Cash-strapped Australians paying off university debts could save $1000 or more by mid-year under a fee overhaul that Education Minister Jason Clare has declared a cost-of-living fix.
Labor on Sunday released the landmark Universities Accord report, suggesting sweeping reforms to double the number of university places over the next 25 years and to reach a point where four out of five Australians have a degree.
The Albanese government’s Education Minister Jason Clare.Credit: Alex Ellinghausen
Clare has not committed to adopting any specific proposal as he spends time considering the findings of the review.
However, he gave in-principle support for changes to the HECS-HELP system, which the report said was complex, expensive and potentially discouraging enrolments.
The eminent education figures behind the report urged Clare to consider a series of changes to the debts incurred in tertiary studies after student advocates and crossbench MPs argued university fees should be made cheaper for young people struggling to buy homes and paying high rates of income tax.
Clare said he hoped to make some policy moves in the May budget, meaning benefits may flow by tax time.
“This is something that could provide an immediate cost-of-living benefit for people after they finish uni and they’re in the workforce,” Clare said on ABC’s Insiders, in comments likely to fuel a battle with the Greens for the support of young voters.
The minister affirmed Labor’s long-standing support for the HECS system that “blew the doors” of universities open for a whole generation of Australians.
“This report says we’ve got to make it fairer and simpler,” he said.
The report recommends tying yearly indexation of HECS payments to whichever cost is lower – annual wages growth or inflation – with the aim of protecting students from the one-off spikes in inflation that have added thousands of dollars to graduates’ debts.
Also suggested is a change to tax office systems to ensure that people’s debts are not indexed on the original fee but only the remaining balance, as suggested by teal MP Kylea Tink last year.
HECS architect Bruce Chapman, Clare revealed, had suggested to the report’s authors a policy that would reduce payments for students on low incomes. Clare said this idea, should the government choose to implement it, would result in the average graduate earning $75,000 paying about $1000 per year less in HECS fees.
Australian National University economics professor Bruce Chapman.
The changes may also include paying some students to complete work experience.
Opposition home affairs spokesman James Paterson argued the report was effectively a long and expensive wishlist.
“I think it’s very telling that Jason Clare, on releasing this report today, hasn’t been able to commit to a single idea … and has said it will take the federal government months to respond,” he said on Sky News’ Sunday Agenda.
“But that is a pattern of behaviour with this government when it comes to defence, home affairs and now education. They commission dozens and dozens of reports, they sit on them for months, they finally release them, and then they say they’ll respond in a few months’ time.”
But Clare, asked if Labor had the will to spend the sums required to improve education standards, said: “I’m determined to drive reform in higher education, but also in school education and early education.”
“This is all connected. We’re not going to be successful in what this report tells us we need to do in hitting that 80 per cent target if we just rely on reforms that start at the university gate.”
In relation to a contentious proposal that top unis have described as a “wealth tax”, Clare said he had an open mind and noted some unis hated it and some liked it.
The “tax” refers to a recommendation for the creation of a $10 billion higher-education future fund with matching co-contributions from universities and government. It does not describe the financial contribution as a wealth tax or identify how much universities should pay under the levy.
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2024-02-25 03:51:51Z
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