor Party is not the party of Hawke and Keating, who took the decision to first introduce HECS. Indeed, whilst the 30th anniversary of HECS is upon us, another 30-year anniversary looms next year: the last time a Labor government delivered a surplus.
The coalition is determined that we will be responsible with Australia's finances, but also with the future of access for Australian students, by ensuring that the tertiary loans scheme, the HECS-HELP scheme, is viable, sustainable and affordable into the future so that it continues to provide that access for every student to be able to go to university without fear of up-front fees getting in the way of their capacity to do so. I acknowledge Senator Martin's comments before, particularly the remarks that highlighted some of the other steps we've taken in terms of improving access to youth allowance for rural, regional and remote Australians to ensure that some of those who face the highest cost-of-living pressures, in having to move to a city to be able to access higher education, are given additional support to do so.
I thank senators again for their contributions. I commend the bill to the Senate. I indicate that there are some government amendments that will be circulated, particularly relating to the fact that this bill is now being considered subsequent to its initial intended start date, and I hope that the bill enjoys the support of senators.
Question agreed to.