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

I move Greens amendment (1) on sheet 3368:

(1) Schedule 1, page 3 (line 1) to page 22 (line 30), omit the Schedule, substitute:

Schedule 1 — Discharging student debt

Part 1 — Amendments of the Australian Apprenticeship Support Loans Act 2014

Australian Apprenticeship Support Loans Act 2014

1 Subsection 27(1)

Omit "on the day the instalment is paid", substitute "on the relevant day".

2 After subsection 27(1)

Insert:

(1A) For the purposes of subsection (1), the relevant day is:

(a) unless paragraph (b) applies—the day the instalment is paid; or

(b) if the instalment should have been paid on or before 1 June 2025 but was paid after 1 June 2025 as a result of an administrative error—1 June 2025.

3 After section 27

Insert:

27A Discharge of AASL debts incurred between 1 January and 1 June 2025

An AASL debt a person incurs in the period beginning on 1 January 2025 and ending on 1 June 2025 is taken to be discharged.

4 After section 37

Insert:

37A Discharge of accumulated AASL debt

An accumulated AASL debt a person incurs on 1 June 2025 is taken to be discharged immediately after it is incurred.

Part 2 — Amendments of the Higher Education Support Act 2003

Higher Education Support Act 2003

5 After section 137-19

Insert:

137-19A Discharge of HELP debts incurred between 1 January and 1 June 2025

A *HELP debt a person incurs in the period beginning on 1 January 2025 and ending on 1 June 2025 is taken to be discharged.

6 After section 140-35

Insert:

140-36 Discharge of accumulated HELP debt

An *accumulated HELP debt a person incurs on 1 June 2025 is taken to be discharged immediately after it is incurred.

Part 3 — Amendments of the Social Security Act 1991

Social Security Act 1991

7 After section 1061ZVDA

Insert:

1061ZVDAA Discharge of SSL debts incurred between 1 January and 1 June 2025

An SSL debt a person incurs in the period beginning on 1 January 2025 and ending on 1 June 2025 is taken to be discharged.

8 After section 1061ZVEE

Insert:

1061ZVEEA Discharge of accumulated SSL debt

An accumulated SSL debt a person incurs on 1 June 2025 is taken to be discharged immediately after it is incurred.

9 At the end of Division 2 of Part 2B.3

Add:

1061ZZEUA Discharge of accumulated FS debt

An accumulated FS debt a person incurs on 1 June 2025 is taken to be discharged immediately after it is incurred.

Part 4 — Amendments of the Student Assistance Act 1973

Student Assistance Act 1973

10 After section 8B

Insert:

8BA Discharge of ABSTUDY SSL debts incurred between 1 January and 1 June 2025

An ABSTUDY SSL debt a person incurs in the period beginning on 1 January 2025 and ending on 1 June 2025 is taken to be discharged.

11 After section 9E

Insert:

9EA Discharge of accumulated ABSTUDY SSL debt

An accumulated ABSTUDY SSL debt a person incurs on 1 June 2025 is taken to be discharged immediately after it is incurred.

12 After section 12ZG

Insert:

12ZGA Discharge of accumulated FS debt

An accumulated FS debt a person incurs on 1 June 2025 is taken to be discharged immediately after it is incurred.

Part 5 — Amendments of the VET Student Loans Act 2016

VET Student Loans Act 2016

13 Subsection 23BA(3)

Omit "on the day that the Secretary pays the loan amount", substitute "on the relevant day".

14 After subsection 23BA(3)

Insert:

(3A) For the purposes of subsection (3), the relevant day is:

(a) unless paragraph (b) applies—the day the Secretary pays the loan amount; or

(b) if subsection (3B) applies to the loan amount—1 June 2025.

(3B) This subsection applies to a loan amount if:

(a) the loan amount should have been paid on or before 1 June 2025 but was paid after 1 June 2025 as a result of an administrative error; or

(b) the loan amount:

(i) was paid during the period of 6 months beginning immediately after 1 June 2025; and

(ii) was used to pay tuition fees for a course, or a part of a course, for which the census day was on or before 1 June 2025.

15 After section 23BA

Insert:

23BAA Discharge of VETSL debts incurred between 1 January and 1 June 2025

A VETSL debt a person incurs in the period beginning on 1 January 2025 and ending on 1 June 2025 is taken to be discharged.

16 After section 23CE

Insert:

23CEA Discharge of accumulated VETSL debt

An accumulated VETSL debt a person incurs on 1 June 2025 is taken to be discharged immediately after it is incurred.

As someone who has long pushed for free and universal public education, I am proud to move this Greens amendment to wipe all student debt, because education should never be a debt sentence. A one-off 20 per cent—but, really, effectively 7.9 per cent—debt cut is unambitious and insufficient. It won't touch the sides of the crisis. All student debt should be wiped, and TAFE and uni should be free, as it was for the Prime Minister. It's clear that Labor felt the pressure from the Greens and have realised that wiping student debt is not only possible but very popular. So I call on you to do a better job of copying our policy and go the full 100 per cent.

Student debt is a crushing burden that punishes people simply for trying to learn and to build a better life. It entrenches inequality, disproportionately affects women and people from disadvantaged backgrounds, and really serves no social good. Wiping all student debt is not radical; it is necessary. It is a step towards justice and towards recognising that education is a public good and not a commodity to be bought and sold.

We're still in the cost-of-living crisis, yet millions continue to have thousands of dollars in student debt hanging over their head. Wiping student debt would free people to start families, buy homes and pursue further study without being shackled by decades of repayments. It would make a profound difference to so many. So I urge the Senate to back this amendment and deliver real relief for millions of people across this country.

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

I thank Senator Faruqi for her amendment. This bill provides significant relief to Australian students and workers with student debt. The bill cuts 20 per cent off all student debts. It wipes $16 billion from student debt for three million Australians, which will be backdated to 1 June 2025, before indexation was applied. It also delivers important structural reforms to repayments which will benefit generations to come. As the Minister for Education has said:

… HECS blew the doors of universities open. When HECS was introduced, only about 5 per cent of the workforce had a uni degree. Now it's more than 26 per cent. Today almost one in two young people in their 20s and 30s have a university degree.

But it can be made better and fairer. Without HECS, fewer would get that choice. The number would be cut in half. This would effectively close the door behind those who already benefit from having a tertiary education. What the universities accord said was that we need more people going on to tertiary education, not fewer, and that's why the government will not support this amendment.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

The question before the chair is that amendment (1) on sheet 3368 moved by Senator Faruqi be agreed to.

Sarah Henderson (Victoria, Liberal Party) Share this | Link to this | Hansard source

I move my amendment on sheet 3376:

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

Schedule 3 — Capping student debt indexation at 3%

Part 1 — Amendments of the Australian Apprenticeship Support Loans Act 2014

Australian Apprenticeship Support Loans Act 2014

1 Section 5 (definition of WPI indexation factor )

Repeal the definition.

2 Subsection 32(1)

Omit "the WPI indexation factor for 1 June in the financial year (see subsection (1B))", substitute "1.030".

3 At the end of subsection 32(1)

Add:

Note: The AASL debt indexation factor is capped at 1.030. This means indexation cannot increase debt by more than 3%.

4 Subsection 32(1B)

Repeal the subsection.

Part 2 — Amendments of the Higher Education Support Act 2003

Higher Education Support Act 2003

5 Paragraph 140-10(1)(b)

Omit "the *WPI indexation factor for 1 June in the financial year (see subsection (1C))", substitute "1.030".

6 At the end of subsection 140-10(1)

Add:

Note: The HELP debt indexation factor is capped at 1.030. This means indexation cannot increase debt by more than 3%.

7 Subsection 140-10(1C)

Repeal the subsection.

8 Subclause 1(1) of Schedule 1 (definition of WPI indexation factor )

Repeal the definition.

Part 3 — Amendments of the Social Security Act 1991

9 Subsection 1061ZZET(1)

Omit "the WPI indexation factor for the relevant year (see subsection (1B))", substitute "1.030".

10 At the end of subsection 1061ZZET(1)

Add:

Note: The indexation factor is capped at 1.030. This means indexation cannot increase debt by more than 3%.

11 Subsection 1061ZZET(1B)

Repeal the subsection.

12 Subsection 1061ZZET(2)

Omit "or a WPI indexation factor".

