Lee Rhiannon (NSW, Australian Greens) Share this | Hansard source

The comments of Senator Carr are surprising because he has actually argued against some of his own policies when he was in government. Let us start off with the first point. He talks about how the Greens amendments could bring greater hardship to apprentices. That is clearly not the case. I would have thought that he could have seen his way that with Labor's amendment and the Greens amendment, we would have a tighter scheme. The Greens amendment actually lowers the cap on the total loan available from $20,000 to $10,000. But then more money can be accessed in the form of a grant, which is effectively the Tools For Your Trade system, which operated under Labor. That is where you have the combination. So that is not bringing greater hardship; it is actually reducing the loan and therefore reducing the debt.

To hear Senator Carr talk about possible abuse of this scheme and possible rorting by employers. Rorting by employers I will leave aside. That can happen at any time but there are measures to stop that. But in terms of the abuse of the system, I sat through so many estimates, heard arguments in this chamber when the coalition were in opposition, abusing Labor about the Tools For Your Trade and when they came up with going off to tattoo parlours and buying mag wheels, and all the other insults that were hurled around. It is quite extraordinary to hear Senator Carr now talking about a system that we are proposing which is not dissimilar to what Labor had. Listening to the debate—and hearing how Labor will not support the Greens amendments that are trying to deal with a very problematic bill that we have before us—we are left concerned and wondering if Labor will wind back this policy when they are in government. Will we return to something similar, where direct support was given for apprentices, or are we heading down the path of these big debts going to the compound interest system that we have seen now introduced for university students? That is a worry that hangs over the debate. But for the moment, our amendments would bring a much better way of supporting young people who decide to start their careers with an apprenticeship.

The TEMPORARY CHAIRMAN (21:05): The question is that the amendments and the request for an amendment be agreed to.

Question negatived.

The TEMPORARY CHAIRMAN (21:05): The question is also that clauses 32 and 34 stand as printed.

Question agreed to.

I seek leave to move Greens amendments (1) to (6), (8) and (10) to (12) and Greens requests (9) and (7) on sheet 7493.

Leave is granted.

I move:

(1) Clause 3, page 3 (line 1), after "reaches", insert "120% of".

(2) Clause 13, page 13 (after line 7), at the end of the clause, add:

(3) The application must include the consent of the person's parent or guardian, if the person is aged under 18.

(3) Page 20 (after line 14), after clause 28, insert:

28A TSL debt discharged by termination of apprenticeship

(1) Upon a person who owes a TSL debt to the Commonwealth ceasing to undertake a qualifying apprenticeship, the TSL debt is taken to have been paid, to the extent it relates to that apprenticeship.

Note: See subsections 8(3) and (4) for circumstances in which a person is, or is not, taken to be undertaking a qualifying apprenticeship.

(2) Subsection (1) does not apply to the person ceasing to undertake the qualifying apprenticeship:

  (a) because the person has completed the apprenticeship; or

  (b) at the person's own initiative.

(3) The rules may prescribe a method of working out the extent to which a TSL debt relates to a qualifying apprenticeship.

(4) Clause 31, page 21 (lines 22 to 28), omit subclause (1) (not including the method statement), substitute:

(1) A person's former accumulated TSL debt, in relation to the person's accumulated TSL debt for a financial year (the current year), is worked out by:

  (a) applying the following method statement to work out an amount (the unindexed debt); and

  (b) for each qualifying apprenticeship to which the unindexed debt relates:

     (i) working out how much of the unindexed debt relates to that qualifying apprenticeship; and

     (ii) multiplying that much of the unindexed debt by the amount that applies under subsection (3); and

(d) summing the amounts worked out under subparagraph (b)(ii).

(5) Clause 31, page 23 (after line 18), at the end of the clause, add:

(3) The amount that applies for the purposes of subparagraph (1)(b)(ii) is the lesser of:

  (a) the TSL debt indexation factor for 1 June in the current year; and

  (b) the TSL debt indexation factor for the first 1 June after the person first incurred a TSL debt in relation to the qualifying apprenticeship.

(4) For the purposes of subsection (3), disregard any law that:

  (a) amends, or otherwise alters the effect of, section 32 or 33; and

  (b) takes effect after the 1 June mentioned in paragraph (3)(b).

(6) Clause 39, page 27 (line 5), after "reaches", insert "120% of".

(8) Clause 39, page 27 (line 19), after "reaches", insert "120% of".

(10) Clause 46, page 32 (line 5), after "exceeds", insert "120% of".

(11) Clause 46, page 32 (after line 22), after subclause (1), insert:

  (1A) For the purposes of the definition of applicable percentage of repayment income in subsection (1), the person's repayment income is taken to be five sixths of what it actually is.

(12) Clause 100, page 61 (line 21), after "this Act", insert "(other than subsection 13(3))".

These are the set of amendments that bring forward a range of badly needed changes to the bill. Together, they strengthen support for apprenticeships in the very responsible way. The amendments increase the repayment income threshold and provide for lower repayment rates. This would allow apprentices to earn more before paying off the debt, again something which is very important because we know apprentices do not start off with much money. This debt is going to put them under considerable pressure and this is a way to bring a better regime into managing this matter.

We have heard much debate about how the debt is an incentive. That is again why we are bringing this forward—to be able to moderate it to some extent. The changes set out reduce the negative impacts of the legislation with, as I said, links to the repayment rates of the HECS-HELP system, so that apprentices will begin to repay at a rate of four per cent of their income once they earn over $53,000. The amendment is needed because the loans scheme could well go the way of loans for university students, to a higher interest rate and a form of compound interest. As we know, that would mean that the debt burden would escalate considerably. I know that is not what is proposed but, when you look at the progress with the debt burden that university students have to handle—and the government is proposing to change that too—we need to be aware of this, wary of it and, the Greens would argue, bring in ways to modify it.

We also have an amendment that would remove the CPI indexation. This would have the impact of reducing the real value of the loan over time. Every year an individual did not make a payment, the value of the loan would decrease at a cost to the government. The biggest beneficiaries of such a change would be low-income apprentices. Again, that brings in some protection for apprentices who start off on a very low wage, so that they do not end up with an extensive burden. This is another responsible amendment to manage what is, we would argue, not a good scheme. We are trying to put in some modifications that would allow the government to have the scheme it wishes. Labor wanted to support that but surely these modifications should be adopted.

There is also an amendment that would retain most of the current structure of the loans scheme but would ensure that, when an apprentice signs up to a loan with the current CPI interest rate, they will stick to that rate for the duration of their loan. This would prevent a situation we are now seeing where—