Helen Haines (Indi, Independent) Share this | Link to this | Hansard source

I move the amendment circulated in my name:

(1) Schedule 4, page 34 (after the table), at the end of the Schedule, add:

2 Review of amendments

(1) The Minister must cause an independent review to be conducted of the operation of the amendments made by this Schedule and any Guidelines, regulations or other legislative instruments made for the purposes of those amendments.

(2) Without limiting subsection (1), the review must consider:

(a) the effectiveness of payments provided to students undertaking courses in teaching, nursing (including midwifery) or social work; and

(b) the appropriateness of expanding payments to students undertaking courses that require university placements, including allied health courses.

(3) The review is to start as soon as practicable after the third anniversary of the day that this Schedule commences.

(4) The persons who conduct the review must give the Minister a written report of the review within 6 months after the commencement of the review.

(5) The Minister must cause a copy of the report to be tabled in each House of the Parliament within 15 sittings days of that House after the report is given to the Minister.

The burden of unpaid placements is hurting students right across Australia, particularly in the regions. In a cost-of-living crisis, students should not be expected to work for free. Students should not be expected to make difficult choices between their studies and their financial security. In Australia, in 2024, that's simply not good enough. When we make it harder for people to receive higher education, we slow the number of graduates studying in or moving to our regions. It means we will fail to address critical workforce shortages in hospitals, schools and aged care, and our regions will be held back.

While I support the government's plans for paid placements, this bill needs to go further if we're to meaningfully address workforce shortages in our communities. Placement poverty isn't fixed yet. The omission of allied health professionals from the government's plans for paid placements is an obvious gap, and it's why I've put forward an amendment requiring the government to consider the inclusion of allied health in the paid placements program. Allied health professionals are vital to our healthcare system. Professionals such as occupational therapists, radiologists and physiotherapists provide life-changing services in the NDIS, the hospital system, the veterans entitlements system, aged care and schools.

Our healthcare system and social services would be worse off without allied health, and they need our support too. For example, occupational therapists and physiotherapists complete more than 130 days of clinical placement, while dietitians complete a minimum of 100 days. Medical radiation practitioners complete 52 weeks of placement over four years. For these allied health students, the impact of unpaid placements can be crippling. Not only is there the cost of undertaking the placements, such as travel and uniforms; there's also the lost income that comes with giving up other paid work. When a placement is in a distant town or city, students must also find and pay for their own accommodation.

Consider Hogan Quinn, a third-year physiotherapy student studying on the border of my electorate of Indi. He says that the compulsory placement requirement means he will need to give up his existing job for up to six months, all while paying additional accommodation and travel costs related to his placement. But Hogan is not alone. A 2022 survey found that more than a third of students lost their entire weekly income because of compulsory placements. Ninety-six per cent of students said they didn't have enough money to pay for food, clothes and travel. I refuse to accept that placement poverty is the cost of getting an education in this country, and that's why I'm calling on the minister to include allied health when the paid prac guidelines are released.

I also have concerns about the design and implementation of paid placements. The minister says that paid placements will be means tested, but we don't know what this will look like in reality. The minister says that payments will be delivered through universities, but universities are not set up to conduct means testing nor to administer complex social security payments. How can we expect universities to suddenly fill the role of the ATO? Regional universities have told a Senate inquiry into the bill that they don't feel equipped to deliver the payments and have asked why they cannot be administered similarly to other social security payments. The department has admitted this is a new payment and that there may be teething issues.

With all of these questions unanswered or unclear, and the glaring omission of allied health, I've had a very positive conversation with the minister. I've negotiated for the minister to amend the bill to include a statutory review clause. Within three years, the minister will be required to commission a review of the paid prac system. My amendment will require the government to consider expanding prac payments to other areas of key skills shortages, especially to allied health. While I won't stop pushing for better paid prac placements in the meantime, this review is now set in the calendar. Put simply, we need this review clause. This is a completely new type of government payment. Putting this review clause into the legislation will ensure any future government is accountable to ensure that payments are as effective as possible both for the students they assist and for the communities who desperately need these workers. I thank the minister for the way he's engaged with me on this topic.