13 Subsection 1061ZZET(2)

Omit "or (1B)".

Part 4 — Amendments of the Student Assistance Act 1973

Student Assistance Act 1973

14 Subsection 12ZF(6)

Omit "the WPI indexation factor (see subsection (6A))", substitute "1.030".

15 At the end of subsection 12ZF(6)

Add:

Note: The indexation factor is capped at 1.030. This means indexation cannot increase debt by more than 3%.

16 Subsection 12ZF(6A)

Repeal the subsection.

17 Subsection 12ZF(7)

Omit "or a WPI indexation factor".

18 Subsection 12ZF(7)

Omit "or (6A)".

Part 5 — Application provisions

19 Application of amendments

The amendments made by this Schedule apply in relation to working out an amount of debt as at 1 June 2025 and as at a later time.

This is a very important amendment to this bill. It has the effect of capping HELP indexation at three per cent. This would mean that HELP indexation would change to the lower CPI or three per cent, ensuring that everyone with a student debt, including future students signing up for a HELP loan, would not be lumbered with the risk of escalating high indexation such as we have seen under this Labor government. Since Labor was elected, even after changes to the way HELP indexation is calculated, student debt has increased by an alarming 14.3 per cent. This is in stark contrast to the average indexation rate under the former coalition government of just 1.7 per cent.

This is a proposal backed by Australia's pre-eminent higher education expert Professor Andrew Norton of Monash University. In our Senate inquiry last year into the bill which changed HECS indexation to the lower of CPI or the wage price index, he made it very clear that a much more certain way to proceed is to set a flat maximum indexation rate. He said that this has the benefits of simplicity and reassurance. I say to this chamber: why should anyone with a student debt face the risk of a 7.1 per cent increase in their student debt, as happened in 2023? That was simply outrageous. Why did that happen? That happened because the Albanese government failed to control inflation. Inflation was higher for longer because inflation was home grown, and because HELP indexation was directly linked just to CPI, when inflation was high, HELP indexation was high. Australian students, young Australians and anyone with a HELP debt paid a very high price.

Then the government had to scramble because, with very high indexation rates—3.9 per cent in 2022, 7.1 per cent in 2023 and 4.7 per cent in 2024—anyone with a student debt was facing an increase over those three years of nearly 16 per cent. So the government scrambled, and it changed the indexation methodology to be the lower of wages or CPI. Of course that meant that there was an adjustment in the indexation, and indexation rates did come down. That was at a cost of $3 billion. So there was some saving. But of course that only happened because wages were running at less than inflation—real wages were going backwards—and that has happened pretty rarely over the last 30 years. So it was a short-term fix, but it did not address the core problem.

We need to build confidence in the HELP scheme. We need to make sure that, if anyone is going to take out a HELP debt, they have the confidence to do so and have their potential risk capped within the upper band of the RBA's inflation band, which is, of course, between two and three per cent.

I'm bringing this amendment forward. It hasn't received the support of the coalition as a whole, but many of my colleagues have spoken to me about the positive merits of this amendment. It was something that I took forward before the last election and I think it's a very important policy that we need to embrace as a whole. But I'm bringing this forward now because there is no time to waste. The coalition needs to present a credible policy alternative when bills come before the parliament. There's no point doing this in 12 months time. This is basically saying to the Senate 'here is a credible policy alternative.' Frankly, I've even had a couple of conversations—and I won't disclose those conversations—with people associated with the Labor Party, and I think they see that this has some real merit as well. So I am asking for the support of the Senate for this amendment.

I do note with disappointment Senator Faruqi's comments about not supporting this amendment, and I say: what hypocrisy from the Greens! Senator Faruqi—through the chair: to be fair, we have been on the same page on the huge escalation in student debt, and, in some respects, particularly on higher education, we've worked quite closely together where we've got mutual interests. Now, I get the politics, Senator Faruqi, but what I don't understand is why you would oppose this amendment, because this delivers greater certainty and greater assurance for anyone signing up to a HELP loan. So I'm disappointed. I think there's been a dirty deal done between you and Labor, because that's what happens in this chamber. We constantly see deals behind closed doors—

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

Where's the dirty dealing on the opposition's side?

Sarah Henderson (Victoria, Liberal Party) Share this | Link to this | Hansard source

Senator Hanson-Young, at least I've got the courage to stand up for my convictions. So why doesn't the cult of the Greens—

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I stand up for my convictions every day. Where were you the other day on net zero?

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Henderson, please resume your seat. Senator Hanson-Young, please cease interjecting. Senator Henderson, please direct your comments through the chair.

Sarah Henderson (Victoria, Liberal Party) Share this | Link to this | Hansard source

So I just say to the Greens I'm very disappointed that the Greens would not support this amendment, because this does provide more certainty. It does provide greater assurance. It does build confidence in the HELP scheme when young Australians know that they can sign up and that they do not face the risk of escalating student debt year in and year out.

I am really concerned. I spoke last night on the second reading about my concerns about the student debt discount bill, because there are big winners and losers here. I won't repeat what I said last night in my speech on the second reading, other than to say I am going to support the bill, but I would like to see the bill improved. I think this does improve the bill. I think perhaps members of the government would privately consider that as well. I am asking the crossbench to support this amendment. This respects the fact that young Australians have had it really tough over the last three years. The cost-of-living crisis has hit young Australians really hard. Australians are struggling to put food on the table. Australians are struggling to pay the rent. And then they are faced with these massive increases in student debt, which, of course, the government has now alleviated through the student debt discount. But that is not the way to run a loan scheme. What's going to happen? Is the government going to go to the next election with another student discount costing Australians and the 24 million people who do not benefit from this another $16 billion dollars? That is not the way to run a loan scheme.

A much more responsible way to run it is to cap indexation and then for the government of the day to take its responsibility to manage inflation seriously. It imposes greater discipline on any government to say, 'We take our responsibility to manage inflation very seriously, because, if we don't, we will pay the price.' At the moment, what's happening under the HELP scheme with indexation uncapped is that Australian students and debtors are paying the price and wearing the loan scheme.

To the Greens: please reconsider your position. To the crossbench: please support this amendment. This is commonsense policy. This is sensible policy. This is acting in the best interests of young Australians seeking to enter tertiary education. This is acting in the best interests of all Australians. That's why I'm asking that this amendment be supported.

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

The government will not be supporting Senator Henderson's amendment—and, by Senator Henderson's own admission, the opposition is clearly not supporting her amendment either. We have already acted to fix indexation. In case Senator Henderson wasn't paying attention, last year we capped indexation at the lower of CPI or the wage price index. That change applied retrospectively from 1 June 2023 and ensures that HELP debts don't grow faster than wages in the future. This was a recommendation of the universities accord, and the government acted on it. That should be no news to Senator Henderson. She was the shadow minister for education when that bill was introduced. At the time, she didn't seek to amend it to limit indexation.

Senator Henderson claims that she cares about rising student debt, but perhaps Senator Henderson has forgotten the changes that she as the then shadow minister put forward at the last election to shift the cost of Commonwealth prac payments back into student debts. They released their costings on the Thursday before the election, with the hope that no-one would notice, relentlessly seeking to shift costs to students before prac payments even started. Instead of the government providing $331 per week to teaching, nursing, midwifery and social work students to offer a bit of support while they're undertaking their prac placements, the coalition wanted to make those students add that cost to their own HECS debt. According to the coalition's costing, that would look like adding $556 million to student debts over four years, driving up their HECS debt, increasing repayment times and reinforcing a fact that young people already knew: the coalition has no interest in supporting students and young Australians whatsoever.

Sarah Henderson (Victoria, Liberal Party) Share this | Link to this | Hansard source

Minister, I'm very aware of the change in indexation, because I just spoke about it. Of course, late last year, in a mad scramble, the government did change indexation. It was pegged to CPI, and it's now the lower of the wage price index and the consumer price index. I don't appreciate being belittled, when it's clear that I understood the change in indexation. Of course, the only reason there was a benefit of some $3 billion delivered to Australian students was that wages were going backwards. That's the only circumstance where wages are lower than CPI. That says a lot about the Albanese government's mismanagement of the economy over the last term of this parliament.

