Allegra Spender (Wentworth, Independent) Share this | Hansard source

In Australia we believe that each generation should leave the next generation better off. I think this is something that is deeply, deeply held, and something that, as a parent, I hold in particular. But I spoke recently to a young man in my electorate, a young man called Hugo, and he highlighted to me that the feeling at the moment among young people is that that is just not happening. He said: 'I feel like I've done everything right. I worked hard at school. I worked hard at uni. I've got a good degree and a well-paying job, but right now I'm saddled with $50,000 worth of HECS debt and I do not believe I'll ever be able to afford my own home.'

Recent conversations with people like Hugo have made me question whether Australia is on the right track in terms of making sure each generation is better off than the previous generation, and I don't believe that we are. The bill that is before the House, the Universities Accord (Student Support and Other Measures) Bill 2024, will make some small steps towards rebalancing these challenges, but there is so much more to do.

The bill introduces a number of changes proposed by the Universities Accord, and in particular it will introduce changes to the HELP indexation scheme to make study more affordable. It will also change funding arrangements for practical placements, an acknowledgement that not all Australians are in a position to take unpaid work. I'm really proud that this bill is here in front of the House, and I'm really proud of the role that I and many on the crossbench have played to get it here.

Over a year ago, I and others went to the education minister and really highlighted the deep concerns that we had about the indexation of the HECS debt for young people. I had spoken to many people in my electorate and also members of my team who talked about how difficult it was watching their HECS debt go up by seven per cent a year because of the high inflation. This was meant to be an interest-free loan, and, actually, the rate that they were paying was significantly higher than the mortgage or loan rates that were being offered by the banks. It felt so terribly unfair at a time when young people are struggling with higher education costs than previous generations, rent difficulties and the prospect of not being able to really stand on their own two feet and eventually own a home themselves.

We wrote to the minister. We raised these issues with him repeatedly. We asked him questions in question time. A colleague of mine Monique Ryan put forward a petition on this topic which got, I think, hundreds of thousands of signatures in support. It isn't just the students concerned about this; it's their parents, grandparents and the whole community who are concerned. There's a real sense that the community is concerned that young people are falling behind, and it is up to us in this parliament to do something about it.

I am very pleased that the government eventually committed to these changes and has finally introduced this bill to parliament, but I want to acknowledge, as we go through the detail, that there is much more to be done. I will continue to pressure the government to change the date of HECS indexation to account for the compulsory repayments throughout the year, to update the potential guidance for the treatment of HECS by banks and to remove the highly problematic Job-ready Graduates scheme introduced by the former coalition government. I will also continue to advocate for measures that ensure that universities remain a safe and inclusive place for all.

Australia has a proud history of educational equity. While university is not free, initiatives such as the HELP scheme and caps on course fees for domestic students enable relatively equitable educational attainment, certainly, compared to some of our peers. We also have a high-quality education system that blends theory and practice. In many degrees, this involves integrated work placements that ensure our graduates obtain the skills they need to excel in the jobs of their chosen field. This is because we recognise the importance of good quality education in our evolving workplaces. Jobs and Skills Australia expect that the share of new jobs requiring further education beyond high school to increase from 70 per cent to 90 per cent over the next decade. We also recognise the role that education plays in access to social mobility and greater opportunity for all.

But affordability of education is becoming a barrier. The HELP scheme is a critical part of our education system, and it's not perfect by any means. Many of the three million Australians with a HELP debt still face a number of financial barriers. It's not just a deterrent for those deciding whether or not to undertake further studies at the completion of their schooling; it's also a deterrent for the people for whom cost is a determining factor against further postgraduate study or upskilling or reskilling as mature-age students. Either way, the impact of debt on decision-making limits individual economy-wide workforce potential and contributes to skills shortages of the future.

The average time to pay down a HELP debt now is 10 years, and the existence of this debt has implications for access to other credit, particularly mortgages. Homeownership among young people is plummeting, mostly as a result of inadequate supply that has been driving the prices up. But it's also because students are going to university and accruing student debt as well as setting back the timing to join the labour force and buy a home. Homeownership for those aged 25 to 34 has declined approximately 20 per cent in 40 years.

I want to take a pause here because I think we need to recognise why there is so much anger and concern not only amongst younger generations but also frankly the whole community. The point is that this generation of young people who are finishing school, going to university or going to work are the most educated young people we've ever had. They have put more into their studies and more into being ready for work than any generation that we've had before, but, at the same time, they are less likely to reach the goals in things like homeownership than previous generations have. So they've got this effort in, and they are not getting the reward out. This is the fundamental imbalance that we have right now, and this is what we in this parliament need to address and need to address urgently.

