Amanda Rishworth (Kingston, Australian Labor Party, Shadow Parliamentary Secretary for Health) Share this | Hansard source

Today I rise to speak on the Education Legislation Amendment (Overseas Debt Recovery) Bill and the Student Loans (Overseas Debtors Repayment Levy) Bill 2015. The bills, as the former education minister explained in his second reading speech, together will create an overseas repayment obligation for Australians who have taken advantage of the Commonwealth government's income contingent loans, including both Higher Education Loan Program, or HELP, loans and HECS loans, together with trade support loans.

Labor supports efforts to improve the integrity of our HECS system, which has ensured that university has been affordable and accessible, with wider access, since 1989. Indeed, the HECS-HELP system has been the bedrock on which Australia has been able to build one of the world's best university systems while ensuring that any Australian who has the capacity and is capable of doing so can get a university degree. Therefore, Labor will support this measure that will from 1 July 2016 extend the HECS-HELP repayment framework to debtors residing overseas. As a consequence of this bill, HELP debtors residing overseas for six months or more will be required to make repayments on their HELP debt at the same repayment rates as debtors in Australia if their worldwide income exceeds the minimum repayment threshold.

Labor understands that living and working abroad is an enriching and important experience and one that should be encouraged. However, there has been a question for a number of years around the fairness of the HECS-HELP scheme in that those working overseas have not been required to meet their HECS repayment obligation while those living in Australia have.

It has long been argued that those working overseas should have the same obligations as those living here in Australia. As it stands, this bill is expected to affect 46,000 Australians living and working overseas, with an estimated 38,000 expected to make repayments on their student debt. This will equate to approximately $26 million over four years. Over the forward estimates, the bill is anticipated to save the Commonwealth about $150 million.

The government has been talking this savings measure up, but it is important to put it in context. This is a modest amount compared to the $62.7 billion that is expected to be needed to be repaid by the end of the same period. Nevertheless, the opposition supports identifying genuine budget savings, and this is one that we will support. Labor supports this legislation because it takes a responsible approach to budget savings and, importantly, the integrity of our income-contingent loan system.

The Higher Education Contribution Scheme was a world first—a Labor government reform that ensured a university education was affordable for all Australians. Since 1989 the HECS system has enabled students to borrow the price of their degree from the Commonwealth, the cost of which is borne by the taxpayer until the student's or graduate's income reaches the repayment threshold, at which time involuntary payments are made through the tax system. This program allows every Australian, even the most disadvantaged in our community, to enrol in, attend and graduate from university without having to meet the costs of their tuition up-front.

HECS has enriched Australian society by not only giving more and more students access to an affordable education but enabling more students to attend university. Since the late eighties Australia has benefitted from the input of these students unleashing the intellectual and innovative capabilities that have helped build Australia's industries and jobs. Credit needs to go to former Labor governments that focused on building one of the best university systems and ensuring everyone has the opportunity to get a university degree.

While this is an important measure that looks at the integrity of our HECS system, the side effect of one of this government's other agendas—namely, their deregulation and $100,000 degree plan—will be the impact on the sustainability of the HECS-HELP income-contingent loan scheme. It is important to recognise that, if fees under a deregulated system go the way that is anticipated—and that is not just what the Labor Party has said; it is what independent modelling has shown—HECS and HELP debt could skyrocket significantly. The Liberal Party's plan for deregulation could put the sustainability of the HECS-HELP loan scheme under enormous pressure, meaning that many people will not be able to pay back what will be simply massive amounts of debt. That will leave the taxpayer vulnerable to holding and copping that bad debt.

This is something that those on the other side have not given proper thought to. They have said that they want to deregulate the system and see a significant increase in fees. While we have focused on and discussed the impact that that would have for students, it also would have a massive impact for the HECS-HELP debt scheme. It is important to recognise that, potentially, the sustainability of that scheme will be threatened when we see the debt that students have to take on skyrocketing significantly.

Previously, there was concern about chasing HELP and HECS debt from overseas because of the view that it was likely to cost more than it was to raise. However, with the advent of income-contingent loan schemes in the United Kingdom and New Zealand, where a good proportion of Australians work and reside, this landscape has changed significantly. However, there are still considerable challenges with the implementation of this measure. It is important to note that the challenges will be significant, not least making Australians currently living overseas aware of their obligations and dealing with Australians who change their plans and decide to work in a foreign country while travelling overseas. Ensuring that those individuals understand their obligations and the changes will be an important challenge and something the government will have to consider in the implementation of this measure.

The changes that have been observed in both New Zealand and the UK with regard to chasing overseas debtors have shown that, as of 2013, one quarter of England's overseas student debtors were in default, while 60 per cent of New Zealand's overseas debtors had overdue payments. The overseas examples indicate that there are problems with recovering debt, and the government will certainly have to turn their attention to how they will implement this measure. The government will have to ensure that Australians currently living overseas who continue to be covered by this scheme are made aware of their obligations and that Australians who do change their plans recognise their obligations.

However, despite the challenges that will be faced in the implementation of this legislation, Labor will support this package that is aimed at improving the integrity and fairness of the HECS-HELP system. While this bill will make a modest saving, we recognise that it is a saving nonetheless. Labor takes a responsible attitude to decent savings that are about fairness and are in the interests of the Australian public.

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