So, Minister, I first want to ask you the question: would you confirm—and, so as not to mislead the Senate, make it very clear—that, currently, HECS indexation is uncapped, isn't it? That's the case, Minister. HECS indexation is uncapped; there is no fixed maximum ceiling. So, under your government's scheme, we could see a situation where there are high wages, a high wage price index and a high consumer price index, and Australian students and debtors will pay the price.

And let's not forget the changes to the repayment schedule. It's estimated that, for someone earning $70,000 and paying the minimum amount, that repayment will take in excess of 50 years. You're saddling so many young Australians—primarily women, because women are more likely to work part time than men—with the risk of having this debt around their neck for 50 years, the best part of a lifetime.

This is why—and, of course, this is something that the shadow minister has also very ably argued—the student debt discount is a short-term sugar hit. So I ask you, Minister, to be transparent in the Senate and please confirm that the HECS indexation methodology that currently applies is uncapped, as that's why this amendment that I'm bringing forward is so important.

Secondly, you've raised the prac payments. The university sector, on the whole, has rejected the prac payments, because the government was asking the university sector to basically operate as Services Australia and delve into the private information of students in circumstances where universities don't have that capacity. Universities are not Centrelink.

But to your point about prac payments: you say you care about young Australians, because the intention of the change in the policy that was announced at the last election—and, yes, I agree, it was announced very late in the piece, and I've raised concerns about that—was to ensure that students right across the board could benefit from prac payments, not just those doing nursing, midwifery, social work and teaching. So I would ask you why, Minister, if you're going to celebrate this prac payment scheme, the government has failed to include other students in the prac payment scheme. That was our proposal. We wanted to broaden the prac payment scheme so that every student would benefit, because—believe it or not—there are veterinary students out there doing the most incredible job in remote and regional Australia, where there are acute shortages, and they get nothing from this government. They are trying to make ends meet too. This is just an indication that the government doesn't care about students who do veterinary science. And what about those who study allied health? Why don't they matter, Minister?

I would say to you that every young Australian going to university or to TAFE—every young Australian embarking on tertiary studies—matters, so what the government has done with its prac payment scheme is to pick winners and losers. Medical students have also raised concerns. So I would ask you why those students were excluded from the prac payment scheme as well.

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

Well, Senator Henderson appears to be debating last year's bill, not the bill that is in front of the chamber today. Last year, before the election, we fixed how HECS indexation was done. We made it the lower of the CPI and the wage price index. I know Senator Henderson has a different proposal now, which is not supported by her own party. This is a proposal that Senator Henderson might have taken to her party and to the chamber last year when we passed our legislation to fix HECS indexation. She is debating a bill from the previous parliament, not the bill that we have in front of us today. We have fixed HECS indexation, in terms of making sure that it's the lower of the CPI and the WPI.

In addition, Senator Henderson makes claims about inflation and how inflation is running. If her three per cent measure were applied today, of course, it would be higher than inflation. When we took office, inflation had a six in front of it. Because of the measures that we've put in place over a sustained period of time, inflation now has a two in front of it. As I understand, Senator Henderson is trying to prosecute both legislation and economic debates from the previous parliament. She's doing that in an apparently friendless way, in terms of not having the support of her own party for the measures that she is putting forward.

We are really proud that we have a bill in front of us today that does exactly what we said we would do before the election. Before the election, we said we would wipe $16 billion off the debt of three million Australians, and that is exactly what this bill does today. For a person with an average HECS debt of around $27,000 this bill will save them $5½ thousand. It will wipe 20 per cent off their HECS debt. We said that we were going to do that, we took that to the election, the Australian people voted for it, and that is the legislation that we have in front of us today. This is legislation that reduces people's student loan debt by 20 per cent, an average saving of $5½ thousand.

In addition to that, we are making the way in which HECS debt is repaid better and fairer. We are raising the minimum repayment threshold from around $54,000 to around $67,000. The purpose of that is to allow students to earn a reasonable wage before they have to start repaying their student debt. We want people's higher education to start paying off for them before they have to start paying off their HECS debt. At the same time, we are also reforming the marginal repayment system, meaning that people will repay their HECS debt calculated on only the proportion of income that is above that threshold—the $67,000 threshold—rather than their total annual income. These are the measures that are actually in the bill that is before us today.

This is a bill that does what it says on the label. It cuts student debt by 20 per cent. It provides an average saving of $5½ thousand per year for the average HECS debt of around $27,000. It makes the repayments fairer by raising the minimum repayment threshold to $67,000. And it also reforms and introduces a marginal repayment system, meaning that repayments are calculated on the proportion of income above the threshold rather than someone's total annual income. Under that measure, the reform in relation to the marginal repayment system, someone earning $70,000 a year will have their compulsory repayments reduced by $1,300 a year—from currently $1,750 down to $450. So this is really significant reform. In addition to doing what we said we were going to do and wiping 20 per cent off student debt, we are also making the way in which people's loans are repaid better and fairer.

We are doing that because we know that student debts are a significant burden on young people in Australia today. That's why we took this measure to the election, alongside a whole series of measures to provide cost-of-living relief to Australians. We know that people in their 20s, who are starting out in life, are just setting themselves up in life. It might be a time in life when they're thinking about buying a house. It might be a time in life when they're thinking about starting a family. It's a time in life when they're embarking on their careers. We know that too many young Australians are weighed down by the debt that they have, and that is why we took this measure, a 20 per cent reduction in student debt, to the election.

During the election campaign, when asked, 'What is the first thing that this parliament will do and will consider?' the Prime Minister said that HECS debt relief would be our first piece of legislation. And here we are today, in the Senate, ready to pass this bill, a bill that will cut student debt by 20 per cent, a bill that will give a person with an average HECS debt a $5½ thousand saving, a bill that will also improve the way in which repayments are made by making sure that people earn more before they have to start paying their debt back. The new minimum repayment threshold is $67,000 a year. At the same time, people's repayments will be calculated just on the income that they make above the new threshold of $67,000. So we are doing exactly what we said we were going to do. We said we would wipe 20 per cent off student debt, we said it would be the first thing that we would do, and that is exactly what we have in front of us in the chamber today.

And, of course, the HECS system is a really proud Labor legacy that has helped so many Australians go to university. We want a sustainable HECS system that allows us to continue to support more students to go to university and have the benefits of higher education. One of the improvements that we are making with this bill is to reform the marginal repayment system, meaning that the way in which your repayments will be calculated will be on the proportion of income above the new repayment threshold. That is a reform that has been welcomed by the architect of HECS, Professor Bruce Chapman, who said it was the most significant reform since HECS was introduced.

We know that we need more Australians to get the benefits of tertiary education. When HECS was introduced, a very small proportion of Australians actually had a tertiary education. Our government wants more people to have the benefits of tertiary education and the opportunities that it brings. These reforms to HECS will help students. These reforms will help young Australians with the cost of living and help them repay their HECS debts as well. And, of course, we are committed to more Australians being able to get the benefits of university by having a sustainable HECS system. The HECS system was introduced by a Labor government and is being improved by a Labor government. We are doing exactly what we said we would do before the election, and that is cutting $16 billion of debt on top of the $3 billion that we already cut in the previous term.

Jonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | Link to this | Hansard source

I wanted to take the opportunity to speak to this amendment. Obviously, the opposition have made it clear that we won't be supporting the amendment, not because the amendment—

Sarah Henderson (Victoria, Liberal Party) Share this | Link to this | Hansard source

Oh, Senator Duniam!

Jonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | Link to this | Hansard source

I know—to disappoint Senator Henderson! It's not because it's a bad amendment but because we felt that, in terms of this Labor bill which is before us, there would be a better time to deal with the good proposals by Senator Henderson—something that I think we would certainly like to advance as part of a policy down the track.

To that end, we have indicated, as I said in my second reading contribution, that we will not stand in the way of this legislation. Despite the claims the minister makes, we remain concerned about elements of it, especially around the suggestion that the world is all peachy now and that, because of this legislation, the world for young people—students who might be encumbered with debt—is much better. We hear claims that they've fixed inflation as if it's a permanent and ongoing arrangement. Things might be better now, but there are things beyond this government's control which have an impact on these arrangements—to the points made by Senator Henderson.

