The Coalition has accused the Labor Government of “picking winners” from the cost of living crisis after the Government announced proposed cuts to student debts.
Over the weekend, Prime Minister Anthony Albanese announced election plans to lower student debts and increase fee-free TAFE places.
Senior Coalition figures have argued against the Government’s plans, calling them “unfair” and urging Labor to urgently address high inflation (rising prices).
Student debts
When you begin a higher education/university course, you can either pay upfront or apply for a Higher Education Contribution Scheme loan (HECS) under the Higher Education Loan Program (HELP). Most students apply for this loan.
The system requires students to make payments on their loans depending on their income.
The repayment threshold is currently $54,435. This means if you earn above that amount on a yearly basis, you will start paying off your debt.
Government plans
Over the weekend, Labor announced several higher education reforms and promised to implement them if it wins the next federal election.
This included a 20% discount on all student debts. The Government estimates this policy will cost $16 billion.
It also wants to raise the minimum income for compulsory repayments from $54,435 to $67,000 in the 2025/26 financial year. Additionally, mandatory annual repayments would be reduced for those who earn less than $180,000 a year.
Coalition
Shadow Treasurer Angus Taylor and Shadow Education Minister Sarah Henderson criticised the Government’s plans.
By changing the earnings threshold and lowering the rate of mandatory repayments, Henderson said lower-income earners would be signed up to a “lifetime of debt”.
“Higher student debt makes it harder for young Australians to secure a bank loan and buy their first home,” Henderson said.
On the 20% debt waiver, Taylor argued the Government is “picking winners” in a cost of living crisis.
“More than 24 million Australians struggling with Labor’s cost of living crisis will see no benefit from this policy,” Taylor said.
He added that the $16 billion cost of the policy would ultimately be paid by all taxpayers and do little to address high inflation (rising prices).
Annual inflation dropped to 2.8% in the latest reporting period, down from a high of 7.8% in December 2022.
Fee-free TAFE
The Government also announced a plan to legislate 100,000 fee-free TAFE spots a year from 2027.
TAFEs are run by state and territory governments. Albanese argued a similar policy under his current Government, working with state governments, has already been successful.
Albanese told Labor supporters in Adelaide over the weekend that he wanted to “lock in free TAFE and make it permanent, nationwide”.
Coalition reply
Shadow Skills Minister Sussan Ley accused the Government of failing to consider the “ongoing cost” of 100,000 fee-free vocational training spots a year.
She called on the Government’s Skills Minister Andrew Giles to “be transparent with Australians about how he is spending their money”.
Ley also criticised the announcement for only applying to government-run TAFEs, excluding privately-owned colleges and training programs.
