Zali Steggall (Warringah, Independent) Share this | Hansard source

We know intergenerational inequality is growing, and growing rapidly, and the cost of university degrees and the HECS or HELP debt, as it's known today, plays a major part in that generational inequality. My parents' generation had free university. My generation had a system that did not burden us with too much debt. What we are now seeing, what I am seeing with my children and their friends and so many of the younger generation, is they are burdened by, I would say, nearly an unconscionable debt when it comes to how they are going to face their prospects.

This will impact young people's ability to get ahead. We know some 2.9 million Australians have some form of HELP debt, and it takes them close to 10 years to repay it in full if they are so lucky as to be able to. The current HELP system impacts a number of young people attending university to be our future workforce, and it also impacts how they choose their subjects and what they are looking at. It also impacts older Australians that are returning to university to retain or gain further qualifications. We need them—we need more people to be considering this. We know current younger generations will have up to 10 different jobs in their work lives—it's changing dramatically—and that will mean retraining. We can't have a situation where, to meet our skills demand—which we want people to do, especially older Australians where an industry they have been may be a dying industry, or something where the prospects are not there but there are new opportunities that require retraining—we are not burdening them with so much debt that there's a disincentive to go forward and do that. We know many in that category of retraining or gaining further qualifications are, all too often, women—older women—and that really impacts them and creates a really big inequity.

I am strongly urging the government—and I support this bill—to do all we can to ensure younger generations and those looking to retrain and upskill can do so confidently without being burdened by this unreasonable amount of debt. We know so much of our economic future as a nation relies and is linked to many being able to retrain and us being able to fill all the areas where we have significant skills shortages.

This bill is a start, but let's get real—much more needs to be done. That includes the further reform when it comes to how and when indexation of HELP loans occur. It's just unacceptable that the ATO can withhold a HELP loan repayment from someone's salary or pay on a monthly basis during the year, but that that amount is not applied to their HELP debt in real time. Essentially, indexation is applied to HELP loans by the ATO on 1 June each year, but the ATO does not process the loan repayments that it has withheld, that a person has not had the benefit of, until after personal tax returns are processed. So you have this inequity whereby, despite the payments being withheld from someone's pay, they're not applied to reduce the debt, which is ultimately indexed and grows.

Whilst it is a welcome change in this legislation, this system does not make sense—that the timing and how indexation occurs continue to be as they currently are. The government should legislate to either allow for repayments in real time or move the day of indexation from 1 June to later in the calendar year, to reduce the burden on those paying back their debt and stop the double dipping effect, in essence, that it has on people with their HELP loans. It is certainly not a system we see in any other area that the ATO engages in, and it's quite nonsensical that it remains in this case. The government, I know, is well aware of this, and I thank the minister for our discussions around this, but I think we need to hurry up with the change. This really is a burden on top of so many younger people and people that are looking to further their skills, to retrain and do further study.

But I do acknowledge that this bill represents progress, especially progress when it comes to the huge mobilisation of young people in our communities who called on the government to do this. In fact, we first met with the minister back on 1 June 2023 to raise the issue. At the time, we had the situation of 7.1 per cent of indexation, meaning debts were growing at a rate that was incredibly alarming for so many.

What does this bill do? The HELP debt indexation rate will now be linked to either the consumer price index or the wage price index, whichever is lower. That is welcome.

That will create a significant reduction. It is also really good to see the establishment of the Commonwealth prac payment. This payment will support students undertaking mandatory workplace placements required for university and vocational education qualifications. It's good progress. We know having to attend that vocational placement is often prescriptive and simply unaffordable for many, so I know that goes some way to alleviating the placement poverty that many have faced.

However, it is still picking winners; we are only covering some placements, not all mandatory placements for certain qualifications. I've raised that with the minister, and the answer was simple—that ultimately it's a budgeting question. At the moment, it's a question of picking priorities. I would argue that this is an important aspect. If we're going to fill skills shortages, we need to make sure any qualification that requires a vocational placement has access to the prac payment. So the bill is a good start, but more needs to be done to reform the student debt system and to support those already in study.

There is no doubt that a lot of the work and the progress of this bill are a result of the final report of the Universities Accord, and that important work was led by Professor Mary O'Kane AC, with some expert support from a range of individuals with expertise in higher education. It's important to note the final aspects in that report—that higher education is integral to Australia's future and that 'the knowledge, skills and research it produces enable us to be an economically prosperous, socially equitable and environmentally sustainable nation'. If we do not invest in our future in training and qualifications, we simply will not be at the table of the future economy of a net zero world. And we will really be selling our future generations short if we don't take care of that.