Jason Clare (Blaxland, Australian Labor Party, Minister for Education) Share this | Link to this | Hansard source

I thank the member for Indi for bringing this amendment before the chamber. The member for Indi is somebody who I know is admired and respected by all members on all sides of this chamber. She cited the conversations that we have had about this amendment, and I'm glad to be able to inform the House that, indeed, we will support this amendment. As the member and I have spoken about, we've got great hopes that the Commonwealth prac payment will make a difference in the lives of many students.

This legislation, which establishes Commonwealth prac payments for the first time, applies it to teaching students, nursing students, midwifery students and social work students in the electorate of Indi—and, for that matter, right across the country. The reason it applies to those four in the first instance is that that was the recommendation of Professor Mary O'Kane and the accord team in their final report. In her amendment, the member proposes a review of this in three years time to consider both the effectiveness of these payments and whether they might be expanded to other students undertaking other courses in the future. I think that that is indeed a sensible approach. For that reason, the government will support this amendment.

Question agreed to.

Monique Ryan (Kooyong, Independent) Share this | Link to this | Hansard source

by leave—I move amendments (1) to (6), as circulated in my name, together:

(1) Clause 2, page 2 (after table item 6), insert:

(2) Schedule 1, page 4 (after line 6), after item 1, insert:

1A Paragraph 140-5(1)(b)

Omit "1 June", substitute "1 December".

1B Subsection 140-5(1) (method statement)

Omit "1 June" (wherever occurring), substitute "1 December".

1C Subsection 140-10(1)

Omit "for 1 June in a financial year", substitute "for 1 December in a financial year".

(3) Schedule 1, page 6 (before line 1), before item 6, insert:

5A Section 140-20

Omit "before 1 June", substitute "before 1 December".

(4) Schedule 1, page 6 (after line 3), after item 6, insert:

6A Section 140-20

Omit "that 1 June", substitute "that 1 December".

(5) Schedule 1, page 7 (after line 26), after item 17, insert:

17A Application of amendments

The amendments made by this Part apply on and from 1 December 2025.

(6) Page 28 (after line 10), after Schedule 1, insert:

Schedule 1A — Maximum student contribution amounts for places

Part 1 — Main amendments

Higher Education Support Act 2003

1 Section 93-10

Omit "The maximum student contribution amount for a place", substitute "(1) Subject to subsection (2), the maximum student contribution amount for a place".

2 At the end of section 93-10

Add:

(2) The table in subsection (1) has effect in relation to a place in a unit of study included in the Society and Culture *funding cluster as if the amount specified for the cluster was instead the amount specified immediately before the amendments made by Schedule 2 to the Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Act 2020 commenced.

Part 2 — Application provisions

3 Application provision

The amendments made by Part 1 of this Schedule apply in relation to a unit of study that has a *census date that is on or after the commencement of that Part (whether the unit of study is part of a course of study commenced before, on or after that day).

The Morrison government's Job-ready Graduates scheme more than doubled the cost of degrees such as arts, commerce, accounting and business overnight. Arts and law degrees now cost $51,000, double degrees $85,000—more for postgraduate courses. The cost of these degrees increased purely because of the Morrison government's wish to dissuade students from undertaking courses which, in its infinite lack of wisdom, it felt to be of limited value. This is while other courses—nursing, foreign languages et cetera—cost less than $5,000 a year. We've seen the gap between the cheapest and the most expensive university courses increase to more than $10,000 every year. The indexation of these fees rubs further salt into the wounds of impoverished students.

The reality is that in this post-truth world we need more, not fewer, graduates with high levels of literacy. We need graduates with the capacity for nuanced thought and debate and the ability to communicate complex ideas. We need graduates from varied ethnic and socioeconomic backgrounds such that the thought leaders of tomorrow reflect the diversity of Australian society. The architect of HECS, Professor Bruce Chapman, has called the Job-ready Graduates scheme the biggest mistake that he has seen in the education sector. Virtually all economists agree this is a flawed and ineffective policy and should be dismantled immediately. The government has previously spoken to this and acknowledged the issues with the system. It has acknowledged that the Job-ready Graduates scheme should be dismantled but has kicked that can down the road for the moment.

