Sussan Ley (Farrer, Liberal Party, Shadow Minister for Childcare and Early Childhood Learning) Share this | Link to this | Hansard source

I rise to speak on the Higher Education Support Amendment (FEE-HELP Loan Fee) Bill 2010 which seeks to increase the amount of FEE-HELP debt for fee-paying undergraduate students from 20 per cent to 25 per cent of the FEE-HELP loan. As this bill is virtually identical to the Higher Education Support Amendment (FEE-HELP Loan Fee) Bill 2010 fee that was considered by the 42nd Parliament, I will only speak briefly on this today. The Higher Education Support Act 2003, part 3.3.3, administers the FEE-HELP scheme, which allows domestic students enrolled in a course to access assistance of up to $80,000 to pay for fees, or $100,000 for courses in veterinary science, dentistry and medicine. The estimated financial impact for this bill provides for a commencement date of 1 January 2011. The adjustment to the cost of the measure for this commencement date is $7 million fiscal balance over the period 2010-11 to 2013-14.

FEE-HELP currently extends to undergraduate and postgraduate studies at private higher education providers in the vocational and education training sector, including TAFE, for diplomas and advanced diplomas and to some students doing postgraduate studies at university. All types of HELP schemes are subsidised by the government as students do not pay a commercial rate of interest on the loan and there is no interest paid on the debt, though it is subject to indexation. There is a significant cost to the Commonwealth as some student debt is never repaid due to death of the debtor; relocation overseas; or the income threshold, which triggers repayment by the debtor, never being reached. To partly recover that subsidy, the government currently adds 20 per cent to the value of the FEE-HELP loan. The loan fee is designed to compensate the Commonwealth for the lending amounts that are in most instances higher than those loaned to Commonwealth supported students and therefore in many instances can take longer to repay.

The review into higher education chaired by Professor Bradley recommended an increase in the FEE-HELP loan fee from 20 per cent to 25 per cent, which was based on modelling done by Professor Bruce Chapman, the architect of the HECS scheme. I note that this measure and the modelling by Bruce Chapman has attracted concern from the sector about the appropriateness of increasing the loan fee to 25 per cent, given that the loan fee for OS-HELP and VET FEE-HELP students is 20 per cent. The anomalies between the different HELP schemes have been noted by the coalition and we have advocated for a thorough review of all of the schemes to iron out any inconsistencies. Nevertheless, it is indisputable that there is a need for the Commonwealth to recover more of the subsidised cost and reduce the pressure on the taxpayer. For this reason we will not oppose this legislation. I thank the Main Committee.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I am happy to support the Higher Education Support Amendment (FEE-HELP Loan Fee) Bill 2010. Higher education is absolutely integral to the Gillard government’s vision for A Stronger, Fairer Australia. It drives economic development, productivity and high-skill jobs. I am pleased to have a number of important higher education institutions in my electorate, including the University of Queensland Ipswich campus, the University of Southern Queensland, as well as Bremer TAFE. Prior to the last redistribution, I had the University of Queensland Gatton campus in my electorate. Higher education is important in my seat. It is a driver of employment.

It is particularly important in view of the answer that the federal Minister for Health and Ageing gave in federal parliament not less than a couple of hours ago when she talked about what the University of Queensland is doing with the superclinic at the Ipswich campus. That particular campus sees doctors, nurses and physicians’ assistants trained, educated, qualified and operating in the Ipswich and West Moreton region. It is a particularly important campus.

This legislation increases the amount of FEE-HELP loan fee for units of study undertaken as part of the undergraduate courses. It is following up the recommendations of the review of Australian higher education, the Bradley review. This bill seeks to increase the amount of FEE-HELP debt from 120 per cent to 125 per cent of the loan amount for units of study undertaken as part of an undergraduate course of study. The increased loan fee will apply to FEE-HELP debts incurred on or after 1 January 2011.

