Latest news with #MatthewMaltman
Sky News AU
21-07-2025
- Business
- Sky News AU
'Unfair and regressive': Tradies and frontline workers foot the bill for Labor's $16 billion student debt promise
Australians without a university degree - including tradespeople, aged care workers and hospitality staff - will be forced to fund Labor's $16 billion debt relief promise, but won't benefit from the policy. Australians without a university degree - including tradespeople, aged care workers and hospitality staff - will be forced to help fund billions in debt relief they'll never benefit from. The Albanese government has made its $16 billion promise to cut student debt by 20 per cent the first order of business when parliament resumes on Tuesday. It comes as new research found more than half of the benefits of the debt cut will only benefit the wealthiest 30 per cent of income earners in 10 years' time. Economists have warned that the cost of this reform will be borne by those who never went to university - including builders, labourers, and low-income workers. Meanwhile, those who stand to benefit the most include higher-paid graduates and individuals who recklessly racked up eye-watering loans of more than $250,000. Senior economists labelled the policy 'unfair' and 'regressive', pointing to serious flaws in both its economic impact and its lack of equality. Regressive wealth transfer Non-partisan economic researchers at the e61 Institute have raised alarms over the fairness of the debt cut plan. The institute recently published research which shows more than half of the benefits of the debt cut will assist the wealthiest 30 per cent of income earners in 10 years. Senior Research Economist Matthew Maltman told Sky News that the government's approach failed key measures of equitability. 'On vertical equity, we note that two individuals who graduate under similar circumstances are treated very differently by the debt relief policy,' Mr Maltman said. 'On horizontal equity, we note that over half the benefits of the student debt cut go to individuals who ended up in the top third of all income earners 10 years later. 'In this sense, the policy is a large regressive wealth transfer.' Mr Maltman also noted that those who never went to university, have already paid off their debt, or are yet to study, will still have to pay but receive no benefit. 'These groups will effectively be partially bearing the fiscal cost for the policy for no benefit,' Maltman said. The institute estimated that only 20 per cent of HELP debt holders will repay their loans earlier as a result of the cut. Because repayments are based on income - not debt size - the vast majority will see little to no change in their take-home pay. 'Despite the large fiscal cost of the policy, our research suggests it is unlikely to deliver much of an economic benefit,' Maltman said. — Jason Clare MP (@JasonClareMP) July 17, 2025 'Unfair to taxpayers' Senior Fellow at the Centre for Independent Studies Robert Carling told Sky News the policy undermined the 'user pays' principle and will push the cost onto taxpayers. 'The HECS debt relief measure is unfair to the many students who have already paid their debts in full,' Mr Carling said. 'It is also unfair to taxpayers in general … it will mean less money coming back to the government, a real cost to taxpayers, and higher government debt than would otherwise have been the case.' Mr Carling warned that the relief was used as a 'pre-election policy' by the Labor Party rather than a sensible economic policy measure. 'HECS debt relief is rewarding decisions made by people in the past; it does not improve incentives for people taking decisions today,' he said. 'The only incentive it gives is for past students to agitate for more debt relief now that they've been given a taste of it.' Poor timing and policy coherence The Albanese government has cited rising cost-of-living pressures and the impact of HECS indexation as the justification for the cut. 'This is something that we promised … that we would cut the student debt of 3 million Australians by 20 per cent,' Education Minister Jason Clare said last week. 'It's worth something in the order of $16 billion dollars. And for the average Australian with a student debt it will cut their debt by more than $5,500.' New parliamentary library analysis, however, showed the debt cut would amount to less than 10 per cent—rather than the 20 per cent promised, due to indexation years of indexation. According to the analysis, students owing $30,000 in loans when Labor came to power will see their debt cut to $27,619 after indexation and the 20 per cent cut are applied. That amounts to just $2,381 in relief, or a 7.9 per cent reduction on the original debt balance. 'If the government wanted to help younger people, there are better ways to do it than this - such as through housing policy or lower income tax,' Mr Carling said. The e61 Institute also pointed out that aligning the HECS debt relief with the broader Universities Accord reforms would make the policy fairer and more strategic. 'Aligning the HECS cut with future reform objectives would have strengthened its coherence and fairness,' Mr Maltman said. Despite the criticisms, Labor has pushed the legislation to the top of its agenda for the upcoming parliamentary sitting. Prime Minister Anthony Albanese declared on Monday that 'getting an education shouldn't mean a lifetime of debt'. 'We promised cutting student debt would be the first thing we did back in parliament … We're introducing the legislation to make it happen,' Mr Albanese said. The opposition has left the door open to passing the bill through the parliament, despite previously criticising it as 'populist' and 'economically irresponsible'. Shadow Education Minister Jonno Duniam acknowledged that there were 'criticisms' of the proposal, but did not outwardly oppose the measure. 'I mean this is a one-off hit to a cohort of the community funded by everyone in the community,' he said on Sunday. 'At the end of the day though the government want to pass this legislation urgently to pass on this relief from HECS debts.