So, while we won't be supporting the amendment before us today, we do say that there are elements of it which do carry merit. I commend Senator Henderson for bringing forward amendments for discussion. The good thing about the coalition is that I work with colleagues who have minds of their own. They think. It may not be a bunch of automatons doing what they're told by their leader. We can do our own thing. It's great to have robust debate. It's great to have different opinions expressed, and that's something I will always welcome from my colleagues. Yes, it might make a bit more work from time to time, but I'm up for that. That's why we're here—to actually have a free flow of ideas and a frank exchange of views. I accept the points that Senator Henderson has made, but I don't accept some commentary provided by the minister around what this does in terms of fixing everyone's problems once and for all and the world being a better place because of this. It goes some way and costs a lot. It doesn't change things.

We've had two days of churlish political pointscoring in question time in relation to this stuff. I would say to Minister Walsh: take a page out of Minister Clare's book when it comes to being bipartisan. That's a minister who's shown us how government can work with opposition. He's been forward leaning, he's been proactive and he's been professional. He hasn't sought to score political points on this or other matters, and I welcome that. I think that's what Australians want from leaders, which is why I find it baffling that you're here progressing this legislation, we've got very serious issues on the cards when it comes to this portfolio, especially in the early learning space, and we spend time in question time scoring political points. I just don't understand how that is what a leader should do in this debate when young Australians, including those who frequent the galleries upstairs, look down on us and see what we're doing, be it in question time or at other points in the debate. I welcome Minister Clare's bipartisanship on a range of education measures. As stated, we're not going to stand in the way of government delivering some relief to young Australians, but we would certainly welcome an increased approach to bipartisanship on matters that affect all Australians, including young Australians who are embarking upon higher education and who bear costs as a result.

As stated, we won't be supporting the amendment, but I thank Senator Henderson for her efforts in this. I look forward to working with her in the future on anything we may do.

Sarah Henderson (Victoria, Liberal Party) Share this | Link to this | Hansard source

Firstly, I want to thank Senator Duniam for his very kind words. I've worked very closely with Senator Duniam and many other colleagues in relation to this and many other matters in the education portfolio. This is one of the great things about being a member of the Liberal Party. We are able to bring ideas forward from the backbench. While I'm not thrilled about being on the backbench, I have to confess, it certainly does allow all members on our side to collaboratively work with shadow ministers and to bring forward ideas in a way that's collegiate and constructive. I just want to thank all of my colleagues with whom I have worked very constructively on this amendment. I particularly want to thank Senator Duniam for his kind words and for the constructive and very close way that we have worked together.

I also indicate that I agree with Senator Duniam. I think the minister is playing unnecessary politics, and the ribbing I received yesterday during question time about being on the backbench is pretty shabby, frankly. If a member of the Labor Party wants to bring forward an amendment contrary to Labor Party policy, guess what happens in the Labor party? That member gets expelled. So, unlike the command and control in the Labor Party, where any alternative voices or ideas are shut down—we have, of course, seen one member of your party move to the crossbench as a result of her having different ideas—one of the great traditions of our party is the ability to express our views and our conscience as a member of the backbench. So I say to the minister: perhaps it is about time—I've seen this in the childcare space—you stopped playing so much politics and started acting a little more graciously. I would ask you to do so in relation to my right, and the way that my party backs my ability, to bring forward an amendment in the national interest, in particular in the best interests of young Australians and future Australians who are thinking about going to university or vocational education.

One of the really big flaws of the student debt discount bill is that it basically cuts off from 1 June. So any student looking to enrol in semester 2—of course, semester 2 is just about to start—is completely left behind. There's no discount for them. Of course, there's also no discount for future students. Also, you may not be aware, Minister, but the indexation rate which was announced on 1 April and applies from 1 June this year actually doesn't have a two in front of it, as you tried to suggest—and to mislead the Senate on, in my view. It is actually 3.2 per cent. The current HELP indexation rate applying this year is 3.2 per cent. This proposal to cap indexation at three per cent would deliver a moderate saving to each individual student and debtor, so that would deliver immediate cost-of-living relief. It's only fairly modest, as I say, but, over time, when that compounds year after year, that starts to make a really big difference.

I think what's more important about this cap is that it gives absolute certainty and builds confidence in the HELP scheme. Minister, I would ask you to correct the record and ask you to confirm that the HELP indexation rate that applies this year does not have a two in front of it but is in fact 3.2 per cent.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

The question is—were you seeking the call, Minister, or do I put the question?

Sorry, Senator Pocock is on his feet.

David Pocock (ACT, Independent) Share this | Link to this | Hansard source

I want to thank Senator Henderson for her work on this amendment. It makes a lot of sense to me to have a ceiling on indexation, given what HECS is for. HECS is there to ensure that university education can be provided to more Australians. I also recognise that, for most people who go through university, that increases their earning potential. We want people to be able to go to university and have a HECS debt but then be able to repay that debt. Clearly, some certainty around the maximum level of indexation would be really helpful in this scheme, given what we've seen happen over the last few years.

I also want to acknowledge the government's work to reform indexation. We must acknowledge that they did good work in the last term around this, changing the way that it is set and calculated. But it's only half the job done. We are still charging Australians with a HECS debt indexation—effectively interest—on money they have already repaid to the ATO. I find it the most outrageous thing—that we have a system where you can repay for 11 months to the ATO and then get charged indexation on that amount. I got the PBO to look at this, and their calculation is that, over the next four years, Australians with HECS debts will pay to the ATO $700 million of indexation on amounts that they've already repaid to the ATO. Can you imagine the outrage if banks were charging interest on mortgage repayments that had already been paid back to those banks? We obviously don't allow it. Why do we allow this system, which penalises people with HECS debts? Minister, I'm interested to hear from you. Why aren't we changing the date of indexation? I acknowledge the work you've done, but there's still more to do when it comes to indexation.

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

Thank you, Senator Pocock. I was in the process of jumping before, Chair—

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

Sorry.

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

but I understand that I didn't quite get the call. To respond to Senator Henderson, HECS indexation going forward will, of course, reflect the low inflation that we have and a CPI with a two in front of it. I can confirm that. And I appreciate the feedback on question time; it's always good to get feedback from the opposition on question time. But this is a bill that is about doing what we said we were going to do and cutting student debt.

I'll go to some of Senator Pocock's comments now. Senator Pocock, I think you acknowledged in your statement that this is a significant piece of reform and that you'd also like to see it go further. Again, the bill that we have in front of us today reduces student debts that existed on 1 June 2025 by 20 per cent. It also raises the minimum repayment threshold to allow students to start earning a reasonable wage before they have to start repaying their student debt, which is a really important reform. And, of course, we are introducing a marginal repayment system, which means that repayments are calculated on the proportion of income above the threshold of $67,000. These are really important reforms. We said we were going to reduce student debt by 20 per cent—$16 billion for three million Australians. We took it to the election, Australians supported it, and we look forward to having the support of the parliament and the chamber.

In relation to the measure that you're talking about, in terms of further changes to indexation and the dates on which indexation occurs, there were a number of recommendations which were made under the universities accord—a large piece of reform, a big agenda, the biggest review done on the higher education system in 15 years. A range of recommendations were made in that accord. The bill that we have in front of us today, of course, goes to implementing some of the recommendations of the universities accord. We have implemented, either fully or in part, 31 of the 47 recommendations. Further recommendations, like the one that you have spoken about, are being worked through by the new Australian Tertiary Education Commission, which commenced in an interim capacity on 1 July. That's being led by Professor Mary O'Kane AC, the interim chief commissioner. We look forward to coming back to the parliament with more legislation about that. We're really proud of the work that the universities accord did and of the program of work that it gave us. We are continuing to work through those recommendations. What we have in front of us today is a bill which does what it says it is going to do, what it says on the label, which is reduce student debt by 20 per cent.

David Pocock (ACT, Independent) Share this | Link to this | Hansard source

Thank you, Minister. I accept that a lot of stuff has been put into future reviews and future pieces of work. I still don't understand how there's any justification to charge indexation on amounts that have already been repaid to the ATO.

My other big question is about the government's approach to student debt and why there hasn't been a reform of the Job-ready Graduates Package. When you were in opposition, before I was in the Senate, I heard so much from the Labor Party about how bad Job-ready Graduates was and how it was going to saddle students with extra debt. Indeed, the PBO says that an additional $10.2 billion worth of debt has been added to Australians by having this program. I just don't understand why there's no urgency to actually deal with the root cause. Yes, the 20 per cent wiping of student debt is very welcome for people who have a HECS debt, but, if you are starting in the humanities next semester or have started in even the last little while, this doesn't really help at all. So when will the government move from going for the headline to going for some serious, hard reform, which is so overdue in the university sector?

