Push to remove $3.2 billion ‘stealth tax’ impacting millions of Aussies

A new plan to remove a $3.2 billion “stealth tax” for nearly three million Australians was put before parliament on Monday.

Independent MP Monique Ryan has tabled a bill to prevent students and graduates from being charged on top of the HECS debt they have already made repayments on.

“We wouldn’t accept it if interest was applied to our mortgages or our credit card debts after we’ve made repayments towards those accounts,” she told reporters in Canberra.

“But Australian graduates, who are dealing with a cost-of-learning crisis, are being forced to pay more on their HECS debts because of the unfair way indexation is applied.”

Under the current system, indexation is applied to HECS debt at the start of each financial year on June 1 before repayments from the previous year can be credited to accounts.

Ryan described it as a “stealth tax”.

Read more

Niamh went to school, then hospital. Six months later, she still hasn’t come home

Her legislation proposes moving the indexation date to November 1, so people with HECS are indexed on their debt after their repayments are credited.

The Parliamentary Budget Office has costed the plan and suggested it would save students and graduates $3.2 billion in indexation over 10 years.

“It will remove some of the burden of what has become an unfair tertiary education system,” Ryan said.

Read more

A disease from the history books has become a threat in modern Australia

Ryan’s bill has been introduced into the House of Representatives and backed by fellow teals and independents David Pocock, Zali Steggall, Helen Haines and Kate Chaney.

It comes on the same day Universities Australia released a report that found students are facing a “double squeeze” as the cost of being a student increases by 29 per cent and student spending increases by 21 per cent.

“Students are already cutting back simply to make ends meet. They shouldn’t also be carrying some of the highest university fees in Australia’s history,” Universities Australia chief executive Luke Sheehy said.

The federal government in May 2024 adjusted the HECS indexation rate to be calculated at whichever figure is lower – the inflation rate or the wage price index.

It has also reduced the total student debt for the nearly three million people with a HECS debt by 20 per cent.

Education Minister Jason Clare has previously said he will focus on cutting the length of a degree for students who have a TAFE qualification in the same area.