The Liberal Party has announced that it will not support Labor’s proposed 20 per cent debt-reduction scheme for students, which aims to decrease the average Higher Education Loan Program (HELP) debt of approximately $27,600 by around $5,520. This initiative was designed to assist over three million students and has been a central feature of Prime Minister Anthony Albanese’s pre-election promises, aiming to address concerns over escalating student debt that can reach as high as $50,000 or more.
The Coalition has expressed criticism regarding Labor’s approach, arguing that it is unjust for taxpayers to subsidise university students while other young Australians, such as tradespeople who incur debts for tools and vehicles, receive no similar support. The Liberal Party’s statement indicates a preference for directing funds towards small business tax relief rather than funding a plan that they see as benefiting only a select group of the population. Coalition education spokeswoman Sarah Henderson has labelled the proposal as “elitist,” asserting that the plan primarily benefits those with access to higher education, thereby ignoring other financial burdens faced by Australians.
The debt-reduction proposal includes an increase in the income threshold for HELP repayments, raising it from about $54,000 to $67,000 per annum. Consequently, an Australian earning $70,000 would see a reduction of around $1,300 in their annual HECS repayments. This adjustment aims to alleviate some of the financial strain experienced by graduates entering the workforce.
Labor’s rationale for the plan is rooted in addressing intergenerational inequality, with the Prime Minister noting that current graduates are left with substantial debts that adversely affect their financial wellbeing. He argues that fixing this issue would require significant investment to alleviate the pressures of rising living costs on students.
The Liberal Party’s decision not to back Labor’s debt reduction initiative highlights differing philosophical approaches on how to address the financial challenges facing students and graduates in Australia, illustrating a wider debate on entitlement and the responsible allocation of taxpayer funds. As discussions continue, the Coalition has yet to provide further commentary on the matter.