Sky News AU
21-07-2025
- Business
- Sky News AU
Labor's 20 per cent student debt cut delivers only 7.9 per cent real reduction, parliamentary analysis finds
The Albanese government's much-celebrated 20 per cent student debt cut will deliver only a 7.9 per cent real reduction, new parliamentary library analysis has revealed. The research, released by the Australian Greens on Monday, showed the $16 billion student debt relief package has been eroded by three years of indexation. High inflation over the first term of the Albanese government caused student debts to balloon as they were indexed each financial year. According to the analysis, students owing $30,000 in loans when Labor came to power will see their debt cut to $27,619 after indexation and the 20 per cent cut are applied. That is just $2,381 in relief, or a 7.9 per cent reduction on their original balance. Despite the government's changes to indexation, the compounding impact of annual increases has significantly diluted the long-term benefit of the one-off policy. The policy drew widespread criticism when it was announced for its high cost and perceived unfairness, particularly for taxpayers without student debt. The total cost of the policy was earmarked at $16 billion, providing assistance to just three million people, while 24 million Australians without HELP debt receive nothing. Concerns over fairness also intensified after Sky News revealed that nearly 40,000 overseas-based debtors will receive close to $50 million in taxpayer-funded relief. The students that were most reckless with their loans also stand to benefit the most, with some individuals racking up hundreds of thousands in debt. Not-for-profit research body e61 Institute recently exposed the way the policy will unfairly benefit students who graduated in 2024. University students who finished their degrees in 2024 will receive twice as much relief as people who left in 2020, according to e61. 'Most HELP debt is held by university graduates, who have much higher lifetime incomes than the average taxpayer,' e61 Research Economist Matthew Maltman said. 'And even if you look within graduates, those with more costly degrees tend to go on to earn higher incomes in the future. 'The current policy isn't at all targeted and that means it's going to give a very large amount of debt relief to future lawyers, dentists and doctors.'
News.com.au
02-07-2025
- Business
- News.com.au
Labor urged to rethink 20 per cent student debt cut as leading research body calls for flat $5500 relief
A flat $5500 reduction of HELP debt would deliver better uniform relief for Australians with student debt, with analysis of Labor's signature policy finding that the cost-of-living relief would currently largely help high-income earners. The research, released by not-for-profit research body e61 Institute on Thursday found the policy as is, doesn't meaningfully speed up debt repayment, and unfairly benefits students who graduated in 2024. Instead of a 20 per cent cut to balances, e61 said the relief would be better targeted if Australia's with student debt were given a flat $5500 cut. The figure also represents the average amount set to be wiped across all HELP accounts. e61 said that a $5500 reduction would help 35 per cent of account holders make their final repayment in an earlier year, or 15 per cent more debt holders than a 20 per cent discount. e61 Research Economist Matthew Maltman said the benefits of a straight cut was important factor due to the policy's $16bn price tag, which equals the annual cost of Jobseeker. 'Most HELP debt is held by university graduates, who have much higher lifetime incomes than the average taxpayer. And even if you look within graduates, those with more costly degrees tend to go on to earn higher incomes in the future,' he said. 'You could make the argument that we need to provide debt relief to humanities students in a targeted way because of Job Ready Graduates. 'But the current policy isn't at all targeted and that means it's going to give a very large amount of debt relief to future lawyers, dentists and doctors who are going to go on to enjoy very high lifetime incomes.' University students who finished their degrees in 2024 will also receive twice as much relief as people who left in 2020, and two and a half times more than students who are currently in their first year of a three year degree. e61 Senior Research Economist Jack Buckley said this would create a debt relief lottery. 'If you cut 20 per cent of each individual's balance, it means two very similar people will receive very different amounts of debt relief simply because one finished their degree in 2024 and the other finished a few years earlier or later,' said Mr Buckley. Anthony Albanese has repeatedly said the 20 per cent cut to HELP debts will be the first piece of legislation passed when parliament returns on July 22, with the changes backdated to account balances as of June 1. Labor is also set to increase the debt repayment threshold from $56,156 to $67,000, repayments of payment will also be lowered.