One of the amendments that I'm moving would dismantle the Job-ready Graduates scheme to the extent that the cost of arts degrees would return to where it was prior to the scheme's inception. I ask the minister to consider this in all certainty because this is a really problematic issue for many Australian students, as he knows.

HECS loans are interest free, but they are indexed annually on 1 June. We use a formula based on the CPI for the previous year to ensure, theoretically, that debts retain their real value over time. As the House knows, though, and as this bill is addressing, recent high inflation has resulted in significant levels of indexation over the last couple of years. In the last five years the total amount owed by graduates has increased from $66.6 billion to more than $81 billion.

Insult is again added to injury by the fact that the tax office collects HECS payments throughout the year but doesn't adjust the balance owing until a tax return is filed. That means it doesn't adjust the balance to reflect the payments made by graduates until after indexation is applied. Students end up paying more than they expect, and it's not fair. They have seen their debts increase, despite their best efforts to pay them off. My understanding is that, through this means, the government is accruing as much as $1 billion a year in additional income. This is at the expense of graduates. It's not fair or reasonable, and my amendments include the suggestion that the government change the timing of indexation, applying it after payments have been accrued to graduates' balances, to redress this inequity.

Kylea Tink (North Sydney, Independent) Share this | Link to this | Hansard source

I rise to support the amendments moved by the member for Kooyong. As many in this House would know, and as the minister is very aware, addressing the timing of HECS debt indexation is something my community of North Sydney has long been advocating for.

I want to start by commending the minister for his engagement in this area. It's incredibly refreshing, and I think Australians should be very aware that this is a minister who is very committed to listening to students and families and trying to make the changes needed to make the system fairer. Having said that, it feels like we've gotten part-way there but we haven't yet fixed the entire problem. There is no doubt that the timing of the application of the HECS indexation is a significant issue at the moment, and it's contrary to many other basic financial practices. People are not charged interest on their home loan only once a year without being given the benefit of what they've paid down over time, yet we have a debt system at the moment, that predominantly affects younger Australians, which sees them work to pay off a debt only to be charged interest on an amount that they owed at the start of a financial year, versus where they are in real terms. I've heard on many occasions that this is a technical issue. The ATO says it's just not possible, because of a technical framework, but I think we should be setting ourselves as a parliament beyond that and coming up with a solution to work around this.

I also wanted to take a moment to reflect on the fact that, at the end of the day, we have to move beyond the current crisis that is facing young people. We have to find a way to help them feel like they have a chance to pay down their debts. While, in my second reading speech, I had advocated for a 1 November date, I think 1 December is reasonable. As an added bonus, what I would also suggest to this place and to the ATO is that this bill will, ironically, act as an incentive for young Australians to get their tax returns done, so we'll have a much clearer position of where we stand.

In closing, one thing that really concerns me here is that, whether we like it or not, our system of government is currently making more money off tertiary students than it makes off taxing tobacco or natural resources. It's time we addressed this.

Zoe Daniel (Goldstein, Independent) Share this | Link to this | Hansard source

I also rise in support of this amendment from the member for Kooyong, and I thank the minister for the engagement on this bill. It is a happy day in this place to be able to make a difference to our young people. I think we are doing that today with this legislation and also with the Universities Accord (National Student Ombudsman) Bill 2024, which is being debated. These are critical changes for young people, who are under immense pressure. They're facing so much uncertainty and instability in the way that they view their future.

The change in the way HECS is calculated from CPI to wage price index, whichever is lower, is a suggestion that I and the others here on the crossbench made to the minister some time ago. The minister is, as the member for North Sydney indicated, very good at listening. So it's appreciated to have those conversations and to say: 'This is happening internationally. This is an alternative way that we could to it.' That makes a material difference to young people who want to study but who may be disincentivised from study because of the cost of education. We're a wealthy country, but we're also a country where, as the Universities Accord has identified, we need our young people to go through further education to skill up for the kind of economy that we need to have going into the future. We don't want to have any disincentives to those young people.

I have two teenagers. My son will be entering the university system next year, as will most of his friends. We don't want them to have to make a decision and, for all of those people who live in electorates that are unlike mine, to have to say, 'I can't do it, because it's too expensive.' We want people to thrive, to hit their straps and to take advantage of the system that we have. So these are good changes.