The Bradley review recommended this legislative change to reflect a greater cost to government because governments effectively subsidise higher education. Many people do not ever pay back the debt owed to the government, sometimes because they pass away and sometimes because their income has never quite reached that height. This will not act as a disincentive to people going to higher education institutions, particularly universities. The criticisms in relation to this are misplaced when I look at the some of things that have been said about this particular bill. The increased loan fee will not significantly affect students at public universities in my electorate, at USQ or at UQ Ipswich campus. The USQ campus is at Springfield. The government has prohibited fee-paying undergraduate places and introduced a demand driven funding scheme, which means that from 2012 the Gillard government will fund a Commonwealth supported place for every student accepted into an eligible course of study at a public university, including USQ at Springfield and UQ at Ipswich.

Whether it is universities or TAFE courses and TAFE institutions, these things make a big difference in the lives of working-class boys and girls and young men and young women in my electorate. And while I am on my feet I want to particularly pay tribute to the Bremer TAFE, which is an important tertiary institution in my electorate. I particularly thank the assistance given to me by the acting institute director, Michael Thomas, and facilities manager, Brad Fisher. Recently I had the pleasure of representing the minister, Senator Chris Evans, in relation to opening the Better TAFE Facilities recognition ceremony for the $2 million we put into the Bremer TAFE. This $2 million has made a big difference to my constituents in the electorate of Blair, particularly in terms of what they have done. They have made a massive difference to campus. I will be speaking about that later, in a speech either today or tomorrow. That is just a way in which the Gillard government is making a difference in the lives of people in my electorate, contributing valuable investment to make a difference to the kinds of facilities that are available, particularly in the trades, particularly in computers and graphic design, particularly in metal fabrication, and also in the upgrading of equipment and workstations. These things make a huge difference in the lives of people, and not just the administration. Providing air-conditioning to learning spaces in institutions is a practical way which makes a difference in the lives of people who attend those institutions.

This legislation will not prohibit young people or mature-age students attending university. It is in line with the recommendations. Since 1989, undergraduate students have been required to pay a contribution towards the cost of their courses under what was then known as the Higher Education Contribution Scheme. This is the way we have done things for quite some time, but we need to make sure the system is viable. We need to make sure that investments in great institutions in my electorate, such as USQ at Springfield, UQ at Ipswich and Bremer TAFE at Bundamba, can continue and this sector and be viable for the electors of Blair.

Kate Ellis (Adelaide, Australian Labor Party, Minister for Employment Participation and Childcare) Share this | Link to this | Hansard source

I thank the member for Blair as well as the other members who have spoken in this debate on the impacts that this government’s changes to education, particularly higher education, are having on their constituents in their communities and on the substantial benefits the changes are bringing. In representing Minister Garrett, in summing up this debate, I also thank all of those members from both sides who spoke on the Higher Education Support Amendment (FEE-HELP Loan Fee) Bill 2010.

The bill amends the Higher Education Support Act 2003 to implement the government’s decision to increase the loan fee from 20 per cent to 25 per cent for FEE-HELP for fee-paying undergraduate students. An increase in the loan fee applying to FEE-HELP debts incurred from 1 January 2011 will enable the government to recover more of the taxpayer-subsidised cost of providing FEE-HELP loans, giving effect to the recommendation that was part of the Bradley Review of Australian Higher Education. Even with a five per cent increase in the loan fee, the conditions of the government’s FEE-HELP scheme continue to provide an extremely favourable income-contingent loan for students. Contrasting with commercial loan schemes, FEE-HELP loans are not means-tested, do not require security, are interest free, are indexed only to maintain real value and have income contingent repayment arrangements. Students do not have to start repaying their HELP loan until their income reaches the minimum repayment threshold of $44,912. If students do not repay their loan, the government meets that cost. The majority of students will not be affected by the change which will impact only on undergraduate students who choose to use FEE-HELP for their tuition fees in a fee-paying place. With all of that in mind, I urge members to support the bill.

Question agreed to.

Bill read a second time.

Ordered that the bill be reported to the House without amendment.