The Advertiser
02-07-2025
- Business
- The Advertiser
Uni debt relief set to benefit richer students more
Wealthier students are set to benefit more from future plans to cut university debt levels than those on lower incomes, research has shown. Analysis into a federal government proposal to slash HECS debts by 20 per cent found more than half of the financial relief offered will go to the top third of earners. Meanwhile, the study by the e61 Institute found less than 20 per cent of the measure will flow through to those in the bottom third. The plan to cut tertiary education debt will be the first legislation introduced by the federal government in Anthony Albanese's second term when parliament resumes on July 22. The cuts will be backdated to June, when debts increased by a further 3.2 per cent due to indexation. The institute's research economist Matthew Maltman said modelling showed the cut would do little to speed up the repayment of student debt. "If you simulate the effects of a 20 per cent cut on HELP debt holders, you find that for 80 per cent of recipients, the year in which they repay their debt is unchanged," he said. "In terms of delivering cost-of-living relief or easing financial pressures on young people, the benefits of the policy are likely to be modest." The average student debt is about $27,600, meaning $5520 would be cut off repayments. The benefits of the debt reduction would also be dependent on when students completed their university degree, the institute's Jack Buckley said. "Individuals who left university in 2024 will on average receive twice as much debt relief as those who left only four years earlier in 2020 and two and a half times as much as those who will leave four years later in 2028," he said. "Two very similar people will receive very different amounts of debt relief simply because one finished their degree in 2024 and the other finished a few years earlier or later." The institute has called for the 20 per cent reduction to be changed to a flat amount of about $5500 per student. "Each former student with a HELP debt receives the same amount of support, or has their debt wiped, regardless of whether they studied law or teaching," Mr Buckley said. Wealthier students are set to benefit more from future plans to cut university debt levels than those on lower incomes, research has shown. Analysis into a federal government proposal to slash HECS debts by 20 per cent found more than half of the financial relief offered will go to the top third of earners. Meanwhile, the study by the e61 Institute found less than 20 per cent of the measure will flow through to those in the bottom third. The plan to cut tertiary education debt will be the first legislation introduced by the federal government in Anthony Albanese's second term when parliament resumes on July 22. The cuts will be backdated to June, when debts increased by a further 3.2 per cent due to indexation. The institute's research economist Matthew Maltman said modelling showed the cut would do little to speed up the repayment of student debt. "If you simulate the effects of a 20 per cent cut on HELP debt holders, you find that for 80 per cent of recipients, the year in which they repay their debt is unchanged," he said. "In terms of delivering cost-of-living relief or easing financial pressures on young people, the benefits of the policy are likely to be modest." The average student debt is about $27,600, meaning $5520 would be cut off repayments. The benefits of the debt reduction would also be dependent on when students completed their university degree, the institute's Jack Buckley said. "Individuals who left university in 2024 will on average receive twice as much debt relief as those who left only four years earlier in 2020 and two and a half times as much as those who will leave four years later in 2028," he said. "Two very similar people will receive very different amounts of debt relief simply because one finished their degree in 2024 and the other finished a few years earlier or later." The institute has called for the 20 per cent reduction to be changed to a flat amount of about $5500 per student. "Each former student with a HELP debt receives the same amount of support, or has their debt wiped, regardless of whether they studied law or teaching," Mr Buckley said. Wealthier students are set to benefit more from future plans to cut university debt levels than those on lower incomes, research has shown. Analysis into a federal government proposal to slash HECS debts by 20 per cent found more than half of the financial relief offered will go to the top third of earners. Meanwhile, the study by the e61 Institute found less than 20 per cent of the measure will flow through to those in the bottom third. The plan to cut tertiary education debt will be the first legislation introduced by the federal government in Anthony Albanese's second term when parliament resumes on July 22. The cuts will be backdated to June, when debts increased by a further 3.2 per cent due to indexation. The institute's research economist Matthew Maltman said modelling showed the cut would do little to speed up the repayment of student debt. "If you simulate the effects of a 20 per cent cut on HELP debt holders, you find that for 80 per cent of recipients, the year in which they repay their debt is unchanged," he said. "In terms of