Speech: government moves to have overseas graduates repay outstanding HELP debts
Monday, 9 November 2015
Senator McKENZIE (Victoria) (19:39): It gives me great pleasure as the Chair of the Senate Education and Employment Legislation Committee to stand here and speak to the government delivering on the Senate doing its work. That is what is so exciting as a chair of a Senate committee—when we work very hard on some of these reports into legislation, we come up with a set of recommendations and those recommendations go on to be adopted by government. During the course of the investigation by my committee into the Higher Education and Research Reform Amendment Bill 2014, the committee report recommended, at recommendation 4:
The committee recommends that the government explore avenues to recover HELP debts of Australians residing overseas.
I will go into the detail of that a little later—fantastic.
Senator Simms, I know you are new to this place, but I tell you what: it was a little frustrating to sit here and be lectured by the Greens on red tape, to be lectured by the Greens on fairness, to be lectured by the Greens about standing up—through you, Mr Acting Deputy President—and to be lectured by a Greens senator on regulation and impost as if somehow the Department of Education and Training and the Australian Taxation Office will suddenly be donning a hat and dark sunglasses, taking a dog and racing around the world searching for those intrepid graduates who are not paying back their HECS debts. I am sorry; that just fails the pub test. It might pass all right down in Fitzroy or whatever the fancy inner-urban suburb of Adelaide is—
Senator Conroy: You leave Melbourne alone.
Senator McKENZIE: but it does not pass the pub test out in the western suburbs, Senator Conroy, it does not pass the pub test anywhere in Hobart, Senator Bilyk, and nor does it pass the pub test anywhere in regional Australia.
We are interested in fairness. As the Prime Minister made very clear with his comments around taxation reform more generally over the last couple of weeks, ours is a government that is interested in fairness. Once the taxpayer subsidises your fabulous law and commerce degree at the University of Adelaide, at UTAS or at the University of Melbourne, you go off to the corporate wonders of the world and, after you have, yes, had a little dalliance in Europe, you end up in New York at Goldman Sachs or Barclays, why should the Australian taxpayer not be recompensed for the gift they have given you and given your family? You have been able to travel the world and be very successful, which is what we want you to do, and take brand Australia to the world—we are very creative and ingenious. We are happy for that to happen, but, at the end of the day, the Australian taxpayer has subsidised your very capacity to earn that salary. It is only right, just and fair that you, as a very well reimbursed and moneyed individual, pay that back.
We are very lucky in this country. Students are absolutely blessed to be in this system. The taxpayer subsidises upwards of 60 per cent of our young people's higher education. That is a great system. They are not having to leave university, like in the US, and be saddled with a student loan they have to start paying back straightaway for 100 per cent of their tuition costs. That does not happen here. You get a HECS debt that you can delay until you can afford to pay it back, for a little over one-half of the cost of your degree. That is a great system. It is a system that was designed by Bruce Chapman. I was in the first HECS generation. It was painful and I have had to listen to everybody who is one year older than me talk about their free education. It is tough, but, at this end, I think it is just and fair.
It is just and fair because, while the Australian taxpayer receives a benefit from my education and from that of any Australian who goes through our higher education system, we also get an individual benefit. What we choose to do with that degree, where we choose to take it and how we choose to maximise the fabulous quality of Australian education is up to us as individuals. So, for those who choose to maximise that by going overseas and earning a lot of money over a long period of time, it is only fair and just that they be required to pay it back.
It was through the committee inquiry that we actually heard about the level of HECS and HELP debt that was not being repaid.
Indeed, it was Professor Chapman, the architect of the original system, who gave us that evidence. He actually urged the committee to examine the matter of lost revenue and to look at the debts of Australians living overseas. Professor Chapman and Dr Higgins estimated in 2013 that between $400 million and $800 million in revenue had been lost since 1989 due to the non-payment of HECS and HELP debt held by Australians residing overseas. I do not know where you live, Senator Simms, but that is hardly 'pitiful' revenue. There are a lot of schools that could be built with $400 million to $800 million. There are a lot of communities that could be supported. There is a lot of key research that could be undertaken through our higher education institutions on the back of $400 million to $800 million.
But I think the most important factor is that there is fairness throughout the system. Right now, if I choose to stay at home—if I choose to stay and support our local economy—I am more disadvantaged than if I choose to take my fabulous Australian higher education and take off to contribute to the economic development of some other nation and some other community so that the very taxpayers who contributed to my education fail to be repaid.