We know there is already a lot of pressure on many sectors in relation to skills shortages. We need more teachers for early childhood through to secondary schools. We need more doctors and nurses, more engineers and more skilled trade people. It is particularly key as we look to the transition to the net zero economy. In the next five years, 90 per cent of new jobs will demand tertiary education, yet we're seeing a decrease in completion of bachelor degrees, and a worsening skilled worker shortage looms. For example, for AUKUS, we know there is going to be a significant demand for engineers and there's a requirement that they be Australian-born or Australian citizen engineers. We don't qualify anywhere near the necessary number of engineers through our university system to meet that demand. That's just AUKUS, let alone the requirement we know we will have around the transition to clean energy and the transition that so many of our industries need to do. That's just one other area where we don't talk about it enough, but this is a major problem to many.

We know that the cost-of-living crisis and the spike in inflation haven't helped this sector and this debt. They've put many under pressure, and I know, for example, that many businesses in Warringah are also deeply affected by skill shortages. It's where we need to look for innovation and for ways to get efficiencies and to support so many more of our industries. For the government to meet Australia's needs and create the future we want for our society, our education system needs to be equitable, especially for marginalised groups. So I do wholeheartedly support the bill. It shifts the dial ever so slightly on the issue of fairness and an equitable future. I want to thank the many who raised their voice on this issue, because it's a real power of democracy to put pressure on government to move on an issue.

I think it's also important from a gender equality point of view. We know that many women are impacted by this. According to 2022-23 data from the Australian Taxation Office, women make up up to 60 per cent of those who still owe repayments on their HELP debts. The average debt is $26,000, and women's debts are larger, because they owe 58 per cent of the overall debt. Writing for Women's Agenda earlier this year, Dr Marg Rogers noted that the indexation of HELP debt 'is more likely to hit women harder because women take longer to pay off their student loans'. She noted that that is unfortunately because women, amongst other factors:

1. Take more career breaks to care for children and other members of their families,

2. Are more likely to work part time, reducing their income and amount they repay,

3. Earn less in feminised care industries,

4. Earn less overall,

5. Are more economically impacted during a relationship breakdown, and

6. Struggle to work in regional, rural and remote locations due to the lack of services (e.g. early learning, disability care and aged care).

But, still, young women studying at universities are set to benefit from the measures in this bill. The prac payments for those training in teaching, nursing, midwifery and social work are a welcome development. From July 2025, eligible students will be able to access some $319.50 per week while they're undertaking a placement; a means test will apply. Placement poverty is a real issue, including for those in Warringah, and I am glad that there is now a program in place to help alleviate that for them. And, yes, of course, many in those sectors are women; these are highly feminised sectors. According to the statistics of the Workplace Gender Equality Agency, women make up almost three-quarters of education and health students at Australian universities. In nursing, women are nearly 90 per cent of the workforce in Australia.

There's no doubt that this is another step that the government has taken in relation to greater gender equality, and I very much welcome it. Along with paid parental leave, superannuation and child care, it's another step in the right direction, but of course more can be done. Whilst the debt write-off, indexation change and prac payments in the bill are welcome, they're only a start. For example, there are many recommendations remaining from the Universities Accord, and I encourage the government to act on further changes before the end of this year, particularly on that change to the indexation date that I referred to earlier. We know that will make a tangible difference to students, and we really need to go a lot further.

I've received a lot of positive back from Warringah residents and students since it was announced, many who had in fact signed the petition from the member for Kooyong. Many medical students and veterinary students and those studying to become psychologists will miss out, and these are key industries in which we know we have major shortages. So I encourage the government to also look at medical students, veterinary students, those studying to become psychologists and all other areas requiring prac placements—at anyone who has a practical element in their degree and cannot access a payment.

In the last parliament, the Morrison government also introduced some very controversial changes to the cost of tertiary education—in particular when it came to humanities degrees. I strongly opposed those changes then and I call on the government to revisit and reverse the decision. It inappropriately, substantially increased the cost of humanities degrees compared to others. As a society, we need all levels of education. We really will benefit from having all areas available to many, especially to young people. So I think it's really important that, while the government is making improvements here, it looks to reviewing the changes that were made by the previous government when it came to the cost of university degrees and, in particular, humanities degrees.

I know there are a number of amendments that will be discussed that will go to some of the points that I have raised and I look forward to further questions with the minister in relation to that process. But I do commend the government for taking this good first step in relation to this problem.

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