POLICY & REFORM campusreview. com. au
The last go-round
After much debate, it’ s now crunch time for the government’ s hugely contentious higher-education reforms.
By Andrew Bracey
In the final two weeks of parliamentary sitting for 2014, the Coalition will resume efforts to negotiate its controversial higher-education reforms through a – so far – stubborn Senate.
A three-week parliamentary break followed the release of an eagerly anticipated report from the Senate inquiry into the legislation last month. The document included a handful of changes to the proposed laws, including the potential axing of the planned real interest rates on HECS loans.
The Coalition-dominated inquiry committee called on the government to“ examine HELP indexation measures in light of evidence presented to the committee, recognising unforeseen impacts of the proposed reforms on students”.
Indeed, interest repayments were one of the hottest topics of debate during the Senate committee hearings on the bill. Even the Go8 – one of the most vocal champions of the government’ s broader reforms – warned legislators against the proposed rate changes.
“ The current proposal is regressive, in terms of a tax measure, and so we believe that ' s something that should be addressed,” Go8 chair and Australian National University vice-chancellor professor Ian Young told the inquiry.
In turn, the committee report acknowledged the need to review the legislation’ s originally proposed plans for HECS-loan repayments, and even indicated support for the hybrid repayment model drawn up by HECS architect Bruce Chapman with colleague professor Timothy Higgins. Under the hybrid model, the value of a loan would be indexed against CPI for graduates earning below a set income threshold and at the bond rate for those earning above the same threshold.
“ The committee believes the indexation of HELP debt is an area worthy of further consideration to ensure graduates who may not reach their earning potential are not overly burdened by debt,” the report concluded.
The Coalition-authored section of the report noted that the interest rate on HELP and the conditions of repayment had a significant effect on the size of the debt burden and recommended that the government“ set a rate of indexation that will adequately reflect the borrowing cost to the government but also partially remove the indirect subsidy that all taxpayers contribute to higher education”.
“ The committee was persuaded by evidence presented on alternative indexation models, notably the hybrid model put forward by professor Chapman and Dr Higgins, and urges the government to explore the viability of such a model.”
Yet despite indications from the education minister, Christopher Pyne, that he is prepared to make such concessions in order to gain the key support of the Palmer United Party’ s senators – who appear set to decide the fate of the bill, ultimately – the shape of
12