Tuesday, October 30, 2012

Ending Student Fees and Charges at the University and TAFE Level

In calling for the abolition of the Baby Bonus and a grandfathering of the payment of Family Tax Benefit for those who have more than two children I am arguing that it would be more beneficial to use the money to help abolish student fees and charges at both the university and TAFE level.

The theory behind HECS at the time of its introduction was that it would generate money for more tertiary places and that it was reasonable for people who had profited from their higher education to put something back. Whatever the merits of the theory, in practice it has not worked out that way. The Howard Government essentially flat-lined the number of Commonwealth subsidised University places for domestic students between 1996-2007.

Furthermore it substantially reduced the income threshold at which HECS cuts in, so that instead of it being about affluent professionals giving something back, it has become a burden for quite modest income earners, and a yoke around the necks of young students. Nor was this about the Government switching resources from tertiary education to trades training. Between 1997 and 2006 the Commonwealth contribution to vocational education and training costs declined by over 20%.

The total cost of abolishing student fees and charges in both tertiary and vocational education is roughly $3.3 billion. We could find this money by abolishing the Baby Bonus, by abolishing the 38 cents per litre fuel tax credit for the mining industry, which would save around $2 billion each year, and by grandfathering Family Tax Benefit A for third and subsequent children, and the Large Family Supplement. The Henry Tax Review stated that the case for the Baby Bonus and Large Family Supplement is not strong.

I don’t think it’s appropriate for taxpayers to fund students indefinitely. But if we’re serious about building skills and being more than a mining boom one trick pony, we should pay for everyone’s first three or four post-secondary education years, so everyone with the capacity gets the opportunity to get a degree or other post-secondary qualification under their belt.

As money comes in from phasing out the Large Family Supplement and Family Tax Benefit A for third and subsequent children, I think we should consider forgiving some of the HECS debt that our present generation of young people have been saddled with. I think that we could treat them better than we have done.


  1. Brilliant! http://www.thepauk.com/2012/10/ok-on-my-first-day.html

  2. What a sensible idea.

    I recall a rueful comment made by a teacher friend a couple of years after big-daddy Peter Costello brought in the baby bonus: "School girls are opting to drop out and to get pregnant in order to pick up a baby bonus so their boyfriends could buy fancy TV's and videos."