This comes back to why this bill is important but why this bill is only a small part. The HELP indexation model worked reasonably well in a low-inflation environment. But, when we had a high-inflation environment, with inflation at 7.1 per cent, newly graduated Australians had their HELP debt increase by thousands of dollars quite literally overnight. It increases the financial strain on graduates but also has the impact of deterring others from pursuing higher education altogether. The changes to the HELP indexation, which tie indexation to the lower of either the consumer price index or the wage price index, will provide protections to students so that, in times like these, their debt will not increase above their wages, and I think this is absolutely critical.

I want to also acknowledge the youth action committee in my community of Wentworth. Previously we asked Wentworth if there were young people out there who wanted to join a youth action committee. We have been overwhelmed by the response, and I've been overwhelmed by the strength of that youth action committee. One of the issues that my committee wants to focus on and is focusing on right now is financial literacy for young people, particularly around HELP or HECS debt, because they recognise that so many people go into university without actually understanding what they're signing themselves up to. This is of huge concern for young people as they move further through their university education. I want to say congratulations to the youth action committee on the work that they are doing. It is really important. I'm very proud that you're also advocating for this legislation and for the changing of the indexation of HELP debts, and I'm very proud to be able to stand up and support it today.

I'd now like to move on to practical placements. Prac placements are an integral part of many academic programs, providing students with invaluable real world experience. However, the requirement to undertake unpaid placements often presents a significant barrier for students, particularly those from low socioeconomic backgrounds or those who might not have the support of being able to live at home. Professions that rely most on unpaid prac placements are also in the care and teaching sectors, which have a disproportionate number of female enrolments. Students shouldn't have to choose between gaining essential experience and meeting their basic living expenses. This bill will ensure that all students, regardless of their financial situation, can benefit from the same opportunities to gain practical experience. This is not just about supporting individual students; it's also about ensuring that our future workforce is diverse, skilled and capable of fully contributing to our economy and society.

For the same reason, I support the intention of this bill to fund more enabling courses that help people prepare for undergraduate studies. These courses particularly support those from disadvantaged backgrounds and mature-age students, for whom there are greater barriers to obtaining a university degree. While I support this measure, analysis by Andrew Norton shows that a fixed funding cluster will impact different disciplines differently, with degrees such as science taking a substantial hit under the proposed system. This will require monitoring, since the policy will rely on universities to cross-subsidise these courses to avoid having the opposite effect of fewer places in certain fields.

While the measures introduced under this bill represent progress, there are still significant bugs in our education system that work against the outcomes we seek of equity, fairness and even safety. Firstly we need to have a smarter system that accounts for the pay-as-you-go contributions people make to their HECS debt throughout the year to avoid indexation on debts they have already paid. This was recommended by the University Accord but was left out of this legislation. This could be as simple as changing the date of indexation from 1 June to after the deadline of individualised tax returns.

Similarly the treatment of HELP debt by banks excessively impacts a person's borrowing capacity. Currently the APRA guidance for HECS is one sentence long and requires HECS to be treated the same as other types of loans including buy-now pay-later loans. This is despite the fact that HECS repayments are income dependent, unlike other forms of credit. The Australian Banking Association has said that it would be open to considering HECS debt differently, but, until prudential guidance says otherwise, its hands are tied. We need to get rid of the Job-ready Graduates program put in place by the former government, which is inherently unfair, not to mention completely ineffective. Attempting to funnel students into certain occupations through jacking up their fees on underappreciated courses and skill sets, such as art degrees, is highly problematic.

Second lastly, I think we need to increase the number of courses that are covered under the prac payment. I note that psychologists are not covered under these prac placement payments, and, with a significant shortage of psychologists and counsellors in our community right now, this is an area where the government should be moving, because it would make a significant difference.

Finally, we need to put in place measures, as the government has just announced this week, that ensure that education institutions are safe places for all. Recently, I've spoken to parents who've told me their children are no longer attending university in person because of abuse and intimidation—particularly, these are Jewish students. I've also spoken to women who have been assaulted on campus, and I was very proud to stand yesterday with the STOP Campaign, who are really the people who drove the changes and the establishment of the National Student Ombudsman. It will help prevent violence against women on campus, but it should make a difference to many other students as well. I look forward to working with the government over the coming weeks to ensure that the new bill introduced this week contributes effectively to that objective.

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