HECS/HELP debts incurred before 2014 to suffer interest after 2020 - fair?

[DivideandMultiply]

the evidence is in this thread.......

Oh spare me the deranged rant, that ignores everything from economic fundamentals, to best practice examples of how to engineer a competitive and effective higher education system.

The only counter you have provided is is disjointed nonsense about people supposedly taking the system for a ride, which couldn't be further from the reality. We don't need kids ending up with 100k fees, unable to service the interest, or under the threshold ending up being crippled by ballooning debts, or those who can pay, going off shore to better unis at lower cost. Likewise, even more who can't afford it avoiding education and post grad students or researches fleeing the country in droves.

In fact if this back and forth has taught me anything, it is that you are an unrepentant idiot, who isn't really capable of discussing the issues in a meaningful or cogent way. Stick to the comments section of the H S, or daily tele, it suits you better.

 

[Scotland]

What would you do, DivideandMultiply?

 

[DivideandMultiply]

What would you do, DivideandMultiply?

Explained it already, more than once.

Little needs to be done. There is no HECS emergency and no great drain from education on the budget. Don't deregulate fees, don't cut subsidies, don't cut research funding, don't increase interest. We can fund higher ed better now, but choose not to.

My preference would be close corporate loopholes for tax avoidance and give the ATO the means to pursue big time tax avoiding citizens. That alone would clear up any shortfall.

If not, the areas we can make cuts have been well outlined. Cutting super concessions, CGT benefits, and negative gearing, (that's ignoring family tax benefits, first homebuyers and fuel subsidies) would also greatly reduce the deficit. Oh and no PPL.

If we want to fix supply side issues, tax estates and property properly. This will also allow cuts in other areas, like payroll tax. Remove Howard era cuts to high income earners, we are already one of the lowest taxing nations on income in the OECD. Leaving the mining tax would also help revenue, and if the Carbon tax removal is going to cost us, then leave it in place. Not preferable but it is infinitely better than the corresponding budget hole, plus direct action.

I have seen a few lists like this

fossil fuel subsidies: $12 billion (ACF) to $13.4 billion
superannuation tax concessions $30 billion in FY12
negative gearing and capital gains tax discounts 6.8 billion
imputed rent exemptions ~$9.6 billion in FY12
negative gearing for investors ($6.4 billion).
First Home Vendors Grants over $1 billion
private education $9 billion ($36 billion over 09-13)
Private Health Insurance Rebate $5 billion ($2 billion at commencement in 1999)

and http://www.theguardian.com/commenti...alias-finances-without-cuts#start-of-comments


I am not saying I agree with all points, or all figures, but what it shows is that if you really want to make cuts to middleclass/corporate welfare, there is a lot of wriggle room.

Still, there is no budget emergency, we have low proportional debt and a highly targeted welfare system, with low income taxes for an OECD country and under spend on education. Any structural issues are supply side issues that are easily fixed. Our real problems are the housing bubble, which is causing mayhem be that higher wages and costs for business, incentivising the banks strangling capital flows to business, hurting innovation and diversity, plus effecting competitiveness internationally. The answers to fix this are simple and are mentioned above, though you could also chuck in deregulating the loans market to greater competition, they will also save billions.

In the end, we are losing ground to our Asian competitors on the higher ed front. Low funding, cuts to research bodies with a high level of efficiency that are a huge value add and proven track record, cuts to overall funding and scrapping beneficial industry related programs many of which are revenue neutral or positive (makes no sense), all seem dangerously incompetent. If we can't compete with our neighbors via product, then one of the largest sectors of our economy tanks. If we can't fund our researchers, then we lose massive amounts of IP offshore, likewise the human capital, in a country where the public sector is responsible for the vast majority of all new IP generated and whose businesses are already notoriously poor innovators. It is bordering on doom and gloom stuff, especially in the medium to long term and makes me consider the current government truly dangerous or at least dangerously incompetent. It isn't even in keeping ideologically, or behaviorally, with the coalitions template (the USA) who generously fund higher ed, both publicly and through industry, likewise provide for a high degree of industry and government run research body cooperation with unis.

It is probably one of the best examples I can give of bad policy. It ticks all of the boxes be that short term thinking, harmful to the target sector, ideologically driven but not in a cogent way and ultimately very costly to the wider economy . However, as long as we have potatoes like PR squealing with glee and shouting about getting dem der uni bludgers, the coalition will behave like it has a winner. There is a very good reason no developed country has ever adopted such a funding model.

 

[Power Raid]

Explained it already, more than once.

Little needs to be done. There is no HECS emergency and no great drain from education on the budget. Don't deregulate fees, don't cut subsidies, don't cut research funding, don't increase interest. We can fund higher ed better now, but choose not to.

