Max Chandler-Mather (Griffith, Australian Greens) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that:

(a) in the 2023 financial year the Government collected more money from HECS/HELP debt than it did from gas companies;

(b) millions of Australians with student debt were hit with a 7.1 per cent indexation increase last year; and

(c) many federal politicians received free university themselves; and

(2) calls on the Government to wipe student debt and make university and TAFE free.

If you've got a HECS or HELP student debt and you want to know how badly you're being screwed, look no further than Norway, where they provide free university education, funded in part by the fact that they properly tax their gas corporations. In fact, the opposite happens in Australia, where we tax our gas corporations so poorly—we let them get away with often paying no tax at all—that, in the last financial year, this Labor government made more money off student debt than they did off their special tax on gas corporations. What's happening in Australia is that students are being asked to pay more so gas corporations can pay less. Meanwhile, in Norway students are given free university education and no student debt at all, funded by making gas corporations pay their fair share in tax. I think most Australians would agree that it would be much fairer if we made those gas corporations pay their fair share in tax so we could scrap student debt and make university and TAFE entirely free—the way it used to be in Australia, by the way.

Not only is it especially young people and people graduating from university getting smashed by skyrocketing house prices, to the extent that a vast majority now are giving up on ever being able to buy a home, and not only are they stuck paying exorbitant rent increases, leaving many of them financially crippled, but, once you get past all of that, they're also left with massive student debts that are often increasing faster than they can afford to pay them off. We have a situation basically where, if you're a student and you graduate with, say, a $30,000 or $40,000 student debt, even on a good income you know that you're probably never going to be able to buy a house on your own. But, even if you do apply for a mortgage, the bank will look at your student debt, and they will make it less likely that you're able to buy a house. On top of that, even if you pay a little bit off on your student debt every year, last year the government effectively charged an interest rate of 7.1 per cent on that student debt. They call it indexation, but, just to be clear, a lot of mortgage holders paid less on their mortgage than students paid on their student debt last year. What that means is that you effectively cop a wage cut. Every year, out of your tax, comes money from your wage to pay your student debt, which is often increasing faster than you can afford to pay it off because the Labor government refuses to properly tax gas corporations to fund what people in Norway get right now—free university education so that people get to graduate completely debt free.

I mentioned before that it happened in Australia as well. In fact, a lot of politicians in this place got free university education, including the Prime Minister, who graduated from university without any debt at all and then was able to go and buy a house for about three to four times the average income. Now a student graduating from university graduates with a $24,000 debt, on average, and, if they want to try and buy a house in a capital city, sometimes those house prices can be 30 or 40 times the average income. That's how badly young people are being screwed in this country.

We have the wealth in this country to bring back free university and TAFE. We have the wealth in this country to forgive student debt and finally let people have a little bit of light at the end of the tunnel and stop this grossly unfair situation where gas corporations are paying less on the PRRT than students are paying on their HECS debt. We have the wealth to do that. We could do that right now. But what's happening right now is that we're being held back by a political and economic system completely stacked in favour of large gas corporations, big multinational corporations, one-third of whom, by the way, often get away with paying no tax at all.

This would not just be of benefit to students. How many people right now—in particular, from working-class backgrounds—are choosing not to go to university because they know they'll graduate with a massive student debt that they probably will never be able to pay off? How many people in the later stage of their lives who want to go back and retrain to become a teacher or become a nurse are choosing not to because they know they can't afford to cop the massive student debt? There is a broader social benefit that comes with providing free university education. There are countries around the world that recognise this. If the choice is between making Chevron and Santos pay a little bit more in tax so people don't have to graduate with massive student debts, and letting Chevron and Santos, who also happen to be significant donors to the Labor Party, particularly Santos, get away with it— (Time expired)

Bridget Archer (Bass, Liberal Party) Share this | Link to this | Hansard source

Is the motion seconded?

Elizabeth Watson-Brown (Ryan, Australian Greens) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

Taxing mining companies that use Australian resources is not the same as money for Australian students' university degrees. It's just not the same thing. There are some points in the motion moved by the member for Griffith that I want to highlight. Indexation is not a tax. Some years—most years—it's low; some years, like most recently, it's high. Inflation is high. It's a broader challenge that this government is looking at tackling, but I want to repeat: indexation is not tax. When someone incurs a HECS-HELP debt for their university studies, they are asked to pay it back once they reach a certain income threshold, and each year a level of indexation is attached to that amount, but it is not interest.

