Federal government defends waiting until after election to table $16b HECS debt wipe

The Albanese government has defended plans to wait until after they are re-elected at this year’s federal election before wiping about $16bn in student debt.

The Prime Minister announced late last year plans to slash all student loan debt by 20 per cent by June 1, 2025, impacting about three million Australians.

The plan would see the average HELP debt of $27,000 reduced by about $5520, but will not be introduced until a new parliament is sworn in this year.

Education Minister Jason Clare defended the decision to wait until after the election, despite claims it could give students certainty if introduced earlier.

“We’ve made it very clear when the Prime Minister announced this policy late last year that this is a policy we would take to the next election,” he said.

“We’ve made it clear to three million Aussies right across the country that have got a HECS debt that if Labor wins the next election, we will cut your debt by 20 per cent.

“This will make a big difference to three million Aussies right across the country.”

Mr Clare said the Liberal Party was opposed to the plan, which Opposition Leader Peter Dutton last year labelled a “card trick” to win back popularity.

National leader David Littleproud also slammed the move as a desperate giveaway and “profoundly unfair policy”, as it affected only some Australians.

“So, if the Liberals win the next Election, this will never happen,” Mr Clare said on Saturday.

“We’re making it very clear here today, if Labor wins the next election, we’ll cut your student debt by 20 per cent.”

Under the plan, some $16bn in debt would be wiped off student loans, including HELP, VET Student Loan, and the Australian Apprenticeship Support Loan.

Government modelling reveals NSW’s 883.801 student loan holders would benefit the most, with $5bn in debt wiped at an average of $5701 per cent.

Victoria’s 805,264 student loan holders and Queensland’s 607,623 will benefit marginally less, with average cuts of $5755 and $5357 respectively.

Tasmanians would receive the least back per-loan holder at $4561, while the least total debt will be wiped from the Northern Territory at $82m.

It comes after the Albanese government passed legislation late last year to wipe a further $3bn after “fixing” the way indexation is calculated.

The bill capped the HELP indexation rate to the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI) after a 7.1 per cent spike last year.