Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Hansard source

If this Liberal government has one mantra, it could be, 'When you can, kick a young person,' because time and time again this government's policies are entirely about trying to make it harder for young people to make their way in life. Whether it's failing to make the sensible changes Labor proposes to negative gearing, tax cuts for multinationals and those in the highest income brackets or increasing the cost of university degrees, the changes that this government makes significantly disadvantage young people. It's as if they think that, by continually disadvantaging young Australians, they can absolve themselves of their failure to provide any sort of economic leadership for the country. They blame young people and attack young people and they do this to divert attention from their cuts to education, their cuts to health and their billions of dollars worth of tax cuts to multinationals and big businesses. If this government's credibility as competent economic managers weren't dead already, the decision that tax breaks for big banks were more important than funding schools was seriously the final nail in the coffin.

The Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018 enacts a number of changes to Australia's income-contingent loan scheme, the Higher Education Loan Program, known as HELP, and makes technical changes to the Student Financial Supplement Scheme, the SFSS. It's an unfair piece of legislation that attacks students and undermines the fairness of our world-class student loan system. Australians already make the sixth-highest contribution to their university fees in the OECD.

Labor believes the current repayment rate is about right. We don't want to make students repay their debts when they're struggling to start a career, saving for a house or trying to start a family. In a time of significant economic transition, we should be investing in our people, not making it harder to get a university qualification. We should be doing all that we can to increase participation in higher education, not making it harder. The MYEFO package of $2.2 billion of cuts is the government's fourth attempt since coming to office to cut funding to universities and make students pay more. We believe that any changes to the HELP scheme need to be considered and evidence based, but these changes to the HELP repayment threshold are simply driven by budget cuts and antistudent ideology.

Labor believes we must have a fair and equitable loan scheme, but these changes to repayment thresholds simply do not pass the do-no-harm threshold. The changes to HELP were announced as part of the package of higher education measures in MYEFO on 18 December last year. This bill sets new repayment thresholds for HELP from 1 July 2018, starting with a new minimum repayment level of $45,000 with a one per cent repayment rate, with a further 17 thresholds and repayment rates up to a top threshold of $131,989, at which 10 per cent repayment would apply. The bill aligns with the indexation of HELP repayment thresholds to CPI instead of average weekly earnings and also introduces, from 1 January, 2019, a new combined loan limit on how much students can borrow under HELP to cover their tuition fees. This limit applies to all programs, including VET students loans, HECS-HELP and FEE-HELP and would be $104,440 for most students or $150,000 for students studying medicine, dentistry and veterinary science courses. This bill also makes a number of technical changes to the repayment threshold for the SFSS, including bringing repayment thresholds in line with the new HELP repayment thresholds and making changes to the order of repayment of student loan debts. The bill would also retain the current three-tier repayment thresholds for SFSS, with existing indexation for 2018-19.

We must remember that this isn't the first time the government has attempted to make this change. The government has previously tried to make changes to the HELP repayment thresholds in its Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System) Bill 2017. Its proposal in last year's bill was to lower the HELP repayment rate to $42,000 a year. Labor was successful in making the case that this rate was too low. The government was unable to get enough support in the Senate, so it withdrew the bill in November. Now it's trying again but with the added punitive measures.

The new proposal for a lifetime borrowing limit is a new policy proposal from the government. This would have significant implications for the operation of the higher education system. While a borrowing limit has been introduced in the VET student loans, there has yet to be a limit for all loan schemes in the higher education system. Traditionally Commonwealth supported places or HECS places did not have a borrowing limit for students. Students taking other courses which were not subsidised, like full-fee postgraduate coursework places, could take out a loan for the fees through the FEE-HELP scheme. Full fees were set by universities and higher education providers and have not been regulated, which has led to instances of students taking on significant amounts of debt. While there is some merit to sending a price signal through a lifetime borrowing limit, the proposal in this bill may have a range of unintended consequences.

On 15 November last year the Senate referred the provisions of the bill to the Senate Education and Employment Legislation Committee for inquiry and report by 16 March. Very few of the submissions indicated outright support for the bill, and Labor senators recommended the bill be opposed. To put it simply, this bill is bad policy and many submissions to the inquiry agreed with this view. The National Union of Students is not only opposed to the changes proposed in this bill but to the entire suite of measures the government has attempted to introduce during its time in government. The NUS submission to the inquiry states:

Since the 2014 budget, the Federal Government has attempted multiple times to impose radical changes on Australia's Higher Education sector. It has done so with no coherent strategy for Australian higher education, other than to reduce public funding for what is an incredibly vital sector.

  …   …   …

NUS notes that the Federal Government has consistently failed to win the support of students, the Australian public, or the Senate for these changes, yet has proceeded with massive cuts and an end to the demand-driven system through executive order.

