The government has introduced its bill to reduce student debt. Photo: Australian National University.
The Federal Government has fired the starter’s gun on the business schedule for the new parliament by introducing its legislation to cut student debt.
Labor’s bill seeks to cut 20 per cent off all higher education student debts, with the aim to wipe away more than $16 billion for about three million Australians.
It’s likely to pass with little trouble, as both the Opposition and the Greens have signalled enough initial support for it to get up when it arrives in the Senate.
The government won’t need any help to have it first pass the House of Representatives.
Anthony Albanese said the aim of the bill was to deliver cost of living relief.
“We promised cutting student debt would be the first thing we did back in parliament and that’s exactly what we’re doing,” the Prime Minister said.
“Getting an education shouldn’t mean a lifetime of debt.”
If the bill passes unamended, it will mean someone with the average debt of $27,600 will see about $5520 wiped from their outstanding Higher Education Loan Program (HELP) loans.
Backdated to 1 June, it will reduce student debt on all HELP, Vocational Education and Training (VET) Student Loans, Australian Apprenticeship Support Loans, Student Startup Loans, and other student loans.
In addition to cutting student debt by 20 per cent, the legislation raises the minimum amount before people have to start making repayments from $54,435 to $67,000 and reduces minimum repayments.
For someone earning $70,000 it will reduce the minimum repayments they have to make by $1300 a year.
The government said it built on reforms to fix the indexation formula, which it said had already cut more than $3 billion in student debt.
But ACT independent Senator David Pocock said he wanted to see the date of indexation changed and for Labor to “embrace hard reform” over student debt.
“It is outrageous that people with HECS debts are being charged indexation, effectively interest, on money they’ve already repaid to the ATO,” Senator Pocock said.
After introducing the bill Wednesday morning (23 July), Education Minister Jason Clare described it as a “big deal” for three million students.
“In particular, a lot of young Australians,” he said.
“Just out of uni, just getting started, this will take a weight off their back …
“That’s real cost of living, health, more money in your pocket, not the government’s, when you really need it …
“This is about putting money back into your pocket and putting intergenerational equity back into the system.”
Skills and Training Minister Andrew Giles made a point of noting that the legislation wasn’t all about university students.
“From speaking with students at TAFEs across the country, I know that cost can often be a barrier to Australians pursuing an apprenticeship or qualification,” he said.
“This bill will deliver cost of living relief to almost 280,000 students in the VET sector – cutting half a billion dollars of student debt from this group alone.
“Our government is focused on reducing the barriers to further study and training, so that every Australian can get the skills they need for secure, well-paid jobs.”
Opposition Leader Sussan Ley has committed to working constructively on the legislation, but has withheld endorsing it at this stage.
“Let’s see what the bill says, I will have those discussions,” she said shortly before the legislation was introduced to the Lower House.
“It’s an area where we can be constructive. But I’m not going to forecast what we’ll do on a piece of legislation that hasn’t actually landed in the chamber.”
Shadow education minister Jonno Duniam subsequently said the Opposition would likely support it.
The Coalition under Peter Dutton’s leadership campaigned against Labor’s proposal to reduce student debt.