If you speak to almost any vice-chancellor across the country, one of the first things they raise is Job-ready Graduates. It's not working. Your government knew that while you were in opposition and you've known that for the last three years. Rather than getting on with redesigning that program, you've punted it to another body and said that that piece of work can happen down the track. When will the Labor government get serious about reform in this area, when it comes to Job-ready Graduates and saddling students with more debt?

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

Thank you, Senator Pocock. We are very serious about reducing student debt. That's exactly why we're here in the chamber today with a bill that does what we, before the election, said we were going to do. We said we were going to wipe 20 per cent off student debt, and that is exactly what we are doing. That's $5½ thousand for the average person with a HECS debt of about $27,000. We think that that is really significant assistance to people. We said we were going to wipe 20 per cent off student debt, and that's the bill that we have in front of us today. It's really going to help young Australians who are just starting out in life.

In addition, with this bill, we are making the other reforms that I've already spoken about, which are the increase to the minimum repayment threshold and the marginal repayment reform, which Professor Bruce Chapman, the architect of HECS, has said is the most significant reform since the system was introduced. So we are making significant reform and we are doing what we said we were going to do. We have a bill in front of the parliament that the people of Australia have voted for and supported. In relation to further recommendations from the universities accord—a big body of work that we did that is more than one budget and more than one MYEFO but a blueprint for the future of higher education—we look forward to working with Professor O'Kane and ATEC to continue to progress those recommendations.

Richard Dowling (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I, too, note that this is not my first speech. It is worth pausing on the significance of this. This is the first piece of legislation tabled by the Albanese government in the 48th Parliament. That's no accident. It's a deliberate choice by a government determined to set the tone—a tone of fairness, of vision and of investment in the future of this country.

Labor recognises that many young people are facing cost-of-living burdens that were not faced by their predecessors. We want to ease these burdens because we need students to understand that they have a stake in our country. When they feel that sense of stake, they contribute that back tenfold. That's what improves intergenerational equity.

The headline-grabber in this bill is the 20 per cent debt-wipe. Less talked about, but equally impactful, are the structural changes regarding the minimum payment thresholds that the minister has outlined and how much you will need to repay and when. The bill does raise the trigger threshold from $54,000 to $67,000. Previously that $54,000 was not too far above the annual minimum wage. So, effectively, you were starting to pay HECS immediately, on the lowest of incomes. Raising this payment threshold, as the minister, Jason Clare, put it, means that you start paying off your uni degree when your uni degree starts paying off for you.

As well, we're replacing the current repayment system with a new marginal repayment system. Unlike the previous arrangement, the new system proposed in this bill will mean that nobody will take home less money after a pay rise. This is a recommendation supported, as we've heard, by the architect of HECS, Professor Bruce Chapman, who said we should have done it years ago. We're doing it now. And it has taken an Albanese Labor government to deliver it—promise made and promise kept.

If you spend even a few minutes on social media, you will see post after post from young Australians sharing their struggles—people working multiple jobs while studying; people who see the dream of homeownership slipping further out of reach; people who are doing everything right, yet feel they're just treading water. This bill is an investment in those people who have taken the brave step of investing in their learning and their future, and we should all support that.

Minister, as a senator for Tasmania, I'm very keen to understand what this will mean for those students in my home state who have a debt. My understanding is that the average outstanding debt in Tasmania is around $23,000 and that a 20 per cent reduction in that debt is worth more than $4½ thousand to each of the 50,000 Tasmanians who will benefit. If we look a bit further afield, in Victoria this bill will wipe $4.7 billion of debt for the 805,264 young Victorians with a HECS debt—including the 17,719 Victorians in the electorate of Corangamite, who, if Senator Henderson had had her way at the election, would have not got this debt reduction at all.

So, Minister, what impact will these changes have on Australian students, including those in Tasmania and Victoria, now and into the future?

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

Thank you very much, Senator Dowling, for the question. You said that too many young Australians are treading water right now with the debt that they have, and that's why we made this commitment to cut student debt by 20 per cent. It's why the Prime Minister said it would be the first order of business for the parliament, and that's exactly why we're here. It's great to hear that, for those people in your great home state of Tasmania, the average debt relief will be around $4½ thousand. I'm sure your constituents in Tasmania are really pleased that the government is doing exactly what we said we were going to do.

David Pocock (ACT, Independent) Share this | Link to this | Hansard source

Thank you, Minister. I appreciate that, but I just wanted to bring you back to the Australian Universities Accord. From my reading of it, the very first recommendation, the first mention of reform, is replacing the Job-ready Graduates Package. And I'd just like to impress on the Senate how urgent this task is. It's all good to be wiping 20 per cent of student debt, but, going forward, where is the equity in our system? Why are we penalising students that happen to choose certain courses that are now double the price? Where is the courage from the Albanese government to take on hard reform?

I want to read for the Senate what the universities accord had to say about replacing the Job-ready Graduates Package:

The JRG package needs to be replaced. Its purpose of providing price signals to influence student subject choices has failed—

Labor told us this when they were in opposition. We're now into their second term, and JRG remains in universities—

Only 1.5% of students applied to enrol in courses they would not have applied for under the pre JRG student contribution arrangements. It has left some students facing extremely high student contributions and large HELP debts that do not reflect their future earning potential, and tilted the overall cost burden of higher education further on to students and away from the Australian Government.

There is obviously a cost to reforming JRG. The government is sort of acknowledging that by wiping 20 per cent of student debt. But this is the job of government. Surely, that is why governments are elected: to actually take on hard reform. To go back to the accord:

Particularly significant was the 113% rise in student contributions for students studying communications, humanities, other society and culture, and human movement. By cutting student and Commonwealth contributions in other disciplines, the JRG package also reduced the amount of funding available to … engineering and mathematics. The Review recommends that the Australian Government reduce student contributions for those affected by JRG and moves towards a student contribution system based on potential lifetime earnings.

Yes, this isn't simple—there's work to do here—but, please, I urge the Albanese Labor government to get cracking on this. You've had three years. We can't just kick this to another body and have another review. This is urgent for our higher education sector. You just have to look across the country. It is struggling. It is struggling to actually undertake its mission of educating Australians and undertaking really important research.

We went through this with what I think was the really ill-conceived ESOS bill, where, after a long time of having had funding taken away from them, universities have gone out and relied on international students for cross-subsidisation, for everything from funding research to—if you look at universities like Western Sydney University—equity programs, providing lunch and food pantries to students who are food insecure. We're not listening to them and saying, 'Let's make your funding model sustainable.' So, again, Minister, could you maybe just outline to the Senate what the government's proposed process and timeline is for reforming JRG.

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

Thanks, Senator Pocock. Well, we are here in the chamber today with a bill that cuts student debt by 20 per cent, that cuts $16 billion of student debt on top of the $3 billion in student debt that we already cut. We are proud of the commitment that we took to the election to do that. We're proud to have this bill in front of the chamber today, and we look forward to the support of the chamber to assist students to have their HECS debt cut by an average of $5½ thousand a year for the graduate who has around $27,000 in debt. At the same time, we are also raising the minimum repayment threshold, from $54,000 to $67,000 a year, to allow students to start earning a reasonable wage before they have to start repaying their student debt. Of course, we want people to see their higher education paying off for them before they have to start paying off their HECS debt.

You talk about reform, Senator Pocock. Again, we are making one of the most significant reforms in how HECS repayments are made. This reform around a marginal repayment system where HECS repayments are calculated on just the proportion of income above the threshold is really significant—again, the most significant reform to HECS that we've seen since it was introduced to help people get an education here in this country. In relation to further work, there is always more work to do. We are implementing the recommendations of the universities accord.

Charlotte Walker (SA, Australian Labor Party) Share this | Link to this | Hansard source

I note that this is not my first speech. Today we have a chance to deliver relief—real tangible relief—to over three million Australians by supporting the government's proposal to reduce student debt by 20 per cent. Yet we are being told by some in this chamber and outside it that this move is not good for Australians. I ask you: which Australians are you talking about? For the Australians that I know—the students struggling in two casual jobs to pay rent, the young families trying to save for a house while paying back debt for degrees they finished years ago and the regional kids who left everything behind just to have a shot at uni—this 20 per cent reduction will change their lives. It will mean breathing room—a chance to build, to plan and to contribute more fully to the economy, not five or 10 years from now but now, through lower repayments.

