‘Money in your pocket': Aussie student debt-slashing laws still months away
Millions of Aussies with outstanding student debt will have their deficits deepened on Sunday, despite a promised slashing of student debt being some two months away.
One of Labor's big ticket pre-election promises was to slash HECS, VET and apprenticeship loans by 20 per cent as soon as Anthony Albanese's government was re-elected.
People's debt will jump on Sunday when the annual increase kicks in, as laws to make the 20 per cent cut won't be introduced to parliament until MPs return in late-July.
'It will be the first bill that we introduce into the parliament when parliament sits for the first time in the last week of July,' Education Minister Jason Clare said this week.
The 20 per cent cut will be backdated but will not annul the June 1 annual increase. Student debts will be jacked up 3.2 per cent on Sunday, in line with the consumer price index. But once the tax office wipes 20 per cent, the annual indexation increase will then actually be applied.
Slashing student debts by 20 per cent will cost the federal budget $700m during the next four years, and $16bn over the coming decades.
The average student debt in Australia is about $28,000; last term, the federal government tweaked the annual increases after debts skyrocketed during the back-end of the pandemic with massive inflation.
'I think everyone listening will know somebody in this situation and perhaps will know that HECS debts are bigger today than they were when I went to uni, when many of us went to university – that by cutting this debt by 20 per cent, it's going to help a lot of people get a good start in life, make it easier to get out there and buy their first home,' Mr Clare said on ABC radio this week.
Higher education was free in Australia from 1974 until 1989. Initially, all degrees then cost $1800, but in 1996 the federal government brought in three-tiered rates.
The current Education Minister, Mr Clare, finished with a bachelor of arts and a law degree from UNSW in 1998.
The laws required to slash student debts by 20 per cent will have other functions too.
'It will change the amount of money that you have to earn before you start paying your debt back,' Mr Clare said.
The threshold to start paying off the debt will rise from $54,000 to $67,000. For someone being paid $70,000, repayments should decrease $1300-per-year.
'It means more money in your pocket,' Mr Clare said.
Laws need to change so the tax office can wipe 20 per cent off the debts.
Labor will have to rely on the Greens to pass the laws through the senate. During the election campaign, the Greens said they would wipe all student debt if elected.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
West Australian
30 minutes ago
- West Australian
Aged care sector backs delay for major reform to the industry
The Albanese government is delaying its 'once-in-a-generation' aged care reforms to give providers more time to prepare. Bolstering regulation, simplifying in-home care services and increasing how much wealthier retirees pay toward non-clinical services were among the key changes set to kick in on July 1. But after months of warnings from the sector, Health Minister Mark Butler announced on Wednesday Labor was pushing the start date back by four months. 'We have been clear that we want to successfully deliver these reforms in the right way,' Mr Butler said in a joint statement with Aged Care Minister Sam Rae. 'We have received advice from the sector and experts that more time will improve the delivery of these reforms and minimise disruption. 'Following careful consideration, the government will recommend to the Governor-General ... that she proclaim the commencement of the new Aged Care Act to be 1 November 2025. 'This will allow more time for aged care providers to prepare their clients, support their workers and get their systems ready for the changes. 'It will also give us more time to finalise key operational and digital processes, and for parliament to consider supporting legislation that will enable the new act to operate effectively.' Treasurer Jim Chalmers told reporters the delay would have a 'modest' $900m impact on Commonwealth coffers over the next four years. The sector has welcomed the delay, with the Older Persons Advocacy Network (OPAN) saying it switched its position in recent weeks due to concerns 'older people don't have the necessary information to make informed choices'. 'Until now, OPAN has been steadfast in its call for the Act to be implemented, as promised, on 1 July 2025, because older people can't get the aged care they need without it,' OPAN chief executive Craig Gear said. 'However, over the past weeks it has become increasingly apparent that, while the macro design of the reform is solid, older people don't have the necessary information to make informed choices at an individual level, particularly around the new Support at Home program. 'We are also concerned that the appropriate systems aren't yet in place to ensure continuity of care and services for older people during the transition.' The Council on the Ageing (COTA) also welcomed the move. 'We wanted a 1 July start date so people didn't have to wait any longer for their rights than they already have, but ultimately, we concluded it's far more important to get it right and ensure that older people understand what will happen for them,' COTA chief executive Patricia Sparrow said. Ms Sparrow called on the Albanese government to continue releasing 'extra packages of support for people living at home and reduce the home care package wait list even with the delayed start for the new Support at Home program'. Meanwhile, the Coalition has blasted the delay as 'a clear admission of failure'. 'The government was warned,' opposition health spokeswoman Anne Ruston said in a statement. 'We put forward a responsible, measured amendment to ensure that their reforms could be rolled out safely and effectively, and Labor opposed it. 'The aged care sector has been crying out that the 1 July deadline was not deliverable without causing serious negative consequences. 'Why has it taken the government until five minutes to midnight to alleviate the stress and uncertainty they have inflicted?'
