We said we'd do it, and we've done it. Today the Albanese government has passed through this House a bill to reduce student debt by 20 per cent. On average, that's a $5½ thousand reduction for all those with a student loan debt. The Albanese government has done this because we believe that one of the keys to a bright future is a good and fair education, and getting that education shouldn't mean a lifetime of debt. I know this principle is close to the heart of our education minister. I would like to acknowledge his passion and commitment to reducing barriers to educational achievement and his unwavering commitment to enabling this reform.
We want everyone to have opportunity regardless of their financial circumstances. We want to reduce the barriers for people with a student loan to buy their first home, start a family or transition to a new career, and that's what this bill does. As promised, it cuts the student debt of three million Australians by 20 per cent. Overall, it will cut all student debt by over $16 billion. In my electorate of Corangamite, this means a lot, with almost 18,000 people about to have their student loan debt cut. That's significant, particularly when we know the average HELP debt today is about $28,000. Most of the people with this debt are young Australians, just out of uni or TAFE, just getting started trying to save to buy a home and thinking about starting a family—teachers, tradies, nurses, doctors and paramedics, engineers, architects, IT workers and AI experts. These are the Australians who will build Australia's future—who are already building it—and this will take a weight off their backs. When this legislation passes, their debt will be cut by 20 per cent based on what it was on 1 June this year, before this year's indexation occurred. This will ensure graduates get the maximum financial benefit and that we honour our promise in full, and it will happen automatically. The Australian Taxation Office will process the changes and, when their work is done, Australians with student debt will receive a text—a text worth celebrating. That's real cost-of-living help.
What this means is more money in your pocket—in the pockets of students who have debt, not the government's. It means less pressure on graduates, because we have increased the repayment threshold from around $54,000 to $67,000. This is an important structural reform. We're replacing the current repayment system with a new marginal repayment system. It'll mean you start paying off your university degree when university starts to pay off for you. For someone earning $70,000, it will reduce the minimum repayments they have to make by $1,300 a year, and, rather than loan repayments being calculated based on the percentage of someone's repayment income, a new marginal system that kicks in at a threshold of about $67,000 will be introduced. By making these adjustments to repayment rates and thresholds, the government is ensuring that more people have more money in their take-home pay right now by smoothing out the time and pace at which debt is repaid.
It should be noted that this is a recommendation of the Universities Accord. The architect of HECS, Professor Bruce Chapman, said:
That is the most important thing that's happened to the system in 35 years. It's a marginal collection, it's much gentler and much fairer than previously—we should have done it years ago.
And, when our prime minister first announced the proposal, he said the following:
It will help everyone repaying a student debt right now—and it delivers a better deal for every student in the years ahead.
Permanent structural reform to boost take home pay for young Australians.
This is about putting money into your pocket and putting intergenerational equity back into the system.
It's good for cost of living.
Good for this generation—and for generations to come.
Ensuring all Australians can thrive is at the heart of this reform, and it builds on work we've done to empower teaching and nursing students with paid prac. It also builds on our work to strengthen TAFE. Free TAFE is changing lives, and it's delivering new opportunities for people transitioning to a new job or starting a new career. Every day, more Australians are enrolling in free TAFE courses, and, every day, more Australians are completing much-needed qualifications. Data from states and territories shows that, from January 2023 to March this year, there were more than 170,000 courses completed. It also found there were more than 650,000 free TAFE enrolments in the same period.
Free TAFE is opening doors to new careers and giving Australians the chance to find secure, well-paid work that they're passionate about. At the heart of our free TAFE agenda is our commitment to helping more Australians get ahead. As part of that agenda, we're continuing our work to take cost-of-living pressures off people right across the nation, from two rounds of tax cuts to significant investments in Medicare, expanding the Paid Parental Leave scheme to 26 weeks with super on top and so much more. The Albanese government is progressing reforms that help people get ahead, start a family, enter the property market and embrace the opportunities our nation has on offer.
Our government is committed to building a world-class education system, providing opportunities and pathways for all young Australians. Education is empowerment. I saw it myself as a teacher in the past. Decent schools mean that a child who comes from the most disadvantaged circumstances can succeed in life with the right support, and those young Australians coming out of school deserve the opportunity to go to university or TAFE without being held back by the fear of financial burden. That's why this bill is so important and why I urge those opposite to accept what the Australian people voted for on 3 May. They voted for student debt reduction. They voted for it because it does not reek of elitism. They voted for it because it's fair. That's what thousands of local people told me in the pre-poll line and on 3 May. They said reducing student debt is the right thing to do. They said investing in Medicare and establishing more urgent care clinics is the right thing to do. They said Australians want a government that's focused on building a future and that listens to them and responds to their needs, and they said Australians want a government that' is focussed on their futures. That's what Australians voted for and that's what the Albanese Labor government will continue to deliver. We'll continue to back in Australians to provide help with the cost of living and to ensure more people get ahead. That's why this bill is the first piece of legislation that we introduced in this new term of parliament.
In closing, education allows students to grow and flourish as people and as Australians, and it gives them hope for the future. Education is an investment. It is never wasted, and that's what the bill represents. To all Australians with a student debt and to the 18,000 who have student debt in my electorate of Corangamite: you will soon receive a text from the ATO. It will be good news. It will cut your HECS debt, and please know that it is your Labor government that has enabled this reform, because we do not want financial burden to be a barrier to grasping the opportunities that come with a tertiary qualification.