Let's be honest: for too long we've told young people that education is a public good while treating their debt like a private burden. Indexation has quietly outpaced wage growth. Their debts have compounded while the previous coalition government allowed wages to stagnate. Students then accrued thousands in interest before they even reached the repayment threshold. The HECS system was morphing from a safety net into a slow anchor, dragging down the very people we rely on to power our future.

In Labor's last term, we changed the way HECS is indexed to fix the issue of unfair debt growth, and now, when this government proposes immediate financial assistance—wiping 20 per cent off that burden—some dare to say it's not fair. What's not fair is a 22-year-old graduate owing huge and increasing debt for a degree that society demands but refuses to value in dollars. What's not fair is that student debt has grown faster than the housing market and faster than real wages and we've just told young people to keep quiet and keep paying. What's not fair is the fact that people are deferring life milestones—starting families, buying homes and launching small businesses—not out of choice but because their debt holds them back. We are not talking about luxuries here; we are talking about dignity, about fairness and about the right to pursue an education without being trapped by it for many years to come.

This is not just a policy fix; it is a signal that the government sees them, hears them and values their contribution. It's also economically smart. Reducing student debt gives young Australians more spending power, more capacity to invest in their future and more confidence in their financial footing. This isn't just a social good; it's economic stimulus. Let's not forget that, when we invest in young Australians, we are investing in nurses, teachers, engineers, scientists and social workers. These are not future hypotheticals; these are the very people holding up our society today, and we owe them more than silence.

So, no, I will not just sit here while some pretend that student debt relief is a handout. It is a correction, and it is about restoring faith in government education policy. By backdating the cut in debt to 1 June, we are fulfilling our campaign promise—a promise we made to Australians and promise they voted for. To disregard the wishes of Australians is undemocratic. It is an insult to our political system and the core of Australian values. To those who claim this is not good for Australians I say this: young Australians are not a side issue. They are not a future issue. They are Australians now. This policy—this 20 per cent reduction in HECS debt—is something we are doing for their future and for ours. Support this measure and give these Australians a fair go. Let this chamber send a clear message today that we don't just talk about opportunity, we deliver it, that when young Australians speak, we listen, and that their future is worth fighting for, because it's our future too.

My question for the minister is: what will the proposed changes mean for students and young Australians right across the country, and why has the government taken this approach?

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

Thank you so much, Senator Walker, and thank you for bringing the voices of young Australians to the chamber today. We look forward to your advocacy on this issue, on other issues facing young Australians and, indeed, on all of the issues that you bring your voice to in our parliament.

Young Australians can look to benefit from this bill that is ahead of the parliament today. This is a bill that cuts student debt by 20 per cent. When somebody leaves university and they end up with the average HECS debt that people have today, of around $27,000, they'll see $5½ thousand taken off their HECS bill. That's what young Australians will see. They'll also see a government that is doing exactly what we said we were going to do.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

I remind the chamber that we do have a question before the chair, and that is the amendment moved by Senator Henderson. Debate has become pretty wide ranging, rather than on that amendment.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I want to put on the record how One Nation feels about this, and my feelings about this. I understand that, with the cost of living, people and families are doing it tough out there. The government has actually said, 'We gave taxation relief of $5 a week.' That was fantastic. Maybe they're not going to be paying $7 for their coffee now; they're going to be paying $2. But that's what it averages out as—one cup of coffee.

This is purely about buying the vote of the younger generation. That's all this is. What you've done here is say to them, 'We're going pay off your debt.' Forget about all the other Australians out there who are struggling and want to see benefit for their taxes. What we're going to see here—for the people in the gallery, and I think they need to understand this—is this government adding a $16 billion debt by wiping 20 per cent off the debt of students. We are already owed $81 billion in debt from HECS debts. This is another $16 billion. Yes, people are doing it tough out there, but the fact is that we cannot keep paying. People have to have skin in the game.

What I'm hearing and seeing is that too many people just say, 'I'm going to university.' They haven't got the grades. They shouldn't be at university and they're not academically minded, but we push them through a system, and the taxpayer is paying for it. This is only going to put more debt onto a lot of those people. On the PBO's modelling, if you have a graduate with a low income of 50 per cent of an average graduate income upon completion of their degree falling below the new minimum repayment threshold, it will take another approximately eight years to pay off their repayments. This will add approximately another $21,467 to their repayments. Do they know that? You're not helping a lot of people out there at all.

You're raising the threshold from nearly $54½ thousand up to $67,000 before they start paying back their debts. I bring your attention to the Family Law Act. Under that act you force a parent to pay back payments to the other parent at $27,000, but you're going to raise the minimum HECS repayment threshold to $67,000 before they even pay anything back. This is going to give relief to those people out there who have passed their degrees, PhDs, on really good incomes—about 55,000 people—a cut of about $25,000 a year. Why should someone who's a tradie—who, at 15 or 16, got in to become a tradesperson—now have their taxes go to someone who will, if they get their studies done, possibly end up getting a well-paid job? We're going to give them that relief.

I put it to the public that if you go to the bank because you want to get a loan, you say, 'This is what my income is, and this is what I can pay back,' and they stipulate what your repayments must be. If you go to the bank and say, 'Listen, mate, I want a 20 per cent reduction on my loan,' do you think you're going to get it? Do you honestly think that the taxpayer should be providing that? You knew the terms of the agreement when you signed up to this. It should not be going back to other people that owe money to the taxpayers. We have hospitals, education, infrastructure—failing systems. We are in one hell of a mess. People are homeless.

Bringing this in was a vote-buyer for the Labor Party. I've got no problem with helping those who need that helping hand, but vote-buyers are all the government ever does. They cheat the people and expect others to pay the cost for it. The people of Australia can't keep affording this time and time again. Under Labor, the cost of health has gone up 13 per cent; food, 14 per cent; rent, 18 per cent; and insurance, 36 per cent. I will be supporting Senator Henderson's amendment to this bill because I think it's going to be very good for this. One Nation will not be supporting this bill as a whole, because I think it's an absolute disgrace and a vote-buyer to get the young ones engaged. It's more handouts, and taxpayers can't afford it, so we will not support the bill as a whole.

Minister, what are you going to do in the future to rein in those people who still owe money? You're blowing it out. As I said, it's going to blow out by eight years. How are you going to address the fact that these people will have longer-term debt and another $21,000 on their debt? How do you intend to deal with that? Because that's what you're doing here. You're adding years to the debt and another $21,000 for those who don't reach that income. What are you going to do to address that?

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

Thanks very much, Senator Hanson. You talked about people who don't go to university in your question, and also people who do, and how this affects them. I want to be really clear that this bill applies to people who have loans that they have accrued through vocational education and training as well as through their apprenticeship loans. It's really important that those Australians also get the 20 per cent cut on their VET course debt and on their apprenticeship debt. We are also extending free TAFE to hundreds of thousands of Australians and benefiting hundreds of thousands of people through both of those measures.

The government is providing considerable cost-of-living relief that goes to all Australians on a range of measures and in a range of ways. In terms of how the repayment methods that we are introducing help people, in addition to cutting $16 billion of debt, 20 per cent debt relief for three million Australians, we are raising the minimum repayment threshold to $67,000 a year. That means people get to earn more before they have to start dealing with their debt. When they do reach that threshold, their HECS debt repayments will only be calculated on the proportion of their income that is above that threshold, and that is going to give people quite a significant saving. For example, someone earning a few thousand dollars above the threshold—say, $70,000—will have their compulsory repayments reduced by $1,300 a year down to just $450 a year, which is a really huge benefit to those people. Of course, the term 'compulsory repayments' is really important. People can make voluntary repayments to reduce their debt at any time they would like to. Again, this is really significant reform—20 per cent off HECS, $16 billion wiped in addition to the $3 billion wiped in the previous parliament, helping three million Australians.

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

Minister, you talked about government providing cost-of-living relief. Where does government money come from?