My preference would be close corporate loopholes for tax avoidance and give the ATO the means to pursue big time tax avoiding citizens. That alone would clear up any shortfall.

If not, the areas we can make cuts have been well outlined. Cutting super concessions, CGT benefits, and negative gearing, (that's ignoring family tax benefits, first homebuyers and fuel subsidies) would also greatly reduce the deficit. Oh and no PPL.

If we want to fix supply side issues, tax estates and property properly. This will also allow cuts in other areas, like payroll tax. Remove Howard era cuts to high income earners, we are already one of the lowest taxing nations on income in the OECD. Leaving the mining tax would also help revenue, and if the Carbon tax removal is going to cost us, then leave it in place. Not preferable but it is infinitely better than the corresponding budget hole, plus direct action.

I have seen a few lists like this

fossil fuel subsidies: $12 billion (ACF) to $13.4 billion
superannuation tax concessions $30 billion in FY12
negative gearing and capital gains tax discounts 6.8 billion
imputed rent exemptions ~$9.6 billion in FY12
negative gearing for investors ($6.4 billion).
First Home Vendors Grants over $1 billion
private education $9 billion ($36 billion over 09-13)
Private Health Insurance Rebate $5 billion ($2 billion at commencement in 1999)

and http://www.theguardian.com/commenti...alias-finances-without-cuts#start-of-comments


I am not saying I agree with all points, or all figures, but what it shows is that if you really want to make cuts to middleclass/corporate welfare, there is a lot of wriggle room.

Still, there is no budget emergency, we have low proportional debt and a highly targeted welfare system, with low income taxes for an OECD country and under spend on education. Any structural issues are supply side issues that are easily fixed. Our real problems are the housing bubble, which is causing mayhem be that higher wages and costs for business, incentivising the banks strangling capital flows to business, hurting innovation and diversity, plus effecting competitiveness internationally. The answers to fix this are simple and are mentioned above, though you could also chuck in deregulating the loans market to greater competition, they will also save billions.

In the end, we are losing ground to our Asian competitors on the higher ed front. Low funding, cuts to research bodies with a high level of efficiency that are a huge value add and proven track record, cuts to overall funding and scrapping beneficial industry related programs many of which are revenue neutral or positive (makes no sense), all seem dangerously incompetent. If we can't compete with our neighbors via product, then one of the largest sectors of our economy tanks. If we can't fund our researchers, then we lose massive amounts of IP offshore, likewise the human capital, in a country where the public sector is responsible for the vast majority of all new IP generated and whose businesses are already notoriously poor innovators. It is bordering on doom and gloom stuff, especially in the medium to long term and makes me consider the current government truly dangerous or at least dangerously incompetent. It isn't even in keeping ideologically, or behaviorally, with the coalitions template (the USA) who generously fund higher ed, both publicly and through industry, likewise provide for a high degree of industry and government run research body cooperation with unis.

It is probably one of the best examples I can give of bad policy. It ticks all of the boxes be that short term thinking, harmful to the target sector, ideologically driven but not in a cogent way and ultimately very costly to the wider economy . However, as long as we have potatoes like PR squealing with glee and shouting about getting dem der uni bludgers, the coalition will behave like it has a winner. There is a very good reason no developed country has ever adopted such a funding model.

I agree, all those items you listed need to be addressed.

but they are separate issue.

I can't understand why you don't accept our most privileged kids who get a privileged education shouldn't pay. Clearly they don't deserve the education, if they don't value it.

Sounds like you have a vested interest here.

 

[DivideandMultiply]

Sounds like you have a vested interest here.

I will have 6% added to my debt and I will pay it. Even if I go offshore I will make contributions.

My issue is less a personal one in a short term sense and more a grave concern for the damage this will do the industry and ultimately economy. No one has tried a low funding, industry and government divested, high user pays model before. I doubt anyone will again. It's disaster stuff.

 

[The Speaker]

I can't understand why you don't accept our most privileged kids who get a privileged education shouldn't pay.

They do pay, and many of them aren't that privileged beyond being able to go to university in a country that is relatively well off with a good standard of education.

I can't understand why you seem to think university students are either driven towards their goal of being money makers for themselves and their country OR being bludging bludgers who bludge and just want to live the good life.

 

[Power Raid]

They do pay, and many of them aren't that privileged beyond being able to go to university in a country that is relatively well off with a good standard of education.

I can't understand why you seem to think university students are either driven towards their goal of being money makers for themselves and their country OR being bludging bludgers who bludge and just want to live the good life.

university education is a privilege which has been subsidised by society including tradesman, disabled and even people with mental health and single mums. Why should they have to foot the bill?

