Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Hansard source

Because the government has not expressed a view on this yet, I do want to explain the government's opposition to this amendment—and let the record show that this is an occasion not oft seen in this place, when Senator Carr and I find ourselves in significant agreement about the lack of logic behind the approach of the Australian Greens. As I acknowledged in my summing-up speech, I think the advent of the HECS system, which has morphed over time into the HELP program, is indeed one of the great accomplishments of public policy in this country. It is a demonstration of the fact that a good policy stands the test of time. The HECS loan system has stood through the Hawke and Keating governments, the Howard government, the Rudd and Gillard governments, and the Abbott and Turnbull governments, and I have no doubt that it will stand long into the future. Indeed, such an income-contingent loan system has been modelled and utilised by other countries, which have based themselves very much on the Australian experience. It is an important model because it recognises that benefits accrue to the individual as a result of accessing a higher education, just as benefits accrue to the public as a result of having a more educated populace and workforce.

So, it shares the costs, with a Commonwealth subsidy applied and with students making a contribution, but it ensures that that student contribution applies only when people are in a position to afford to repay it, by operating on an income-contingent level. As I emphasised in my summing-up speech, an important feature of this, though, in the generosity of this loan scheme, is that it is indexed only against the CPI. As a result, the longer that debts are outstanding the more it is that taxpayers are subsidising the loan that has been undertaken, because the cost to the Commonwealth of borrowing is greater than the CPI and therefore there is an increased and ongoing cost associated with a deferral of repayments. So the reality is that when a student completes their degree—or does not complete their degree but has accrued a debt and goes overseas and makes no repayments for the time they are overseas—they are increasing and expanding the subsidy that they benefit from as a result of the generosity of the Australian taxpayer to provide the sustainability of our higher-income-contingent loan system.

I marvel at the approach of the Greens, in some ways. In the different contributions I have heard from Senator Simms it seems that he does not want people to repay their debts except in almost exceptional circumstances. It seems, from various comments that have been made, that he does not want people to pay more tax; he does not want people to pay for university education. It is, of course, the classis magic money tree approach of the Greens. He has spoken a couple of times about the mythical Australian expat, the person who goes overseas and does not repay their HECS debt. Well, he need of course look only marginally in front of him and to his right, to Senator Whish-Wilson: I do not know whether he had a HECS debt or not at the time he lived as in investment banker in New York.