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

The bill before us reduces HECS debts by 20 per cent, and it's $16 billion out of the accounts of Australians who have a HECS debt. The way in which that will be provided for is through the budget, and it's a fully costed policy in the budget.

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I'm not asking if it's fully costed, and I understand what's involved with the bill. I asked you a specific question: where is government money coming from to pay for government providing cost-of-living relief? Where does the government money come from that pays for the HECS debt cut? What makes up government money? That is fundamental, but the government doesn't understand that. Neither did you predecessors. If you don't understand where government money comes from, how the hell can you justify spending it?

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

This is a commitment that we took to the Australian people at the election. The Australian people voted for it. We have a bill in front of the chamber. We look forward to support for the bill.

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

So you don't know, it seems, that government money comes from taxpayers. It is taxpayer money, not government money. This is so infuriating. You're destroying the country. You also talk about cost-of-living relief from government policies. Where is the money for cost-of-living relief coming from? I'll tell you where it's coming from—it's coming from taxpayers. Am I correct?

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

This is a commitment that the government took to the Australian people. It is funded through the budget. There are a range of revenues for the budget. The government took this commitment to the election. The Australian people supported it. We have a bill in front of the chamber. This is a bill that will reduce student debt by 20 per cent. It will wipe $16 billion of debt from people's HECS accounts, VET accounts and apprenticeship accounts. We think it's really important that we do exactly what we said we were going to do. That's why it's the first bill that we introduced to the parliament. It will provide significant assistance to three million Australians.

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

Simple question, Minister: are taxpayers on the hook for your 20 per cent cut? Do taxpayers pay it, ultimately? That's all I want to know.

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

There are a range of revenues that support the budget. The policy is fully costed. It's been put to the Australian people. It's been overwhelmingly supported. We are here today to consider a bill that reduces student debt by 20 per cent. Like many government measures, this measure is provided for in the budget.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

Minister, my understanding of the bill—please correct me if I'm wrong—is that there is $81 billion that's already owed in HECS and HELP debts, and you are going to give that 20 per cent relief to those people. One thing that has been brought to my attention is of a person who has racked up an $800,000 HECS debt. Will they also be getting a 20 per cent relief on that $800,000 HECS debt? Also, I'd like to know, if a person has taken a HECS debt—why have we got 'professional students', who finish a course, go on to do another course and become professional students, that are constantly taking out debt all the time now being relieved by the taxpayer? Why shouldn't they have to do one course and pay back the taxpayer, or attempt to pay back the taxpayer, rather than become professional students who are feeding off of the welfare of the taxpayer and now getting relief? So there is the $800,000—are they going to get a tax relief of 20 per cent off their debt?

Also, I want to know: if you thought this was a good scheme, why didn't you start moving this forward from now for those going to university with a HECS debt? Why did you include those of the past, relieving them of their HECS debt, when they've already signed the contract and knew they had to pay back the taxpayer? Who are you going to give this 20 per cent tax relief to? Everyone who has got a HECS debt?

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

Thank you, Senator Hanson. Your question goes to people with significant HECS debts, and it's important to know that those sorts of HECS debts that you've referred to can no longer be accrued. There are measures in place to stop that sort of debt from accruing. In terms of the benefit of the bill to cut student debt by 20 per cent, it does apply across the board to the amount of debt that was in student accounts, or in those HECS accounts, on 1 June 2025, and 70 per cent of the benefit goes to people on really modest incomes of around $70,000 a year.

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

Minister, in response to my question about whether or not taxpayers are paying for the bill, you have not answered that question. Instead, you've used the word 'revenues' or 'diverse revenues', fully costed. Are you not aware that taxpayers are paying for this? Taxpayers are paying for it. What you've also mentioned is cost-of-living relief. The cost of living is rising dramatically because of government policies—your predecessors' and your own. So what we've got is net zero, the Paris agreement and driving up the cost of living, and then we get the cost-of-living bill, which is paid for by who? Taxpayers. And then we have HECS relief because of the cost of living, which is paid for by taxpayers. We are on a money carousel buying votes. That's what Labor is doing. It is a money carousel buying votes, taking money from one pocket to the next pocket. But both pockets are from the taxpayers. Minister, are you not aware that taxpayers fund this government?

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

Senator Roberts, I refer you to my previous answer, and I note that you made comments about the cost of living under this government. Again, when we came into office in May 2022, inflation as measured by the CPI had a six in front of it, and today the CPI rate over the 12 months to June 2025 was just 2.1 per cent, which is really welcome news for Australians.

Sarah Henderson (Victoria, Liberal Party) Share this | Link to this | Hansard source

Chair, noting the current broad-ranging debate, I'm wondering if my amendment could be determined before the committee proceeds to further general debate.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

If there is nobody seeking the call, then I will put the amendment. The question is that amendment (1) on sheet 3376, moved by Senator Henderson, be agreed to.

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

I move Greens amendment (1) on sheet 3370:

(1) Page 22 (after line 30), after Schedule 1, insert:

Schedule 1A — Ending indexation of student debts

Part 1 — Amendments of the Australian Apprenticeship Support Loans Act 2014

Australian Apprenticeship Support Loans Act 2014

1 Section 5

Repeal the following definitions:

(a) definition of AASL debt indexation factor;

(b) definition of CPI indexation factor.

2 Section 5 (definition of index number )

Omit "section 33", substitute "section 99A".

3 Section 5

Repeal the following definitions:

(a) definition of WPI indexation factor;

(b) definition of WPI index number.

4 Section 30 (paragraph (a) of the paragraph beginning "In stage 1")

Repeal the paragraph.

5 Subsection 31(1)

Omit all the words before the method statement, substitute:

(1) A person's former accumulated AASL debt, in relation to the person's accumulated AASL debt for a financial year, is the amount worked out using the following method statement.

6 Sections 32, 33 and 34

Repeal the sections.

7 Subsection 99(5) (note)

Omit "section 33", substitute "section 99A".

8 After section 99

Insert:

99A Meaning of index number

(1) The index number for a quarter is the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Australian Statistician in respect of that quarter.

(2) Subject to subsection (3), if, at any time before or after the commencement of this Act:

(a) the Australian Statistician has published or publishes an index number in respect of a quarter; and

(b) that index number is in substitution for an index number previously published by the Australian Statistician in respect of that quarter;

disregard the publication of the later index number for the purposes of this section.

(3) If, at any time before or after the commencement of this Act, the Australian Statistician has changed or changes the index reference period for the All Groups Consumer Price Index, then, in applying this section after the change took place or takes place, have regard only to index numbers published in terms of the new index reference period.

Part 2 — Amendments of the Higher Education Support Act 2003

Higher Education Support Act 2003

9 Section 129-1

Omit ", or the indexation of that debt,".

10 Paragraph 140-1(2)(a)

Repeal the paragraph.

11 Subsection 140-5(1)

Omit all the words before the method statement, substitute:

(1) A person's former accumulated HELP debt, in relation to the person's *accumulated HELP debt for a financial year, is the amount worked out using the following method statement.

12 Subsection 140-5(1) (example)

Repeal the example, substitute:

Example: Lorraine is studying part-time for a Degree of Bachelor of Communications. On 1 June 2013, Lorraine had an accumulated HELP debt of $15,000. She incurred a HELP debt of $1,500 on 31 March 2013. She made a voluntary repayment of $525 on 1 May 2014. Lorraine lodged her 2012-13 income tax return and a compulsory repayment amount of $3,000 was assessed and notified on her income tax notice of assessment on 3 September 2013.

To work out Lorraine's former accumulated HELP debt on 1 June 2014:

Step 1: Take the previous accumulated HELP debt of $15,000 on 1 June 2013.

Step 2: Add the HELP debt of $1,500 incurred on 31 March 2013.

Step 3: Subtract the $525 voluntary repayment made on 1 May 2014.

Step 4: Subtract the $3,000 compulsory repayment assessed on 3 September 2013.

Steps 5 and 6: Do not apply because since 1 June 2013 Lorraine had no amendments to any assessment.

Lorraine's former accumulated HELP debt on 1 June 2014 is:

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

13 Sections 140-10, 140-20, 142-10 and 144-5

Repeal the sections.

14 Section 198-1 (note 1)

Repeal the note, substitute:

Note 1: A different method of indexation is used for the indexing of HELP repayment thresholds under section 154-25.