delivering cost-of-living relief or easing financial pressures on young people, the benefits of the policy are likely to be modest." The average student debt is about $27,600, meaning $5520 would be cut off repayments. The benefits of the debt reduction would also be dependent on when students completed their university degree, the institute's Jack Buckley said. "Individuals who left university in 2024 will on average receive twice as much debt relief as those who left only four years earlier in 2020 and two and a half times as much as those who will leave four years later in 2028," he said. "Two very similar people will receive very different amounts of debt relief simply because one finished their degree in 2024 and the other finished a few years earlier or later." The institute has called for the 20 per cent reduction to be changed to a flat amount of about $5500 per student. "Each former student with a HELP debt receives the same amount of support, or has their debt wiped, regardless of whether they studied law or teaching," Mr Buckley said. Wealthier students are set to benefit more from future plans to cut university debt levels than those on lower incomes, research has shown. Analysis into a federal government proposal to slash HECS debts by 20 per cent found more than half of the financial relief offered will go to the top third of earners. Meanwhile, the study by the e61 Institute found less than 20 per cent of the measure will flow through to those in the bottom third. The plan to cut tertiary education debt will be the first legislation introduced by the federal government in Anthony Albanese's second term when parliament resumes on July 22. The cuts will be backdated to June, when debts increased by a further 3.2 per cent due to indexation. The institute's research economist Matthew Maltman said modelling showed the cut would do little to speed up the repayment of student debt. "If you simulate the effects of a 20 per cent cut on HELP debt holders, you find that for 80 per cent of recipients, the year in which they repay their debt is unchanged," he said. "In terms of delivering cost-of-living relief or easing financial pressures on young people, the benefits of the policy are likely to be modest." The average student debt is about $27,600, meaning $5520 would be cut off repayments. The benefits of the debt reduction would also be dependent on when students completed their university degree, the institute's Jack Buckley said. "Individuals who left university in 2024 will on average receive twice as much debt relief as those who left only four years earlier in 2020 and two and a half times as much as those who will leave four years later in 2028," he said. "Two very similar people will receive very different amounts of debt relief simply because one finished their degree in 2024 and the other finished a few years earlier or later." The institute has called for the 20 per cent reduction to be changed to a flat amount of about $5500 per student. "Each former student with a HELP debt receives the same amount of support, or has their debt wiped, regardless of whether they studied law or teaching," Mr Buckley said.
West Australian
02-07-2025
- Business
- West Australian
Uni debt relief set to benefit richer students more
Wealthier students are set to benefit more from future plans to cut university debt levels than those on lower incomes, research has shown. Analysis into a federal government proposal to slash HECS debts by 20 per cent found more than half of the financial relief offered will go to the top third of earners. Meanwhile, the study by the e61 Institute found less than 20 per cent of the measure will flow through to those in the bottom third. The plan to cut tertiary education debt will be the first legislation introduced by the federal government in Anthony Albanese's second term when parliament resumes on July 22. The cuts will be backdated to June, when debts increased by a further 3.2 per cent due to indexation. The institute's research economist Matthew Maltman said modelling showed the cut would do little to speed up the repayment of student debt. "If you simulate the effects of a 20 per cent cut on HELP debt holders, you find that for 80 per cent of recipients, the year in which they repay their debt is unchanged," he said. "In terms of delivering cost-of-living relief or easing financial pressures on young people, the benefits of the policy are likely to be modest." The average student debt is about $27,600, meaning $5520 would be cut off repayments. The benefits of the debt reduction would also be dependent on when students completed their university degree, the institute's Jack Buckley said. "Individuals who left university in 2024 will on average receive twice as much debt relief as those who left only four years earlier in 2020 and two and a half times as much as those who will leave four years later in 2028," he said. "Two very similar people will receive very different amounts of debt relief simply because one finished their degree in 2024 and the other finished a few years earlier or later." The institute has called for the 20 per cent reduction to be changed to a flat amount of about $5500 per student. "Each former student with a HELP debt receives the same amount of support, or has their debt wiped, regardless of whether they studied law or teaching," Mr Buckley said.
