Higher Education Support Amendment (Fix HECS) Bill 2026

Ms STEGGALL (Warringah) (10:27): I second the motion. Imagine you're a new graduate with a $30,000 HELP debt. Over the year, about $3,000 is taken from your wages to repay it.

But when 1 June comes around, the day that HECS is indexed under current law, that repayment of $3,000 has not been applied to your debt. Indexation is charged on the full $30,000, not the $27,000 that you actually owe. Meanwhile, that $3,000 that has been withheld from your wages is held by the ATO, but no interest is applied.

That is the level of unfairness of the current system. At three per cent of indexation on that $3,000, graduates are charged an extra $90 extra of debt. Across the population of Australian students in the tertiary system, the Parliamentary Budget Office estimates that additional indexation paid will amount to about $3.2 billion over the decade.

I wonder why it is that governments of both persuasion, coalition and Labor, have refused to do anything about it. This is ultimately a sneaky student tax. The member for Kooyong's bill, Higher Education Support Amendment (Fix HECS) Bill 2026, will fix this.

Indexation is intended to keep the value of HECS debt in line with rising prices. But indexation, whilst not technically an interest, has, for someone with a HECS debt, the practical effect of essentially being an interest payment. Their debt goes up, and the problem is the system can increase their debt before counting the repayments already taken from their wages.

I regularly hear from students and young graduates across Warringah who are worried about their financial security and the amount of debt they are taking on. They are managing high rents, grocery bills, transport costs and insecure work. They are training and getting those qualifications to build the kind of Australia we want and need for the future, but how are we saying, 'Thank you,' to them?

We're just socking them with a sneaky additional student debt tax. Now they're asking how they're going to save for a home or build financial security while they begin their working lives with tens of thousands of dollars in student debt. They understand that they must repay what they have borrowed, but they rightly expect the system to recognise the repayments they have already made.

Why is it okay for the ATO to sit on repayments made without even applying any interest to that or applying it to the debt? Every mortgage holder in Australia, imagine if a bank charged interest on money that you had already repaid. There would be outrage.

Yet that is effectively what the government is doing under the current HELP indexation system. This bill will move the indexation date from 1 June to 1 November. This gives the tax system time to count for the repayments already made from people's wages and for people to lodge their tax returns.

With repayments deducted first from the debt, indexation would then be applied only to the debt that remains. This bill does not wipe student debts. It does not remove indexation.

It simply moves the date so that indexation is calculated fairly. Without this change, graduates will continue to be charged indexation on amounts that have already been withheld from their pay. Young Australians should only be charged indexation on the debt they actually still owe.

That is fair. That is logical and how the system should already work. It is staggering that the government can seriously still be here refusing to make this change.

This should be multipartisan. No-one should be debating that this is a change that should be done out of fairness. I commend the member for Kooyong for bringing forward this sensible reform.

I urge the parliament and the Albanese government to support it. You cannot, with any credibility, talk about intergenerational inequity or a system that is fair where you're encouraging Australians to build a better future and not change this aspect of indexation and the timing. None of us in this place would accept it on any kind of debt repayment if it were for mortgages or anything else.

It is unacceptable that it continues to be the case for student debts and HECS-HELP. I commend this bill to the House, and I urge everybody to be fair to graduates and change this date. The DEPUTY SPEAKER ( Mr Buchholz ): The time allocated for the debate has expired.

The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.