Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the amendment be agreed to.

Tony Zappia (Makin, Australian Labor Party, Shadow Assistant Minister for Medicare) Share this | Link to this | Hansard source

We have a Prime Minister who talks about an innovation nation but then undermines the very education system that will lead us to an innovation nation. He does that through the various and many cuts to the education funding that has been provided for years in the past.

The dominant purpose of this legislation, the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018, is to reduce the income threshold at which Higher Education Loan Program repayments commence. Currently, once a person who has borrowed money under that scheme earns $54,869 they begin repayment of that loan. The government wants to reduce the amount from $54,869 to $45,000 from 1 July 2019. The first question that needs to be asked is: what is the basis on which the government warrants and justifies a lowering of that figure of $54,869, established years ago? One might think that, if anything, over that period the figure would increase rather than decrease. We need to go back to the original proposition for setting that figure in order to understand why the government is on the wrong path when it wants to reduce the amount to $45,000. The changes will save the government some $245 million over the period from 2017-18 to 2020-21. A further $32.3 million in savings will be made through changes to the Student Financial Supplement Scheme.

I add my voice in opposition to this legislation. Amendments to legislation usually arise because of unforeseen consequences of laws that have been brought in, changed circumstances, or problems that arise with the administration of a particular piece of legislation. But those things are not the case with this legislation. This legislation, and the resulting change, is driven by the government's mismanagement of its budget and the Australian economy. This legislation is about the Turnbull government's economic incompetence, which ironically this very legislation compounds. The Turnbull government has reverted to its ideological mantra of making the poor pay much more. That's what this legislation does: it transfers more cost, more burden and more pain onto poorer people. People with $45,000 of annual income are far from rich. It is not a high income. As other speakers have made clear, it is just $9,000 above the minimum wage.

This legislation takes Australia back in a direction where those who can afford higher education get it; those who can't afford it miss out. That is exactly why the scheme was brought in—to try and reverse that discriminatory trend, and it was intended to reverse that trend because it was in the national interest to do so. To give every student a chance to get a university education is something that this nation should aspire to. Every nation that understands the value of a good education does exactly that, and yet we know from statistics that we have seen, time and again, that children from low-income homes are still less likely to go to university. In fact, I don't have the latest figures, but I can recall some statistics being done in the region that I represent some years ago, when the University of South Australia established a campus in Mawson Lakes in my electorate. One of the purposes for establishing the campus there was that children from the northern suburbs of Adelaide were less likely to go to university, and one of the ways that we were hoping to encourage them to do that was by establishing a campus in close proximity to them. It had the desired effect. The statistics at the time showed that the children from those low-income families were much less likely to go to university. Indeed, that was a loss to the whole state and to the nation because the truth of the matter is that many of those students had the ability to go on to professions and make a real contribution to the country, if they were only given the chance to do so.

We saw from statistics that were presented in the Labor senators' dissenting report, when this legislation was sent for inquiry by the Senate Education and Employment Legislation Committee, that between 2008 and 2016 there was a substantial increase in the number of disadvantaged students who took up university education as a result of this very scheme. I want to quote some of those figures because, whilst some of my colleagues have already done so, I think they are worth re-emphasising. In 2008, 24,311 students with a disability were enrolled in university; by 2016 the figure had more than doubled to 50,206. In 2008, 7,038 Indigenous students were enrolled; there were 13,320 by 2016—again, almost double. For students from low socioeconomic status backgrounds, 90,467 were enrolled in 2008; there were 140,462 in 2016. For regional and remote area students, 110,124 were enrolled in 2008; that figure was up to 163,292 by 2016. Those figures confirm that the system is working to do exactly what it was intended to do, and that is to give everyone, including low-income families, a chance to send their children to university. Every smart nation knows that. We know that the best investment that we can make in our nation is to invest in our children through having them educated and having them achieve some professional qualification.

The fact is that students from poor areas are just as capable as others—and I want to stress that point because it seems to me that there's something being missed by this government. If we can ensure that we capitalise on the ability of everybody in this nation, then the nation will prosper. Yet this bill is really saying, 'If you can't afford it, you won't go to a university and, therefore, what you might have otherwise been able to contribute to this country will be lost forever.' I think that that is a very foolish approach to take.

This legislation also comes at a time when every nation in the world is competing in a global economy, where Australia's best hope of remaining competitive is through education and innovation. It's something the Prime Minister, as I said at the outset, acknowledges, and yet he does the opposite when it comes to the funding.

It is not just about education in the higher education sector because, when you look at this government's record, it goes right through—$17 billion having been cut to our education system in our primary and secondary school areas, $3 billion cut from TAFE and vocational education and training by this government, and then the $2.2 billion now cut from education. So it doesn't matter which sector of education we're looking at; this government wants to cut the funding which, in turn, will cut the outcomes.

For my state of South Australia, it means $160 million will be cut from universities in that state. That comes on top of the $210 million that was already cut from schools over the next two years, which we have spoken about in this place on previous occasions. Now, to add insult to injury, the government is telling students that they will have to start making their repayments at a much lower level, at a time when they know that penalty rates are already under threat, when they know that unemployment is already high and when they know that the South Australian economy has already been hit by the devastation caused by the closure of the car manufacturing industry. At a time of other hardships, to then say to young people, 'You now have to start making repayments at a lower level,' I think is a very cruel blow indeed. The government does that, as other speakers have quite rightly alluded to, at a time when this government says that it can't afford funding education programs in this country but it can afford $65 billion of tax cuts to corporate businesses.