In regards to bludgers; I don't think university students are bludgers but I do think someone who doesn't want to pay commercial rates for their privileged education which results in higher wages, or can't accept commercial interest rates is a is the type of person who probably doesn't deserve the privilege.

 

[Scotland]

I will have 6% added to my debt and I will pay it.

Indexation to govt bonds will in effect add 2-3%, not the full 6%.

 

[DivideandMultiply]

Indexation to govt bonds will in effect add 2-3%, not the full 6%.

Then I will pay the 2-3%.

Personally, as I stated, I believe this is the initial phase leading towards privatisation of HECS debt. It's about making the debt attractive to investors.

 

[Scotland]

university education is a privilege which has been subsidised by society including tradesman, disabled and even people with mental health and single mums. Why should they have to foot the bill?

I think you're confusing 'subsidised by' with 'at the (potential) expense of'.

Semantics, I know.

 

[Scotland]

Then I will pay the 2-3%.

Personally, as I stated, I believe this is the initial phase leading towards privatisation of HECS debt. It's about making the debt attractive to investors.

HECS only covers 20-30% of course fees anyway.

The real cashcow is transferring the remaining 70-80% onto the student.

A 4 year course costing $36k is more like $120k if you're fee-paying. $120k with 6% each year is $139k.

$139k @ 6% a year is $8k+ in interest. Cha. Ching.

 

[DivideandMultiply]

HECS only covers 20-30% of course fees anyway.

The real cashcow is transferring the remaining 70-80% onto the student.

A 4 year course costing $36k is more like $120k if you're fee-paying. $120k with 6% each year is $139k.

$139k @ 6% a year is $8k+ in interest. Cha. Ching.

Which is what is going to be happening, or close to. They are cutting degree subsidies. I read somewhere that the hardest hist will be environmental science degrees (shock horror). Which may rise to 118k+.

Now, unless universities engage in some serious rebranding, this will cover large sections of the hard sciences. We are talking animal and plant genetics, botany, marine biology, ecology, water chemistry and hydrology, atmospheric science, not just the planning and implementation stuff.

It varies from uni to uni, but many majors or units are governed by environmental sciences faculties, with a high proportion of students not being straight science but enviro.

Mix subsidy cuts, fee deregulation and increased interest and you have a dangerous combination. Personally, I think the amount of outstanding HECS will balloon significantly.

 

[Scotland]

I think enrollments will plummet. I'd sure as hell second guess enrolling in environmental science if it was going to cost me $120k.

It's obviously easier for me to say this having already paid off my HECS debt, but it's not in its entirety a bad thing for prospective students to weigh up the cost of the degree they're looking at relative to its perceived benefit prior to enrolling.

Going a bit Power Raid here but I have spoken to people before whose attitude towards uni was 'meh, it's only $20k or so and it's tax free so who cares'.

I'm open to changing the university funding model (not slashing funding!) but I agree it's a slippery slope that appears to be approaching if we're not careful.

 

[Power Raid]

I think you're confusing 'subsidised by' with 'at the (potential) expense of'.

Semantics, I know.

no, I meant the world subsidised as I do a fair bit of work with an organisation for mental health organisation in east perth. Some of these guys work and thus pay taxes between relapses. Of course some of these tax funds go towards subsidising university. How is that fair?

These guys need help and don't need the burden of looking after tomorrow's doctors, lawyers, accountants and engineers.

 

[DivideandMultiply]

I think enrollments will plummet. I'd sure as hell second guess enrolling in environmental science if it was going to cost me $120k.

It's obviously easier for me to say this having already paid off my HECS debt, but it's not in its entirety a bad thing for prospective students to weigh up the cost of the degree they're looking at relative to its perceived benefit prior to enrolling.

Going a bit Power Raid here but I have spoken to people before whose attitude towards uni was 'meh, it's only $20k or so and it's tax free so who cares'.

I'm open to changing the university funding model (not slashing funding!) but I agree it's a slippery slope that appears to be approaching if we're not careful.

Thats the objective.

The problem is, these faculties cover lots of important, relevant or productive areas. Thankfully green chemistry at monash is run by the chemistry department, though a large proportion of students are enviro kids.

More concerning is these cuts are hitting the sciences more broadly pretty hard.

That will have a very negative impact on future prosperity.

 

[DivideandMultiply]

no, I meant the world subsidised as I do a fair bit of work with an organisation for mental health organisation in east perth. Some of these guys work and thus pay taxes between relapses. Of course some of these tax funds go towards subsidising university. How is that fair?

These guys need help and don't need the burden of looking after tomorrow's doctors, lawyers, accountants and engineers.