Perth Now
31 minutes ago
- Perth Now
Major delay to Albo's agenda
The Albanese government is delaying its 'once-in-a-generation' aged care reforms to give providers more time to prepare. Bolstering regulation, simplifying in-home care services and increasing how much wealthier retirees pay toward non-clinical services were among the key changes set to kick in on July 1. But after months of warnings from the sector, Health Minister Mark Butler announced on Wednesday Labor was pushing the start date back by four months. 'We have been clear that we want to successfully deliver these reforms in the right way,' Mr Butler said in a joint statement with Aged Care Minister Sam Rae. 'We have received advice from the sector and experts that more time will improve the delivery of these reforms and minimise disruption. 'Following careful consideration, the government will recommend to the Governor-General ... that she proclaim the commencement of the new Aged Care Act to be 1 November 2025. 'This will allow more time for aged care providers to prepare their clients, support their workers and get their systems ready for the changes. 'It will also give us more time to finalise key operational and digital processes, and for parliament to consider supporting legislation that will enable the new act to operate effectively.' The Albanese government is delaying its 'once-in-a-generation' aged care reforms. NewsWire / Martin Ollman Credit: News Corp Australia Treasurer Jim Chalmers told reporters the delay would have a 'modest' $900m impact on Commonwealth coffers over the next four years. The sector has welcomed the delay, with the Older Persons Advocacy Network (OPAN) saying it switched its position in recent weeks due to concerns 'older people don't have the necessary information to make informed choices'. 'Until now, OPAN has been steadfast in its call for the Act to be implemented, as promised, on 1 July 2025, because older people can't get the aged care they need without it,' OPAN chief executive Craig Gear said. 'However, over the past weeks it has become increasingly apparent that, while the macro design of the reform is solid, older people don't have the necessary information to make informed choices at an individual level, particularly around the new Support at Home program. 'We are also concerned that the appropriate systems aren't yet in place to ensure continuity of care and services for older people during the transition.' Aged care providers have been warning for months they need more time to prepare their clients for the reforms. Supplied Credit: Supplied The Council on the Ageing (COTA) also welcomed the move. 'We wanted a 1 July start date so people didn't have to wait any longer for their rights than they already have, but ultimately, we concluded it's far more important to get it right and ensure that older people understand what will happen for them,' COTA chief executive Patricia Sparrow said. Ms Sparrow called on the Albanese government to continue releasing 'extra packages of support for people living at home and reduce the home care package wait list even with the delayed start for the new Support at Home program'. Meanwhile, the Coalition has blasted the delay as 'a clear admission of failure'. 'The government was warned,' opposition health spokeswoman Anne Ruston said in a statement. 'We put forward a responsible, measured amendment to ensure that their reforms could be rolled out safely and effectively, and Labor opposed it. 'The aged care sector has been crying out that the 1 July deadline was not deliverable without causing serious negative consequences. 'Why has it taken the government until five minutes to midnight to alleviate the stress and uncertainty they have inflicted?'
Perth Now
an hour ago
- Perth Now
Australia seeks 'best deal' after UK tariff carve-out
Australia is hoping to follow in an ally's footsteps after Donald Trump granted a single exemption to his supercharged tariffs. The US president revealed he will double to 50 per cent tariffs on steel and aluminium imports on every trading partner except the UK, which will remain subject to the original 25 per cent rate after striking a deal with his administration. As Prime Minister Anthony Albanese prepares to hold a potential in-person meeting with Mr Trump, the announcement offers a glimmer of hope. But Treasurer Jim Chalmers said Australia could not take any outcomes for granted. "We've made it very clear what we think about those tariffs," he told reporters in Canberra on Wednesday. "We will continue to engage, as the friends in the UK have - and most countries have - trying to get the best deal that we can for our people and for our industries." Mr Albanese has repeatedly called the US tariffs "an act of economic self-harm" and may try negotiate an exemption on the sidelines of the G7 conference or in the US during a June trip to North America. His trade minister Don Farrell has already begun making inroads with the US administration, meeting with his American counterpart Jamieson Greer in Paris. Opposition Leader Sussan Ley said the coalition was ready to work with Labor to ensure Australia could also secure a tariff carve out. "President Trump's tariffs on our steelmakers are not in the spirit of our century-old partnership and we urge the Americans to give Australia a fair go and remove them," Ms Ley said. "The coalition wants the government to succeed here because that is in our national interest." The statement represents a clear departure from the rhetoric of previous opposition leader Peter Dutton, who claimed a coalition government would be able to lock in a tariff exemption even though no country at the time had managed to do so. Mr Trump's 50 per cent steel and aluminium tariff has come into effect as Australia grapples with the 10 per cent baseline "Liberation Day" levies announced in April. The prime minister has already had three "really constructive" discussions with Mr Trump and said Australia wanted to support free trade between the two countries.
