Anthony Albanese’s shake-up of student debt is just another giveaway from a spooked Labor government

Anthony Albanese in Adelaide. Picture: NewsWire / Dean Martin

Forget the Spring Racing Carnival fashions, what’s really in fashion is politicians using other people’s money to buy votes.

We saw this on full display in the recent Queensland election campaign – free school lunches anyone? – but it’s a bug that the Albanese government has obviously caught.

How else can you explain the dumb idea to tinker with the student loan arrangements – we used to call them HECS, but they now go by the name of HECS-HELP.

It’s just a giveaway to anyone currently holding student debt: it won’t alter their behaviour because the debt has already been accumulated. It’s on top of the implemented change to the indexation factor that cost $3bn.

The proposal is grossly unfair, asking those who haven’t attended higher education to cross subsidise those who have.

Given that graduates earn more on average than those who don’t, how can it be equitable to wipe 20 per cent off the value of student debts, just so they feel better and can handle cost-of-living pressures?

It’s also a bummer for those who have just paid off their debt.

As for the idea promoted by Education Minister Jason Clare, that the move will be good for the taxpayer, he really needs to go back to school and do a bit of economics. Here’s how it works: the HECS-HELP loan book is the second-biggest financial asset of the commonwealth, behind the Future Fund. The value of these assets is deducted from the gross government debt to obtain the net debt figure. Reduce the value of the HECS-HELP loan book – the figure put on the government’s plan is $16bn – and net debt suddenly goes up by the equivalent amount.

As for Clare’s idea that the new arrangement will encourage even more young people to attend higher education, the reality is that we don’t need more graduates in sociology or cultural studies.

We need more tradies in the construction industry and people to work in the services sector. Clare is on the wrong track thinking we should increase the proportion of the workforce with higher-education qualifications.

One minor amendment that is being proposed – to make the payment of student debt a marginal rather than an average calculation – does make sense. It always should have been like this.

But we are talking small beer compared with the writedown of the value of the debt.

It really looks as though the Albanese government is seriously spooked. Mimicking the giveaway proposals of the Greens is not a good look. And let’s face it, the Future Made in Australia is never going to cut through with people across the board being battered by cost-of-living pressures – not just debt-holding graduates.