The system of HECS-HELP, originally HECS, was introduced first in 1989, which brings me to another point I want to pick up on. The majority of politicians in this place did not get a free university education, because the majority of politicians in this place did not start university prior to 1989. It is a fallacy to continue to suggest that. Yes, some did, but the debate has shifted. The majority of people in this place started university after that date. I myself had a HECS debt, but I have been fortunate enough to pay it off. Some have paid it off, and some are continuing to pay it off. Others don't have a university HECS debt and have instead entered parliament through a trade or some other means. What is important to say here is that this system has led to an increase in the number of Australians with a degree, from 7.9 per cent to more than 33 per cent, in the three decades since it was introduced.

I want to acknowledge that fees have shifted since Hawke first introduced them. I can remember being at university in 1999 and protesting against the Howard government's plans to tier HECS, charging those studying a science based agreed more than those studying an arts degree. We have seen the impact of the tiering of HECS: people are paying more. Then the previous government flipped that, making it more expensive for people to study arts and law than to study science. As a result we have seen fewer people enrol in the arts and we've seen people on lower salaries having a higher HECS debt.

I do have some sympathy when we talk about student debt and HECS, and part of it goes to the way in which universities have marketed to people. Some people sign up to multiple courses and finish university without a degree or without a clear direction for where they want to go, but still having a debt. I understand that there is anxiety and frustration towards this in the community, but what is being proposed here today isn't a solution for the need to reform the sector and make sure it is more targeted and means based. Indexation ensures that the HECS-HELP loans maintain their real value over time, ensuring the long-term financial stability of the scheme. The government currently holds a $78 billion HECS debt. If we were to waive that it would break the system. It would see so many not get the opportunity to go to university, effectively closing the door to many. It's a reform that the sector could not cope with, and it's the taxpayer that would have to cover the cost.

The government's budget is targeted at supporting students through boosting Austudy, Abstudy and youth allowance as well as rent assistance. The Universities Accord, which is the first significant review of the higher education system in 15 years, has released its report, and it makes 47 recommendations, including how we can improve and build on the success of the HECS-HELP system to make it simpler and fairer. There is sympathy for making HECS simpler and fairer system, but it needs to be done in a methodical way that doesn't cause the sector to collapse. As the education minister has said, the government will consider all these recommendations and respond in the next few months. I acknowledge that debt is an issue, but what's being proposed isn't the solution to ensuring that more people can get an opportunity for a good education and that we don't collapse the sector at the same time.

Elizabeth Watson-Brown (Ryan, Australian Greens) Share this | Link to this | Hansard source

Not only did many of the people in this place, including me, get their university degrees for free; they also had far better prospects for buying their own home, starting a family and living a good life. Now, if you went to uni to try and get a good job, as punishment you have a HECS debt that is growing faster than you can pay it off because of indexation. Last year the indexation rate was 7.1 per cent. That's almost double what it was the year before and almost 10 times the amount it was in 2021. It's more than a standard mortgage interest rate.

Let's look at that in numbers. If you have a debt of $40,000, that's almost $3,000 for indexation in one year. If you earn less than $62,000 a year, you wouldn't have even made a dent in your debt. In fact, you will have more debt now than when you finished your degree. Student debt rose by $4.5 billion last year and, instead of offering any relief, what did the government do? Shocker! They gave gas corporations, which make a collective $164 billion in profit, billions of dollars in tax handouts. Australia collects more in HECS than it does in taxing fossil fuel resources. Instead of tax breaks and subsidies for coal and gas corporations, the government should wipe HECS debt and make TAFE and university free and fund things that let people live a good life, like putting dental health and mental health into Medicare.

What about the rorts students experience when they are doing their degrees? They pay thousands of dollars and get stung by the indexation rate every year on their HECS debt while also paying for the pleasure of doing free labour for hundreds of hours across their degrees. For Australia to thrive, we need teachers, doctors, nurses, social workers, midwives and early childhood educators, but young people are turning away from these important professions. Nursing enrolments have dropped by almost 30 per cent and teaching enrolments have dropped by almost 20 per cent. It's no surprise that people are looking elsewhere or leaving these degrees.

