HECS: A Cash Cow for Government

28 March, 2024

I did enjoy hearing from the previous speaker, the member for Solomon, about Darwin and surrounds and the whole of the Northern Territory. It's greatly loved by all Australians. I want to pass it on to you that I love the place and my wife loves the place. We've only been there a couple of times, but it's a great place to visit. And you've reminded us that it's 50 years since Cyclone Tracy devastated Darwin. I can recommend a trip to Darwin to anybody. In particular, go down to the wharf and have a look at the presentations they've got down there about the bombing of Darwin.

One of the saddest things that happened to me as a federal member was when I went to Monash University—Monash was playing a part in Gippsland at the time and had a role down there. I was meeting someone in the Clayton campus and I couldn't find a car park. I was driving round and round, trying to find a car park. I finally got a car park and went to the area where I was meeting someone. I said to the person that greeted me, 'It's very hard to get a car park,' and he said, 'Yes, but don't worry; all the country kids get over it this term and they'll give up. They won't come back next term. There'll be car parks everywhere.' He was talking about students from the regions—that it's all just too hard for them.

Education is a really important issue in Australia. I'm going to talk about HECS in a minute, but I want to just put the framework there for you, Deputy Speaker Wilkie. We have education because it's the lifter of all young people. A good education means a good future. What was said in the parliament by the minister today—he talked about somebody with a tertiary education earning $60,000 a year more than someone who has just come out of a secondary college or whatever. Now, I'm not a tertiary educated person. I came up in a different way, through business. But I know how important education is. Education is funded by the states and federally, and it's important to train our population for greater productivity, greater opportunity, greater lifestyle, greater science, greater maths, greater chemistry, greater engineering, to make a greater society.

That's why we invest in our students—because they can grow Australia. They can make Australia great—not to be confused with an American politician! Why do we educate them? We educate them to make Australia a great place, and we need people who are highly educated to be able to have the future that we desire for them. So we invest in education.

However, once HECS fees came in—and I've got to tell you upfront that Bron and I, my wife and I, paid for our children's university fees upfront so they didn't have a HECS debt. Most students don't have parents who are able to do that at the time.

Currently in Australia our young people are facing the toughest times that I can remember in my years in this parliament, especially our tertiary education students. It doesn't matter whether you're talking about high food costs or skyrocketing rents, if you're fortunate enough to get a rental; it's exceedingly difficult for students to survive, let alone what country kids have to put up with, with the dislocation from their country area to go to university. If studying a full-time course wasn't enough, most university students are also juggling work, and many have career responsibilities as well. But on top of this, with regard to their HECS fees, they're being lumped with yearly indexation that dramatically increases their student loans, not to mention their stress levels.

From a long time ago up until recently, it was about a four per cent annual increase in the HECS debt. In three years, there's been a 12 per cent increase. If you haven't paid any back, that's 12 per cent on top of what you had before. As you know, compounding interest when you're investing is good, because it compounds and compounds and compounds, and over ten years whatever you've invested comes out nearly double or triple what you put in. That's just compound interest and nothing else. Compound indexation over a period of time, especially for women—and I'll come to that in a minute—has left people with an ever-increasing bill. But that four per cent over the last couple of years went to 7.1 per cent. Over three years, that's a 23 per cent increase in your HECS debt. That's what has happened in Australia. That's what has drawn my attention to it.

Let me tell you about Tom. Tom's HECS debt two years ago was $13,609. Then it went to $28,553. Now it has gone to $32,334. That's a remarkable increase. Someone who had a $13,000 HECS debt suddenly has a $32,000 HECS debt. I know that you're interested in gambling, Deputy Speaker. If you were losing that much when you were gambling, you'd be pretty upset! Here we are as a government, actually thinking this is a good idea. I know the background from when John Dawkins was the education minister under Paul Keating. They said, 'We'll give a whole lot of young people who wouldn't otherwise have the opportunity the ability to borrow the money from us and then pay us back when they get a job.' It sounds simple, until you realise that today the total HECS debt is $78 billion. Our former students owe the federal government $78 billion. Can you imagine! Is that a cash cow for the federal government, or an asset of the federal government that they claim is an asset on the books? The latter would be right, because, of $78 billion, 10 per cent is an $8 billion a year increase. Five per cent is a $4 billion a year increase added to the debt of young students when they come into the workforce.

None of these payments made throughout the year take into account the time the student's loan it is indexed. Even the rate of indexation, as I said, has dramatically changed from four to seven per cent. That's a massive increase. According to ATO statistics, it's women who hold the majority of student debt in Australia. I'll repeat that: it's women who hold the majority of student debt in Australia. These HECS and HELP debts are further entrenching women's economic disadvantage in this nation. Today, I read that total HECS debt, as I said before, is $78 billion. Since the start of HECS in 1989, $111 billion has been lent through student loans, with a whopping $19 billion added to this debt in the form of indexation. Only $51.5 billion has been repaid since 1989. Our teachers and nurses carry the biggest repayment burden of any group. These are already overwhelmed frontline workers who take on our most essential and critical roles.

In fact, I know multiple women who were mandated to get the COVID injection and lost their jobs. Yes; many were terminated for, as will be put on their reports, so-called gross or serious misconduct, because they refused to submit to an experimental COVID injection. These women now find themselves unable to work in their professions, but they are still lumped with repaying their HECS debts. They're still there. Even if your job is taken away from you by government mandates, your HECS debt is still there.

Now, another report that I read, which will be interesting to you, Deputy Speaker Claydon, is about how HECS and HELP debts have helped entrench women's economic disadvantage. This is important. These are the key points. Women say they are frustrated by the HELP debt system and feel disadvantaged. Women hold the majority of all student debt in Australia. Researchers say the student debt system has exacerbated structural financial inequities between men and women. That's a fact. So why do women have a heavier debt burden? More women undertake university education, but, on average, men can expect to earn higher incomes than women after graduation. That's crazy stuff. There's a maths equation here that simply doesn't add up. Why are we penalising people, especially our frontline workers, who are paying for the privilege of serving our nation?

But there's another double blow lurking for women. Because they're the ones that give birth and necessarily take the most time out of the workforce raising children and they're the ones who pick up the lion's share of other caring obligations, such as caring for elderly parents, they spend significantly longer repaying their debt and then are gravely affected by the reduced amount of superannuation in their nest egg. (Time expired)

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