There is this outstanding issue—and I agree with both the member for Kooyong and the member for North Sydney—that this is still a partly-done job. I appreciate that we can't necessarily fix everything all at once all the time, but there is this issue where, when indexation that is patently unfair occurs, people shouldn't pay a debt that they appear to have when they've actually paid down that debt. I think it's pretty self-evident that it should be calculated based on what they owe, rather than what they potentially owed 12 months earlier.

My other point is that the cost of housing is a fundamental issue for our young people. I spoke at a primary school a couple of weeks ago, and we assessed the issues that the 11-year-old kids in the class thought were paramount to them. One of the top issues was housing. The fact that it's filtering through to kids at that age is really concerning.

That relates to this in the context that banks take into account HECS debt when deciding on mortgages. I think that's a conversation that we need to be having with the banks, be it through legislation or through simple policy negotiations. We need to say to the banks that HECS debt should not be applied in the same way that other kinds of debts are because, again, it disincentivises kids from studying and, if they have chosen to take that leap into studying, they are further disadvantaged when it comes to getting into the housing market.

I thank the minister for his engagement and for the team's work on this.

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

I want to echo the words from my colleagues on the crossbench, particularly in relation to this amendment from the member for Kooyong around the timing of indexation of the debt.

I have to admit I simply don't buy it. I really have to be very honest with my constituents in Warringah and with the people of Australia. I don't buy that it is not possible for the Australian Taxation Office to be able to adjust student debts in real time as payments are made so that when the time for indexation occurs it is done on the debt in real time. I just don't buy it. It doesn't happen when you're paying off a mortgage when it comes to a house. Banks can't do it. You can't apply an interest rate to a loan balance from 12 months ago. You have to take into account repayments that have been made. It's the same when it comes to credit card debts. It's the same thing that happens with any other loan. I look at the child support system, where the government is able to go back in time and cause a single parent, for example, who's been found to have been overpaid on child support or family benefit payment to incur a liability to the state. So I just don't accept the explanation for the timing of indexation from the ATO that it is not practically possible to adjust this to make it a reflection of every other practice, whereby, if a person is repaying a debt periodically, when there is an indexation or a change of interest, that balance is adjusted in real time as repayments are made. It is just unacceptable that that is not changed.

I would say that the reason why there is objection to this from the government or from within the department is the money that's being made from this, because with the delay comes greater revenue for the government through that greater indexation on those balances. I think it is unconscionable that, ultimately, people do not have the benefit of the income that they are earning—that they are making periodic repayments and that that is not being applied in real time to the balance of their HECS debts. So I put it out there that I simply do not accept the explanations that have been given.

Young people and others incurring a HECS debt are absolutely contributing to the future of Australia. We know that, through every policy area, we have a huge skills shortage. We know, for example, that AUKUS—a massive investment of this government; we're hearing about it all the time—has a requirement for some 4,000 engineers. They will have to go through the university system. They will need to be qualified. They will incur HECS debts. We have all these areas that so fundamentally depend on Australians pursuing their education for the benefit of Australians. We know that, and yet we are making them incur disadvantage in an incredibly unfair system. I think it's an unconscionable system.

So I strongly echo the words of my crossbench colleagues. I commend the minister. I know he has engaged on the issues, and I welcome the fact that we are finally changing at least the rate of indexation, to take the lower of the CPI and the wage index. But it took over 12 months for that to happen. Meanwhile, there is great stress and impact on young people, on students and often on women who are retraining and going back to university to pursue career opportunities. I think it's a responsibility of the government to fix this without delay and to provide a rational explanation as to why this indexation timing isn't fixed immediately.

Jason Clare (Blaxland, Australian Labor Party, Minister for Education) Share this | Link to this | Hansard source

I thank the member for Kooyong as well as the members for North Sydney, Goldstein and Warringah for their contributions, not just to this debate but to our ongoing conversation about reform in higher education—but not just in higher education. This bill makes what I believe are some very significant reforms to higher education, and I believe that the members of the crossbench who have participated in this debate and others deserve significant credit for these reforms and the bill that we passed earlier this afternoon, establishing a national student ombudsman. That comes, in part, because of the advocacy of members of the crossbench as well as other members in this House—most particularly, of course, victims-survivors and the organisations that represent individuals who have suffered the most appalling things in our universities. We as members of parliament don't always agree, but I always value your contributions and your considered advice.

