Statement on the Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025

29 July 2025

At the last federal election, the Albanese government promised to cut student debt by 20 per cent, and this week in parliament we're delivering on that promise. We said it would be the first thing we do when parliament returned after the election, and now we are here delivering it. We're delivering real cost-of-living relief for 18,000 Australians in my electorate with a student debt, we're delivering a better deal for three million Australians across the country with a student debt, and we're reducing the average student debt by about $5,500—in one hit, in one bill.

Labor's commitment to cutting student debts by 20 per cent was one of those policies that, I can tell you, really cut through at the last election. I can't tell you how many voters I met on the doors, on the streets or in the shopping centres in my electorate, at pre-poll or at polling booths on election day who I asked: 'Do you have a student debt? Do you want to buy your first home?' 'Well, vote Labor, and the first thing we'll do is cut your student debt by 20 per cent, then we'll also increase your borrowing capacity with the banks, and, to top it off, we'll enable every Australian to buy their first home with a five per cent deposit without having to pay lender's mortgage insurance.' This cut through because it spoke to a bigger intergenerational injustice. It was offering a fairer deal to young Australians who have gotten a raw deal in recent years. I agree with the member for Kooyong. Young Australians are facing a housing crisis, a cost-of-living crisis and the legacy of a climate crisis.

Of course, it also cut through because the coalition, those opposite, opposed these cuts to student debt when Labor announced them at the last election. They called them 'wasteful'. In this parliament, the coalition's No. 1 priority is now protecting generous tax concessions for Australians with $3 million in superannuation, which is already there for their retirement. These are the intergenerational priorities of the coalition. They still don't get it, and it's no surprise that coalition MPs have been telling journalists in the press gallery that they suspect that even their own children weren't voting for the coalition at the last federal election—and, really, who can blame them?

While we're in this chamber, cutting student debts this week, we should also remember that, when it was introduced, HECS was one of the great innovations of Australian public policy. Consider the challenge that HECS was designed to meet. When the Hawke government came into office, barely one in three Australians finished high school, barely one in three Australians completed grade 12. Through a decade of persistent policy effort, recognising the way the world was changing, recognising the way the global economy was changing and recognising the need for increased skills and increased levels of education, the Hawke government increased funding to secondary schools, targeted disadvantaged areas, modernised curricula, introduced vocational and applied learning pathways and made the case publicly on the need for kids to stay in school longer. After ten years, the Hawke government was able to lift the high school completion rate in Australia to nearly eight in ten—from three in ten Australians finishing high school to eight in ten Australians finishing high school—in a decade. That was an extraordinary expansion of the opportunity of education from a reforming, pioneering government. It's a great Labor legacy.

But what then to do with the now more than doubling of the proportion of Australian school leavers who are now able to dream of going to university? HECS, a deferred-repayment, income-contingent loan scheme, enabled Australian students to contribute to the cost of their degrees proportionate to the expected private salary returns that they could expect to receive from their qualifications, in a way that didn't force them to pay upfront or to face crippling interest repayments on large upfront loans. It enabled students to pay back their student debts only when they were earning the kinds of salaries expected from university study, with debts being indexed rather than subject to private interest rates.

HECS expanded educational opportunity, and did it in a fair and fiscally responsible way. It was a great Labor reform that the Hawke government; the Hawke government's education minister, John Dawkins; and the designer of HECS, Bruce Chapman, can rightly take great pride in. Income-contingent loans of this type have been copied by governments around the world, and it was a Labor innovation. It was an Australian innovation. But, unfortunately, over time, a series of reforms to higher education introduced by those opposite in the last decade—the wasted decade before the election of the Albanese government—broke the balance that made HECS work. The recent COVID-driven inflation spike really threw things off kilter. The spike in the indexation of loans through that period after COVID really got out of control. This bill fixes that. In the previous term of government we wiped $3 billion in student debt from Australian student loans. We fixed indexation to ensure that, in the future, debts cannot grow faster than the wages of the students who have incurred them. Now we are going further to ensure that more money is back in the pockets of more Australians, wiping another $16 billion from three million Australian student debts in the bill that we have debated this week. For the average Australian, with a student debt of $27,000, that's a reduction of more than $5,500.

This bill will also help Australians with student debts who are earning lower wages to keep more money in their pockets, increasing the repayment threshold from $54,000 to $67,000 a year, a recommendation made by the architect of the HECS scheme, Bruce Chapman, who designed it with Dawkins back in the 1980s. I know from media reports that Bruce is very, very excited about that particular reform. This will reduce yearly repayments. For someone on an income of $70,000 a year, it will reduce the amount of compulsory repayments by about $1,300 a year. Australians will only start to pay off their studies when their studies start paying off for them. We're also replacing the current repayment system with a new marginal repayment system. Instead of the amount Australians pay being a percentage of their entire wage, it is a percentage of their wage above the minimum repayment threshold of $54,435. It is a structural change and it's a fairer change that will benefit people with a student debt now and in the years ahead.

In the debate about this bill, particularly during the election, there were some ignorant and smart, snarky comments from conservatives about who these changes would benefit. I'll tell you who these changes will benefit. They will benefit teachers. They will benefit nurses. They will benefit engineers. They will benefit social workers. They will benefit doctors. They will benefit scientists. They will benefit researchers. They will benefit all Australians who've backed themselves by going to university to improve their skills to build our nation. This is betting on Australians who have bet on themselves. This is a bill that rewards aspirational Australians. And it comes on top of a suite of educational reforms that we made under the previous government and that we took to the last election, like fee-free TAFE and prac payments, expanding opportunity in the education system for more Australians.

There's an enormous legacy in this country of pioneering reforms to our education system made by Labor governments. They have a few things in common. They're fair, they expand opportunity, and they let more Australians have access to that ladder of opportunity—the opportunity to improve yourself, to aspire to something better, to back yourself to develop those skills—but they do it in a fair way. That's what this bill that we have passed this week is all about. It's delivering on our commitment to young Australians, to support them to improve their own skills without being burdened with a crippling debt in the future.

This is just the start, though. This government has a big agenda in education policy. It's one that we will continue to work on through the life of this government.