Dai Le (Fowler, Independent) Share this | Hansard source

Minister, as you know, when my mother resettled in Australia she was told that we had the best education system in the world. She knew, as we all do, that the best way to move upwards in terms of economic and personal development is through the education system. It's the best driver of social mobility. For residents of Fowler, the ladder provided by a university education is extremely important, as you know, Deputy Speaker Andrews.

Our people come from amongst the most culturally diverse backgrounds in Australia and from an area of high socioeconomic need. Assistance provided by HECS-HELP and FEE-HELP loans are invaluable. Having harangued the government for two years about the spiking index rate on student loans I was pleased to hear the Treasurer announce that indexing would be changed to reflect the lower of the consumer price index or the wage price index. This current reduction to the WPI will see three million students' loans reduced, and I welcome that. But I have to say that this change is little more than a sticking plaster where surgery is needed. Many may not realise that the WPI has only been lower than the CPI on four occasions this century. Whatever the immediate benefits this policy change will provide, it cannot be described as a permanent solution.

Neither does the budget of 2024 do anything to address the Job-ready Graduates Package of the Morrison government. This package saw a huge increase in the fee costs of arts degrees to shoehorn students into STEM subjects. Whilst we all understand the need for STEM graduates and appreciate the higher wages on offer for such people, this is utilitarian and has discriminatory effects. Women are more likely to study arts degrees, and men are much more likely to study STEM subjects. Women and those with arts degrees are likely to have lower earnings over the course of their lifetime for a variety of logical reasons, so this package discriminates in a way that disadvantages women.

Relying on price signalling in an effort to funnel students into courses that the government minister things are 'good for the country' is patently ridiculous. Students choose areas of study that they are good at and are interested in. That's why arts students have continued to enrol, at increasing personal financial cost, despite this discriminatory policy.

Economist Bruce Chapman, who devised the HECS system, doesn't think that the indexing shift is a sufficient answer, and neither do I. Under the current system, those with student loans must make a payment for their debt once they cross the threshold of annual income currently set at $51,550. Once this threshold is crossed there is a one per cent payment on loans required from the whole amount. This provides a perverse incentive to keep earnings below that amount once a person's earnings approach the threshold. It is also regressive because one per cent is applied regardless of how far above the threshold a person is.

Graduates from Fowler are likely to begin their post-university careers in lower wage brackets. This means that, while they may remain below the repayment threshold for longer, they also face a ballooning HECS loan, as the indexing continues to hike it up. None of this will help them save a deposit for a home loan. They want to pay back these loans, but why aren't repayment thresholds treated more like income tax? Minister, could we look into this? There should be a minimum threshold under which no repayments are necessary and a percentage repayment of earnings above that level. This way the threshold could be reduced below $51,550, with perhaps a higher than one per cent payment on earnings above the minimum amount. This would encourage wage growth and avoid debt ballooning.

The cost of living is going up, and the government is continuing to preside over an inflationary economy. I find there was little in this budget that I could take back to aspiring young people in Fowler to encourage them that their lives would be improved.

Australians demand a lot from our education system because we pay a lot for it. We also expect that our tertiary institutions will have a strong desire to offer education to as many of us as possible, regardless of our social, cultural and financial circumstances.

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