Why Australia is slashing $10 billion off student debt
The ruling Australian Labor Party has promised to wipe out around A$16 billion ($10 billion) in debts for approximately three million Australians in a bid to woo young voters. Prime Minister Anthony Albanese announced that if re-elected, his government would reduce Higher Education Contribution Scheme (HECS) debts for university graduates by 20%. The initiative could save some Australians up to AUD10,000 ($7,300).
Education Minister highlights impact of proposed policy
Education Minister Jason Clare highlighted how this policy could affect young Australians, adding it would be the first legislation introduced if Labor wins the election. He said the change could benefit around three million Australians with university or Technical and Further Education (TAFE) qualifications. "A lot of Australians are doing it tough at the moment," Clare said.
Labor plans to raise HECS repayment threshold
Along with the debt reduction, Labor also intends to increase the HECS repayment threshold from AUD54,000 ($39,500) to AUD67,000 ($49,000). This means graduates would only start repaying their debt when earning above this new threshold. The repayment system would be adjusted according to income above this level. The Albanese government also plans to create an Australian Tertiary Education Commission. This body would set university fees and improve funding models for higher education institutions.
Labor's commitment to higher education and economic future
The pledges were made ahead of the next general election, due in 2025. Shadow foreign affairs minister Simon Birmingham has questioned the government's latest pledge, describing it as a "cash splash." "I think the initial reaction is, 'where is the money coming from?'" "When Anthony Albanese was elected...he inherited an improving budget position...But the actions of this government, the big spending decisions..., have created a...deteriorating position that will see higher deficits in the year ahead," he told Sky News.
Albanese government's plans for higher education
Shadow treasurer Angus Taylor and shadow education minister Sarah Henderson also blasted the Albanese government, stating that it had failed to "address the cost-of-living crisis facing all Australians at its source." "More than 24 million Australians struggling with Labor's cost of living crisis will see no benefit from this policy, but all 27 million Australians will pay the price for it," Taylor said.