Unpaid placements are crushing students. They endure long hours and weeks without pay, with no appreciation. Some even have to pay out of pocket to get a placement. Young people are having to choose between attending placements or paying their rent. Some are working 12-hour days for free and not eating because they only have enough money for the bus fare that day. Youth allowance doesn't even cover the cost of rent in any capital city in Australia. So students are having to move back home or work dangerously long hours to keep a roof over their head.

The government is doing nothing to relieve the pressure crushing young people. Just today the Guardian reports on a generation left behind. In their words:

With rising house prices, a decade of wage stagnation and ballooning student debt, young people … are living through what—

the Guardian

… describes as "a series of broken promises".

It reports on how millennials have become 'the first generation to be worse off than their parents'. Shame! Is this really the Australia we want? It doesn't have to be this way and it is up to the government to fix it. They could be getting rid of negative gearing and capital gains tax, making buying a house or renting more affordable. They could break up the supermarket duopoly, wipe student debt and tax the coal and gas companies that are burning up our future.

Andrew Charlton (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

It is a great pleasure to discuss this issue that has been put forward by the Greens, because student debt is an extremely important issue in Australia. Many Australians are facing the challenge of having to pay off large debt after their university degree has finished. But the most important thing on this issue is to understand the fundamental underlying reason for that increase in cost. That is the rising inflation that Australia has experienced over the last several years. The Albanese government was left with extremely high inflation, and that inflation has caused Australia to have a period in which many elements of our indexation system have increased significantly. Student debt is one of those areas. This is an issue that the Greens have jumped on.

Make no mistake, what the Greens are doing here is seeking to shift their party from a party that traditionally has focused on environmental issues to a party that now focuses also on economic issues, specifically the economics of grievance. There's just one problem with this strategy from the Greens, which they've prosecuted in the areas of housing, supermarkets and now student debt. That is that, for all the proposals they have to spend more money, they don't have any proposals to create any wealth that would fund the programs they propose. On issue after issue the Greens are prosecuting an economic agenda that involves more spending, but with no proposals for economic growth or to promote economic growth. In doing so, they make the underlying issue they are trying to solve here, which is inflation, even worse.

Let's take a quick look at some of the issues that the Greens have been discussing in relation to their new economic agenda—firstly, supermarkets, and the previous speaker mentioned this as well. In the last couple of weeks, the Greens have been running around suggesting that we should have divestiture powers in Australia that break up the big supermarkets. This is just one of the great examples of the Greens' policies which are harebrained and half baked. They have put no thought into the actual consequences of forcing supermarkets to split up or divest. Where is the evidence that doing so would reduce grocery prices at all? We'd suddenly have a situation where, instead of having one supply chain, we'd have to have two supply chains. Instead of having one head office, we'd have to have two head offices if we force the supermarkets to split up. There's almost no evidence that the Greens have been through any process to actually understand the consequences of the proposals they are promoting, and, where these types of divestiture policies have been used around the world, they have not been successful.

Secondly, the Greens have been making proposals on housing. They've suggested that we need rent controls, but they haven't looked at the fundamental problem of lack of supply in Australian housing. In fact, they've been blocking the government's proposals to expand supply.

Again, on issue after issue, the Greens come up with a thought bubble that sounds terrific but actually makes the underlying problem that Australia is struggling with worse. It's true in supermarkets, it's true in housing and it's true in the subject of this motion, which is student fees.

The most important thing we can do with student fees is reduce the rate of inflation so that that indexation cost comes down. That is exactly what the government has been doing. We've more than halved the rate of inflation that we inherited from the previous government, we have a range of policies to support people with the cost-of-living crisis without stoking inflation and, in doing so, we're getting that indexation cost down.

Now, the easiest trick in politics is to hypothecate—to find some pot of money somewhere and say that it should be used for something way over there on the other side of the political landscape, and that's what the Greens love to do. They hypothecate money from any particular tax they can think of or any industry they don't like to some cause that they do like. The problem is that they end up spending that money many times over. This is yet another economic topic the Greens have jumped on, but their solutions are half baked and will make the underlying problem worse.

Bridget Archer (Bass, Liberal Party) Share this | Link to this | Hansard source

There being no further speakers, the debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.