On this piece of legislation, let me start by saying that I consider this to be the start of reform, not the end—that the Universities Accord report is a blueprint to reform our higher education system for the next decade and beyond. In the budget in May we set out what I described as the first stage of reform. That includes responding to and implementing 29 of the 47 recommendations in full or in part. You see some of those in this bill. But, as I said in answer to a question from the member for Kooyong in question time a couple of weeks ago, in respect of the Job-ready Graduates program and how we address and respond to that, as part of the first stage of our response to the Universities Accord we've committed to establish a body that we will call the Australian Tertiary Education Commission. We're working through the details of that body with universities and other stakeholders right now. I hope to be in a position later this year to set out the full scope of what that body will do. But the purpose and intent of that body is to help steer long-term reform.

The truth is that if we're going to properly implement the Universities Accord it's going to take more than one minister, it's going to take more than one government and it's going to take a steward to help drive reform over the long term. A tertiary education commission like the one I've described will have a role in making that a reality. Part of its scope will be in the setting of course fees. I hope I've made that clear—that in looking at the Job-ready Graduates program, at what it's done, at what it's failed to do and at what should be changed, that will be one of its core responsibilities.

The other part of these amendments deals with indexation. I recognise all the comments that different crossbenchers have made about the things we are doing in this bill and the things we aren't. But we should take a moment to recognise how significant the change that we are making today is. For three million Australians, once this bill has passed this House and then the Senate and has been assented to, the ATO will be able to wipe about $3 billion of student debt collectively across the country. So, for everybody out there who has a student debt, that debt will drop. On average, student debt at the moment is around $26,000 when you finish a degree. That will drop by about $1,200. But some people will accumulate a significantly higher debt than that. As I mentioned in question time today, if someone has a student debt of $45,000, when this legislation passes, their debt will drop by about $2,000. If it's higher still—if you've got a student debt of $60,000—it will drop by $3,000.

So, let's stop for a moment to recognise that this is an important change that we collectively are making here in this legislation. I've had a number of really constructive conversations with the member for Kooyong and with all members of the crossbench about how we can make our HECS system fairer, how we can make student debt fairer. I really value the kind comments you made to me about this. I kind of think that's a big part of our job. My mum always said that we're born with two ears and one mouth and we should spend twice the amount of time listening as we do talking—which reminds me that I should shut up! But as I do close out my contribution here can I make the point that, even though we won't be able to support these amendments at this time, my door is always open to all members of parliament, from all sides of this House—all political parties and all Independent members—with the endeavour to make sure that we can build a better and fairer education system.

Monique Ryan (Kooyong, Independent) Share this | Link to this | Hansard source

I'd like to acknowledge the generous response by the education minister and express my significant and real gratitude to him for his willingness to negotiate, share and move with the crossbench over the last two years as we've talked about the issues with the tertiary education sector. I would have to say that he's been a good person to work with and that his mother's done well!

But, further to that, could I just make the point that, for those students who have started an arts degree in the last couple of years under the auspices of the Job-Ready Graduates Package, the cost of their degree has effectively doubled. Those young people, who are dealing with extraordinary costs which are not in keeping with the cost of running the course and not in keeping with their earning capacity or expectations subsequent to completing the course, are at this point left without any real hope that this egregious unfairness will be unrolled. The minister has previously been clear in his communications regarding the Job-ready Graduates scheme, and the Universities Accord was similarly clear in its expression of the fact that this is wrong. Those young people right now have no reasonable hope of this excessive debt being unravelled.

I acknowledge the fact that the bill before the House is going to make a huge difference to many Australians. As the minister said, it will unravel $3 billion of debt for three million Australians. But what consolation can we offer to those students who've been given this extraordinary, egregious and unreasonable debt as a result of Job-ready Graduates?

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member for Kooyong. The question is that the amendments be agreed to. As a division is required, in accordance with standing order 133 the division is deferred until the first opportunity on the next sitting day. As it is necessary to resolve this question to enable further questions to be considered in relation to this bill, the debate on this item is therefore adjourned until that time.