By Olivia Ireland
Opposition Leader Peter Dutton has mocked Prime Minister Anthony Albanese’s pledge to wipe 20 per cent off the student debt of 3 million Australians as an attempt to “make people like him again” as the $16 billion policy dominated the Coalition’s attack on Labor’s economic record.
An election battle over higher education reform has been opened after federal Labor promised to shave $5500 off an average student loan debt of about $27,000 if re-elected, in an attempt to appeal to young voters struggling with the cost of living and trying to enter the housing market.
Labor says it would also cut 20 per cent from TAFE and apprenticeship loans and raise the minimum income to start repayments by more than $10,000. From next financial year, a graduate would not have to start repaying their HELP debt until they earned $67,000 a year, up from $54,435.
Students would receive HECS loan relief from June 2025 under a re-elected Labor government.Credit: Louise Kennerley
Dutton compared Albanese to former Queensland premier Steven Miles, who went to an election last month promising free school lunches but still lost.
“When Steven Miles was deeply unpopular, he went on a spending spree to try and help him reset and win his popularity back,” Dutton told the House on Monday, adding, “the prime minister played this card trick on the weekend with the $16 billion university degree debt policy.”
Opposition frontbencher Paul Fletcher and Nationals leader David Littleproud also slammed the proposal as a desperate giveaway, arguing it was “a profoundly unfair policy” that would cost all 27 million Australians but benefit only 3 million.
“People who have the benefit of a tertiary education will have much higher lifetime earnings than the average across the community and therefore it’s appropriate that they bear some of the cost of their education,” Fletcher told Radio National on Monday.
The Albanese government’s suite of graduate loan reforms comes after a flagship review of tertiary education in February recommended changes to Coalition-era fee hikes for certain degrees such as arts and humanities to lower costs for students.
Economist Bruce Chapman, widely considered the architect of HECS, argued this needed to be the next reform priority from the government, adding that Labor’s debt discount was a one-off and not designed to be permanent.
“The most important thing is if the threshold goes up to $67,000, there will be people out there with HECS debts over their lifetime who won’t have to pay when their income’s pretty low,” he said.
“What the government needs to look at down the track is the overall relatives of the prices … [but] this is a very productive package.”
Student loans do not hit the federal budget bottom line directly as the government makes a return on the debts. But the level of debt is accounted for in every budget and affects the government’s total net debt levels.
Albanese said the policy was not being hidden despite being calculated outside the budget.
“This legislation is the first legislation we’ll introduce if we’re re-elected next year and all of the budget details of course will be included,” he told Radio National. “It will be transparent, and we’ve put out the estimated costs of these measures in the announcement that we made yesterday.”
Albanese used a Sunday rally in Adelaide to announce the reforms, first revealed by this masthead on Friday.
“This will help everyone with a student debt right now, whilst we work hard to deliver a better deal for every student in the years ahead,” he said.
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