This government has its priorities wrong and its understanding of the benefits of what it does is completely wrong because, as we know, and as the government's own studies have shown, the $65 billion of cuts to the corporate sector will result in a minuscule addition to our economic growth. Yet the cuts that are being made to higher education will make an enormous difference to the economic growth of this country because our economy will only prosper if we are a smarter nation. That kind of logic, quite frankly, astounds me when I hear the government and its members speaking about why these cuts are necessary and why the $65 billion of corporate tax cuts are also necessary.

There haven't been too many members opposite who have spoken on this legislation, which just highlights that they don't feel comfortable with it because they know it's a retrograde step but, nevertheless, arguments have been made by those opposite. The HELP debts, which have blown out from $23 billion in 2010-11 to $55 billion in 2016-17 have to be reined in. Lowering the repayment threshold will reduce the debt, and the income generated by reducing that debt will help support other education initiatives is a flawed argument and does not withstand scrutiny.

The debt blowout can be attributed to several factors. The first one of them is the mismanagement by this very government of the shonky operators of vocational courses in this country, costing Australian taxpayers billions of dollars that will never ever be collected because those people that were listed in those courses never completed them. If they got their certificates, they were not worth the paper they were written on and they will never be employed under the so-called profession or qualification that they supposedly undertook. That's the first reason and that was again bad management by this government.

The second reason there is a blowout is that we have universities taking on students for courses for which there is already an oversupply of graduates and that results in the graduates then not being able to get work. And if they can't get work then obviously they can't repay the money. And so there is, in my view, a responsibility on the universities to ensure that if they offer courses, there's a reasonable expectation that those students who undertake those courses are likely to get work at the end of completing their courses.

And the third reason is that it seems to me that if you're going to have a system which enables students from low-income households to go to university whereas in the past they didn't then, of course, the numbers of students going to a university will increase. We saw that through the statistics that I quoted earlier. If we're going to get more students going to university, then of course the cost to the budget will increase in the short term. That's a fact, if you get more students and we have a loan scheme that they can tap into.

The last point I want to make is this. It seems to me that the government is effectively acknowledging that the students who complete their courses are unlikely to get work in the professions for which they have studied, because there would be very few professions that would pay just $9,000 above the minimum award wage. So, if the expectation is that the repayment starts at $45,000, there is an underlying expectation that those people are not going to be working in the very areas for which they have studied and have become qualified in. If they did, one would expect that the income level would be much higher. So the government is effectively saying, 'We know that you're going to do courses and we know that you're not going to get a job from them, but if you get any work of any kind then you will have to start making the repayments towards the funding for which you took out the loan.'

That goes entirely against the very principle for which the loans were established in the first place—on the basis that loans would be provided so that young people could acquire qualifications in universities, which they would otherwise not be able to do, and when they had qualified and then secured work in that area, which would have in turn given them a higher income, the Australian taxpayers would—quite rightly—say, 'Since we helped you get to that level of your profession and that level of income, it is now time for you to start making some of the repayments.' That's the very principle on which this scheme was established, and that's exactly what this government is trying to undermine and why we on this side of the House will oppose it.

Karen Andrews (McPherson, Liberal Party, Assistant Minister for Vocational Education and Skills) Share this | Link to this | Hansard source

I thank those members who spoke on the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill. The bill amends the Higher Education Support Act 2003 and other legislation that underpins student loans, including the Higher Education Loan Program, or HELP, and the Student Financial Supplement Scheme, or the SFSS. It introduces a new set of repayment thresholds for student loans, changes indexation arrangements for repayment thresholds, amends the order of repayment of some student loan debts and introduces a combined loan limit for HELP. The policy measures that are the subject of this bill will ensure that Australia's world-leading income-contingent student loan system can continue to be available to future generations of students. Australia must face up to the task of putting our higher education system on a more sustainable, responsible path for the future. The measures in this bill are proportionate, and they help achieve that goal.

I wish to advise the House that there was an error of fact in my second reading speech, and I wish to correct it. The error does not go to the substance of the bill or its provisions. It was an error in descriptive material about how VET student loans course caps operate. The second reading speech stated that VET student loan caps apply per year rather than per course. In fact, with the VET student loans program that was introduced in 2017, the Turnbull government put in place loan caps on the amount of financial assistance available to be borrowed per course. To be clear, 2018 indexed course caps for VET student loans ranged from $5,075 up to a maximum of $15,225, depending on the course, with an exception for specified aviation courses, which have a loan cap of $76,125. A revised second reading speech has been prepared and will be tabled with the bill when it is introduced in the Senate.

In summing up, I also present a correction to the explanatory memorandum that was tabled with the bill on 14 February 2018. The original explanatory memorandum stated that the changes to the combined HELP loan limit would have a cost of $22.9 million of fiscal balance over the forward estimates, or a cost of $10.3 million in underlying cash. In fact, the financial impact of the bill as introduced is a saving of $3.2 million in fiscal balance terms over the forward estimates and a cost of $9.9 million in underlying cash terms. Today I am tabling a correction to the explanatory memorandum in those terms. I note that the amendment I am moving today will have an additional minor financial impact.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this, the honourable member for Griffith has moved as an amendment that all the words after 'That' be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

Question negatived.

The question now is that this bill be now read a second time. There being more than one voice calling for a division, in accordance with standing order 133 the division is deferred until after the discussion of a matter of public importance. The debate on this item is therefore adjourned until that time.

Debate adjourned.