15 Section 206-1 (table item 2AA)

Repeal the table item.

16 Subclause 1(1) of Schedule 1

Repeal the following definitions:

(a) the definition of CPI indexation factor;

(b) the definition of HELP debt indexation factor;

(c) the definition of WPI indexation factor.

Part 3 — Amendments of the Social Security Act 1991

Social Security Act 1991

17 Section 19AA (definition of HELP debt indexation factor )

Repeal the definition.

18 Section 1061ZVEA (paragraph (a) of the paragraph beginning "In stage 1")

Repeal the paragraph.

19 Subsection 1061ZVEB(1)

Omit all the words before the method statement, substitute:

(1) A person's former accumulated SSL debt, in relation to the person's accumulated SSL debt for a financial year, is the amount worked out using the following method statement.

20 Section 1061ZZEP

Repeal the section, substitute:

1061ZZEP How to work out FS debt

The FS debt is the amount outstanding under the contract at the termination date.

21 Subsections 1061ZZER(2) and (3)

Repeal the subsections, substitute:

(2) A person's accumulated FS debt referred to in subsection 1061ZZEQ(2) is an amount worked out by adding together:

(a) the person's adjusted accumulated FS debt on the earlier date; and

(b) any FS debt, or the total of any FS debts, of the person that did not exist on the earlier date.

22 Section 1061ZZET

Repeal the section.

23 Subsection 1061ZZEU(3)

Omit "1061ZZET", substitute "1061ZZES".

Part 4 — Amendments of the Student Assistance Act 1973

Student Assistance Act 1973

24 Subsection 3(1) (definition of HELP debt indexation factor )

Repeal the definition.

25 Section 9A (paragraph (a) of the paragraph beginning "In stage 1")

Repeal the paragraph.

26 Subsection 9B(1)

Omit all the words before the method statement, substitute:

(1) A person's former ABSTUDYaccumulated SSL debt, in relation to the person's accumulated ABSTUDY SSL debt for a financial year, is the amount worked out using the following method statement.

27 Subsection 12ZF(1)

Repeal the subsection, substitute:

(1) If, at the end of the contract period in relation to a financial supplement contract between a participating corporation and another person, there was an amount outstanding under the contract, the person incurs on 1 June immediately following the end of that period a debt (FS debt) to the Commonwealth equal to that amount.

28 Subsection 12ZF(3)

Repeal the subsection, substitute:

(3) If an FS debt or FS debts of a person that existed on 1 June in a year (the later date) are, or include, an FS debt or FS debts that existed on 1 June in the immediately preceding year (the earlier date), the person incurs on the later date an accumulated FS debt to the Commonwealth worked out by adding:

(a) the adjusted accumulated FS debt at the earlier date; and

(b) any FS debt, or the total of any FS debts, of the person that did not exist on the earlier date.

29 Subsections 12ZF(6), (6A), (7), (7A) and (7B)

Repeal the subsections.

Part 5 — Amendments of the VET Student Loans Act 2016

VET Student Loans Act 2016

30 Section 23CA (paragraph (a) of the paragraph beginning "In stage 1")

Repeal the paragraph.

31 Subsection 23CB(1)

Omit all the words before the method statement, substitute:

(1) A person's former accumulated VETSL debt, in relation to the person's accumulated VETSL debt for a financial year, is the amount worked out using the following method statement.

32 Subsection 23CB(1) (example)

Repeal the example, substitute:

Example: Lorraine is studying part-time for a Diploma of Early Childhood Education and Care. On 1 June 2020, Lorraine had an accumulated VETSL debt of $15,000. She incurred a VETSL debt of $1,500 on 31 March 2020. She made a voluntary repayment of $525 on 1 May 2021. Lorraine lodged her 2019-20 income tax return and a compulsory VETSL repayment amount of $3,000 was assessed and notified on her income tax notice of assessment on 3 September 2020.

To work out Lorraine's former accumulated VETSL debt on 1 June 2021:

Step 1: Take the previous accumulated VETSL debt of $15,000 on 1 June 2020.

Step 2: Add the VETSL debt of $1,500 incurred on 31 March 2020.

Step 3: Subtract the $525 voluntary repayment made on 1 May 2021.

Step 4: Subtract the $3,000 compulsory repayment assessed on 3 September 2020.

Step 5: Does not apply because since 1 June 2020 Lorraine had no amendments to any assessment.

Step 6: Does not apply because since 1 June 2020 Lorraine had no amendments to any assessment.

Lorraine's former accumulated VETSL debt on 1 June 2021 is:

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

Part 6 — Application provisions

33 Application of amendments

The amendments made by this Schedule apply in relation to working out an amount of debt as at 1 June 2025 and as at a later time.

This amendment actually removes indexation for all student debts. It won't cap the debts. It won't take the lower of CPI or WPI, because that's still unfair and adds masses of debt for students—debt that actually shouldn't exist.

The government's attempt to deal with runaway indexation has totally failed—I agree with Senator Henderson on that one—because Labor's so-called solution still means that the mountain of student debt keeps growing every year, even when people are not earning enough to pay it off. Labor's move to tie indexation to the lower of CPI or WPI still resulted in a student debt increase of 15 per cent between 2022 and 2025. This is completely unsustainable. And a one-off 7.9 per cent debt cut won't fix it, because indexation will quickly offset this debt relief.

If Senator Henderson is—and, indeed, if the coalition are—serious about doing something for students, they can actually support this amendment to scrap indexation altogether. I guess it is good to see them coming on to the side of students, because what they did a few years ago was to introduce the worst, crappiest, messiest piece of legislation—the job-ready graduates bill—which increased fees for students. Arts degrees, because of that, are now $50,000. So maybe the coalition can support this amendment and also my next amendment—to dump the jobs-ready-graduates fee-hikes—because, as long as indexation exists, young people will be stuck on the student-debt hamster-wheel, struggling to keep up with annual hikes. Indexation lengthens and grows student-debt sentences. It needs to go, and I urge senators to support this amendment.

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

I thank Senator Faruqi for her amendment. The government will not be supporting this amendment. I note that abolishing indexation was considered by the Senate Standing Committees on Education and Employment in 2023. The committee recommended that the Senate not pass that bill. Indexation plays an important role in ensuring that loans maintain their real value over time and reinforces the long-term financial sustainability of the HELP system and other loan systems.

The government recognised that the system could be better and fairer. That's why, last year, we passed legislation to cap indexation to the lower of CPI and WPI, and backdated that change to 1 June 2023. That cut around $3 billion in student debt for more than three million Australians. It ensures that debts won't grow faster than wages in the future. Our changes provide relief for students and young people while continuing to protect the integrity and value of the HECS system, which has massively expanded higher education access for millions of Australians. This bill wipes another $16 billion from student debt and delivers important structural reforms to repayments, which will benefit generations to come.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

The question is that Greens amendment (1) on sheet 3370, moved by Senator Faruqi, be agreed to.

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

I move Greens amendment (1) on sheet 3371:

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

Schedule 3 — HELP debt indexation to account for withholding amounts

Higher Education Support Act 2003

1 Subsection 140-5(1)

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

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

Repeal the paragraphs, substitute:

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

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

3 Subsection 140-5(1) (example)

Repeal the example.

4 After subsection 140-5(1)

Insert:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

$8,975 x 0.030 = $269.25

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

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

5 Subclause 1(1) of Schedule 1

Insert:

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

6 Application provisions

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

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

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

Jess Walsh (Victoria, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

Thanks, Senator Faruqi. The government will not be supporting this amendment. As I've said, the Labor government is currently responding to recommendations in the universities accord. We're implementing 31 of the 47 recommendations in full or in part. This includes making the indexation of HELP debts fairer, providing cost-of-living relief for students, supporting people in the outer suburbs and regions to go to university and making structural reforms to our tertiary education system.

The universities accord made a number of recommendations in relation to the HELP system, including changing the date that indexation is applied. As the minister has said, the accord 'is not a plan for one budget but a blueprint for the next decade', to help us build a better and fairer education system. This bill wipes $16 billion from student debt and delivers important structural reforms to repayments which will benefit generations to come. The minister has said we'll keep working through the accord's recommendations and we'll take advice from the Australian Tertiary Education Commission.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

The question is that amendment (1) on sheet 3371 be agreed to.