The National Tertiary Education Union argues that this bill is flawed in four key ways, telling the committee:

The NTEU opposes the proposed changes to HELP repayment schedule, especially the lowering of the income threshold to $45,000. The reasons for our opposition include that:

Similarly, the ACTU, in its submission to the inquiry, was highly critical of the bill:

… we have seen this government persist with unprincipled, unfair and unsustainable policies that shift the cost burden for higher education onto the shoulders of students and their families. The ACTU believes that this bill places an unreasonable burden on students and will do nothing more than continue this government's agenda of reducing access to higher education for disadvantaged Australians.

It also argued:

At a time when home ownership, even for university graduates, is becoming an impossibility for many young people and when someone earning $45,000 a year will be spending, on average, nearly half their income in rent, increasing costs for young people to attend university and TAFE is unacceptable. It locks them out of education and ensures that those who do manage to enter the system have a harder time starting out.

So the government believes that the escalating level of HELP debt is caused by former students not repaying their debt. Yet evidence suggests that this isn't the true cause. In fact, its own policies may well be to blame.

Witnesses to the inquiry arguing against the government's view include the NTEU, who wrote in their submission:

While the NTEU understands the government's concerns about the ever escalating level of outstanding HELP debt, … we do not believe changing the repayment schedule addresses the fundamental cause of this problem.

The escalating level of HELP debt shown in Figure 2 is not a consequence of students failing to repay their debts. The rising level of HELP debt is being driven by:

So we can see that the reasons that the government argue that this bill is needed are in fact false.

But let's take a moment to consider who will be impacted most by the changes. The Regional Universities Network outlined how this change will most impact on lower income households, with their submission stating:

The decrease of the first threshold for the repayment of student loans from around $52,000 to $45,000 is a significant change, which will negatively impact on low income households.

And their submission said:

A cap on student loans is a disincentive for life-long learning.

Universities Australia was also critical about how the bill will impact on those who can least afford yet another hit to their budgets. Universities Australia said in its submission:

UA is concerned about any proposal that would increase the financial burden on graduates earning modest salaries. … A $45,000 threshold would require graduates earning significantly less than the median starting salary for Bachelor degree graduates in full-time employment ($60,000 in 2017) to start making repayments.

It said:

The proposed, inflexible cap makes little sense in an era of accelerating labour market change, requiring more people to retrain and reskill. The proposal is difficult to reconcile with a commitment to lifelong learning. Trends towards requiring Masters level qualifications for initial professional registration also raise questions about the implications of the proposed limit.

And it was argued by the ACTU that VET students in particular are most likely to be hit by the changes in this bill. They argued:

It is clear that the students who will suffer most from these changes are those from disadvantaged backgrounds. Students from low-socio economic households will be particularly punished. VET students, who are more likely to be from disadvantaged families, are likely to be the hardest hit. Students from low socio-economic households are unlikely to be able to rely on support from their parents either during university or, crucially, in the early years of their career.

I'm also deeply concerned that the government has not fully understood the impacts that the changes to HELP repayment thresholds will have on women. We know that, for this government, women are a second thought. This government has delivered policies so often that disproportionately impact on women. As National President of the National Union of Students Mr Mark Pace stated:

We know from the National Tertiary Education Union's submission to this Senate inquiry that 60 per cent of all Australians with outstanding HELP debt are women and that two-thirds of the Australians who will be dragged into the debt pool with the new proposed repayment thresholds will also be women—therefore, the bill should be rejected on that premise as well.

Equity Practitioners in Higher Education highlighted the current gender inequality of the HELP system, a situation which will worsen with the proposed changes in the bill. They stated in their submission:

The gender inequity of graduate salaries and the gender pay gap between men and women is reinforced by carer responsibilities, feminised industries and gender discrimination. Unsurprisingly, women as a group take longer to repay their student loans than men, largely due to gender pay gaps and time away from paid employment while fulfilling caring responsibilities. The interest on student loans continues to accrue, even though earnings may be well below the repayment threshold.

Equity Practitioners in Higher Education highlighted the impact that changes in this bill would have on equity groups including Aboriginal and Torres Strait Islanders and people living with disability. Their submission stated that the government needs to take into consideration:

So it's pretty clear that the government has only ever had one plan for higher education: cut university and TAFE funding and make students pay more. The Liberals can't help themselves. They've consistently tried to make students pay more to pay for their $80 billion tax cuts. We've seen it in the schools, with $17 billion cut. We've seen it with vocational education and training, with nearly $3 billion cut and more than 140,000 apprentices and traineeships lost. That's 140,000 apprentices and traineeships lost since the Liberals came to office. Again, we've seen it with unis, with $2.2 billion cut.

Labor deliver real reform to our higher education in this country. When we were last in government, we lifted investment in universities from $8 billion in 2007 to $14 billion in 2013. We opened the doors of universities to 190,000 more Australians, many of whom were the first in their family to go to university. The Liberals, through their latest round of cuts, are slamming those doors shut in people's faces. This bill is bad. It's bad for students from low-income households, it's bad for women, it's bad for Indigenous and culturally diverse students, and it's bad for students with disability. The government has failed to make the case as to why this bill is needed and has failed to adequately consider the effects that these changes will have on students and graduates who are struggling to own a home and get ahead in life. I encourage all senators to vote against this legislation.