Topics: Labor’s reckless promise to cut student HELP debt.
Stephen Cenatiempo: Announcing that it is going to make changes to the way HECS or help debts are played. Now they used to call them HECS debt. Now they’re called a HELP debt, but basically the loan process for which you can pay for tertiary education expenses. But what does all this mean? Senator Sarah Henderson is the shadow education minister and joins us now. Senator, good morning.
Senator Henderson: Stephen, a very good morning to you.
Stephen Cenatiempo: What is the government actually doing? What are they saying they’re going to do?
Senator Henderson: Well, they are saying that they are going to apply a 20 per cent basic cut or discount to existing student debt. But of course, what that basically means, Stephen, is that Labor has given up the fight against inflation, handing out $16 billion not explaining where it’s going to come from. And of course, this doesn’t help anyone planning to go to university. It doesn’t help anyone who’s worked very hard to pay off their HECS debt, and it doesn’t help all Australians, because 24 million Australians don’t have a student debt, they’re left high and dry, but all Australians are paying the price at $16 billion – that’s $1,600 a household – and this is just another indication that this hapless government cannot manage our economy.
Stephen Cenatiempo: So this is 20 per cent off the top. So, if I’ve got $100,000 HECs debt – or HELP debt, as they call it now – I’ll only have to pay back $80,000 but I also pay it back later, because the thresholds have changed. Is that right?
Senator Henderson: Look, in in a nut shell, that is right. But what it does mean there’s 55,000 people who have a HELP debt, between $100- and $200,000 – so it means that they will get an average pay cheque back of $25,000 while many young Australians are literally struggling to pay the rent or put food on the table because of Labor’s cost-of-living crisis. Now that’s just not fair, and this is a policy which reeks of unfairness, reeks of elitism, and of course, it doesn’t acknowledge the fact that the Commonwealth already pays 60 per cent of a university student’s education through the Commonwealth, some scheme in place for most students, so the taxpayer is already contributing very substantially. Now this is a red-hot issue, but it’s a red-hot issue because Labor has driven up the cost of student debt because of high inflation. So, indexation has gone up 16 per cent, Stephen, since Labor was elected, which is just horrific. Now, if you contrast that to when we were in government, an annual increase in indexation of just 1.7 per cent on average. So, student debt is skyrocketing because of Labor’s terrible mismanagement of the economy, because of its high inflation, and that’s why it’s just absolutely critical to get rid of this government.
Stephen Cenatiempo: There’s two concerns I have, firstly, that this is basically going to be a subsidy from people who don’t go to university for people who do – which already exists anyway – but this is just a further exacerbation of that. But this, this concept of this off-budget expenditure that I don’t understand, this concept of off-budget, where we were spending all this money, but we’re not going to tell you about it, so it doesn’t make the bottom line look any worse.
Senator Henderson: Well, of course, it does add very significantly to net debt, but I think Chris Richardson, the leading economist, says it best when he says:
`Handing $16 billion to graduates is a reverse Robin Hood. It’s a tax cut targeted to the big end of town with money going from the less well off to the better off. It’s a fairness fail.’ And he goes on to say: `Worse still, that $16 billion does nothing for the nation’s future. It doesn’t deliver incentives that would make anyone more likely to study or encourage anyone into work.’
So this has been broadly condemned by the economists, by the independent commentators. It’s very, very bad policy, and it’s just another example of Labor’s flawed thinking that if you just continue to throw bucket loads of money at various Australians, you can get over the line at the next election. Well, Australians are not going to cop that. They are smarter than that, and they know that the best way to bring down inflation is to tackle the problem at the source. So that means getting back to basics, reining in wasteful government spending and boosting productivity to relieve price pressures.
Stephen Cenatiempo: But Sarah doesn’t this point to a broader problem with our education system, and that if you’ve got a HELP debt that you’re struggling to pay back, your degree probably isn’t serving you in the first place. And I’ve said since John Dawkins was education minister back in the 80s, that we’ve devalued a university education. We’ve told anybody that doesn’t go to university, they’re a failure. We’ve got a trade shortage because of that, and now we’ve got a bunch of people with degrees out there that can’t pay them back.
Senator Henderson: Stephen, university is not the panacea. I mean, Labor has put this proposal up that we need to double the number of people going to university by 2050 but there’s no modelling to support that, and there are people, employers everywhere, crying out for tradies, for workers that don’t necessarily require university education. And as I’ve always argued, Stephen, being a really good boilermaker or a welder is just as important as being an engineer. We need both in our economy. So of course, you know, university offers a lot to many young Australians, but under this government, we have seen student debt skyrocket, and of course, the longer you take to pay back your debt. So now Labor has introduced a new scheme where you can pay if you got – if you are earning $70,000 you only need to pay back $450 a year. Now, if you have got an average loan, Stephen of something like $27,000, that will take you 58 years to pay back. So that is confining young Australians to a lifetime of debt, which is, frankly, really, really reckless.
Stephen Cenatiempo: It seems like an extraordinary policy, Sarah, I appreciate your time this morning. Thanks for joining us.
Senator Henderson: Glad to talk to you thanks Stephen.