Chapman and Higgins also stated that an additional $20 million to $30 million each year is expected to be at risk due to future graduates moving overseas. We have a much more highly mobile graduate workforce. And that is a good thing. It is good that, as we meet and engage with the businesses, economies and communities of the world, we take our know-how, our entrepreneurial spirit, our innovation and, yes, our agility as graduates, and apply them to the problems and the companies of the world. That is a good thing. We want to encourage that. But we need to ensure that the HECS system is fair to all.
The measures in these bills are estimated to save more than $25 million between 2015-16 and 2018-19 and more than $150 million over 10 years. That is a lot of money. That is a lot of schools. That is a lot of research.
I would argue that this is a matter of fairness. Andrew Norton, who is well known for his research on and passion around higher education policy, also appeared at our committee and talked about the HELP debt issue more generally. He also talked about collecting debts. He also agrees with us that collecting the HELP debts of overseas students is all about fairness.
I cannot believe that the Greens are here arguing against having a fair system. What we do know is that 20 per cent never do repay their HECS debt—20 per cent. That is ridiculous. We need to be ensuring that the taxpayer who has funded that student to attend a variety of institutions across this country, to study a variety of disciplines that all have the capacity to contribute to the growth and development of our nation, actually pay that debt back.
The Australian Taxation Office will provide a simple online tool to enable debtors to easily assess their repayment income and make repayments. So that is far from the convoluted and evocative language that Senator Simms chose to put in his speech. Really, I thought I was about to watch a Steven Spielberg movie, as the poor student was subject to the tyranny of the state chasing them around the world looking for their 25 grand for their business degree!
That is not going to be the case. Students across Australia: it is okay; we just want to make sure that, when you are earning enough money overseas that you can afford to pay back your HECS debt to the Australian public, you do it—just like your mates who stay at home. If you are over in London on a good wage, it is hardly unfair that you are expected to contribute back to your HELP debt.
Senator Simms, you also talked about how onerous it was for these poor graduates—who, by the way, are running companies overseas that Goldman Sachs are relying on for advice, thanks to the degree. These young Australians who are doing fabulous things overseas—
Senator Canavan interjecting—
Senator Whish-Wilson interjecting—
Senator McKENZIE: And I would love it if, in the committee stage, I could ask Senator Whish-Wilson if he contributed to paying back his HELP debt while he was working overseas, or whether he was not earning enough money to do that. I suspect I know the answer to that question, but I am happy to have that conversation off-line.
As to these people being somehow impotent and not aware of their responsibilities—I think, Senator Simms, that was the most classic line you used. Yes, I am sorry, but we do expect you, by the time you graduate from higher ed and you are managing people and handling transactions worth millions of dollars, to be aware of your responsibility under the law. If you are a driver in Victoria and have a licence, and if you change your address and you are 18, then, yes, the state expects you to inform it that you have changed your address. So I do not think it is onerous on a 24-year-old, 25-year-old, 30-year-old or 36-year-old to be aware of their responsibilities under the law with respect to this issue.
Whilst I think it is wonderful to be lectured by the Greens on priorities, I did just want to briefly touch on some of the priorities that they have focused on over time that really go against those notions of fairness that underpin this bill. From the conversation today, and from continual contributions from the Greens, it is very clear who and what they prioritise: it is the wealthy; it is those who are highly educated—those who have an elite education; and it is the entitled. Rather than prioritising the workers in manufacturing, rather than prioritising those who have jobs in forestry, rather than prioritising those in the mining industry, rather than prioritising jobs in regional Australia and in agriculture, you come in here, with the seats you hold, with the highest median incomes, and lecture us on fairness. It is absolutely offensive.
This bill is all about fairness. No, it is not going to fix the surplus with what it will get back, but it is about principles, underlying how this government approaches its relationship with people and how it prioritises its relationship with taxpayers. Taxpayers invest in us, as graduates, and it is only fair and just that we repay them whenever and however we can. This is a bill that will allow us to do that.
I thank the minister for adopting the recommendations of the Senate committee. It is always fabulous to have that occur. I know my colleagues will be very happy that this is occurring. I also thank the Labor Party, and Senator Carr particularly, for supporting this bill, which actually adjusts fairness to the system that was brought in by the Hawke government: the Chapman design, which ensures all students in this country are treated fairly.