It's very fair. Many with mental health issues are also students. Better funding including subsidies allows more equitable access for those with disabilities and mental health issues, thus helping them achieve a better quality of life.

It isn't an either or thing. The government has cut mental health and disability funding, cuts to education haven't seen an increase.

You want more money for essential services, cut super concessions.

 

[RUNVS]

Clive has now flipped his support

Clive Palmer's university switch: from deregulation to zero fees within days
http://www.smh.com.au/federal-polit...within-days-20140519-38jyx.html#ixzz329LyxF8n

Now Mr Palmer has now shifted his position and says he will not support any policy that leads to increased university fees.

“Universities should be able to charge whatever they want to international students but there should be no HECS for Australian students,” he said on Monday.

“The government should set people free so they can help the country and not need to work in boring jobs because of their debt.”

Asked about his negotiations with Mr Pyne, Mr Palmer said: “He almost convinced me on some things but now I realise what he was on about I don't agree with him.”

http://www.smh.com.au/federal-polit...within-days-20140519-38jyx.html#ixzz329LyxF8n

 

[Power Raid]

It's very fair. Many with mental health issues are also students. Better funding including subsidies allows more equitable access for those with disabilities and mental health issues, thus helping them achieve a better quality of life.

It isn't an either or thing. The government has cut mental health and disability funding, cuts to education haven't seen an increase.

You want more money for essential services, cut super concessions.

agree.....and better still

get rid of super and just force people to save to good old fashion way

oh and it is a an either thing. resources need to be allocated to the most needy not the privileged.

 

[DivideandMultiply]

agree.....and better still

get rid of super and just force people to save to good old fashion way

oh and it is a an either thing. resources need to be allocated to the most needy not the privileged.

Education equity counts. No it isn't an either or. We are not choosing between the two, as the current government is cutting both.

Education can easily be adequately funded and so can disability support and mental health services

 

[Power Raid]

Education equity counts. No it isn't an either or. We are not choosing between the two, as the current government is cutting both.

Education can easily be adequately funded and so can disability support and mental health services

yep

it is a bottomless bucket where free sh!t just magically appears

 

[DivideandMultiply]

yep

it is a bottomless bucket where free sh!t just magically appears

Silly response.

The budget situation and how it can be managed has been gone over in depth.

 

[ClokesShankedIt]

In regards to bludgers; I don't think university students are bludgers but I do think someone who doesn't want to pay commercial rates for their privileged education which results in higher wages, or can't accept commercial interest rates is a is the type of person who probably doesn't deserve the privilege.

What sort of addled brained thinking is this? If someone takes on a HECS debt for, say 40k, then pays back 40k plus the 2% - what is the problem?

The government isn't a bank relying on interest income to turn a profit on funding a student's education. Paying the cost of the education back plus change is sufficient.

 

[Scotland]

Time value of money - which is why it was indexed to inflation in the first place.

 

[Power Raid]

What sort of addled brained thinking is this? If someone takes on a HECS debt for, say 40k, then pays back 40k plus the 2% - what is the problem?

The government isn't a bank relying on interest income to turn a profit on funding a student's education. Paying the cost of the education back plus change is sufficient.

$26B in current HECS and HELP debt (last record date 18 moths ago) is ridiculous to have on the governments balance sheet when it could be reallocated to the most needy in society

adding to that there is a failure rate of around 20% in repaying the debt meaning $6B will never be seen again

so who should wear that cost? ordinary workers who didn't go to uni, the disabled, the mentally ill, pensioners? may be those who were privileged enough to go to uni.

 

[greennick]

Johhny, living in Cottelsoe, with his surgeon father and laywer mother, dips into daddy's wallet and shells out the 20-100k for his degree.

Old mate in kwinana with parents on 60k between them gets a nice loan at up to 6%.

Awesome

Isn't this just life? People with rich parents are more likely to get s**t from their parents.

Johhny, living in Cottelsoe, with his surgeon father and laywer mother, dips into daddy's wallet and shells out the 50k for his new car

Old mate in kwinana with parents on 60k between them gets a nice loan at up to 16% for a 5k bomb.

Why should education be free? If we accept that good unis need more money, how do we get that money to them? How do we create a tiered funding system, with unis with different capabilities for different students?? Why should that old mate in Kwinana have to pay taxes for Johnny to go to uni, while his son drops out of school in year 10 and works as a forklift driver??

The boy from Kwinana can still go to uni, he just ends up with a loan, which presumably will be paid back once he gets a job at the end of the degree. This is no different from now. If cost is a massive issue to him, then he can go to ECU or one of the other unis that will not be able to charge 50k+ for a degree.