Anthony Albanese’s plan to reduce HECS debt by $14 billion for university students if he wins the next election has been criticized by leading economists.
Albanese said reducing the HECS debts of millions of university students will address the financial inequality experienced by younger Australians.
But Ashley Craig, a former Reserve Bank of Australia economist, said the plan would be a “subsidy for those with tertiary education, paid for by those without”.
Craig, now a researcher at the Australian National University, told Financial review and, to make matters worse, it also divides college graduates by favoring the wealthiest.
He said graduates who never earn more than the proposed new payment threshold of $67,000 will get no benefits.
‘The biggest benefit goes to people with higher incomes who would otherwise have paid it back quickly. All that, and it doesn’t help anything with the current cost of living.
The Prime Minister said in a speech in Adelaide on Sunday that the Labor government’s plan “is about putting money back into pockets and putting intergenerational fairness back into the system”.
He added that it would be “good for the cost of living, good for this generation and for generations to come.”
Anthony Albanese’s (pictured) plan to reduce HECS debt by $14 billion for university students if he wins the next election has been criticized by leading economists.
But Chris Richardson, one of Australia’s most respected economists, said taxpayers will pay the biggest cost of the debt if Labor wins the next election.
“Governments are taking more and more spending ‘off-budget’ and hiding it, such as student loans, NBNs and climate loans,” Richardson said. “Taxpayers are still paying for it.”
The federal opposition is also vehemently opposed to Albanese’s plan, saying it would cost every Australian household $1,600.
Coalition education spokesperson Sarah Henderson said it discriminated against the millions of Australians who did not have student loans.
“(This) especially favors graduates who have accumulated very large debts, many of whom will also earn high incomes during their lifetime,” he said.
“This is also grossly unfair to the millions of Australians who, in good faith, have worked hard to pay off their HELP debt without discount.”
However, Education Minister Jason Clare took a very different view, saying students now pay more than 40 per cent of the total cost of their degrees, compared to around 30 per cent of the cost at the start of the decade. of 2000.
“A lot of young people are just out of university, they’re on a low income, they’re paying their rent, they’re paying their bills, they’re trying to save for a mortgage, they’re trying to start a family and they’re already having to start paying their HECS bill,” he said.
“It’s a simple fact that many young people are having a tough time, more so than many other Australians.”
Bruce Chapman, the architect of HECS for Bob Hawke’s then Labor government in 1989, had mixed views on Albanese’s proposal, saying that “one-off debt relief is more about politics than economics”.
Albanese said reducing the HECS debts of millions of university students will address the financial inequality experienced by younger Australians. stock image
Coalition education spokesperson Sarah Henderson (pictured) said Labor’s plan discriminated against the millions of Australians who did not have student loans.
But he added that “what the Government has done in terms of payment arrangements is really good and equitable.”
“The big remaining issue is that when the previous (coalition) government changed the cost of courses in 2020, they got all the prices wrong, which was the worst higher education policy ever adopted in Australia,” Chapman said.
Albanese said that “fixing this intergenerational injustice… will take time, but that is no excuse to delay it.”
He said that if Labor wins the election, scheduled for next May, its HECS debt plan will be the first piece of legislation it presents to parliament.
Greens Higher Education spokesperson Mehreen Faruqi said debt reduction was an important step forward but needed to be done sooner.
“Instead of promising to eliminate some student debt if they are re-elected, Labor should start eliminating student debt now,” he said.
“Student debt relief should not be dangled like a carrot on a stick and held hostage to upcoming election results.”