The Federal Government’s Budget for the coming financial year was made public to the nation last night. Although few students were present in the room to receive it, this budget features multiple changes to policy that will directly affect the lives of Australian students and young people. But how? Is this budget to be feared, reviled or welcomed? We invited four student pundits to tell us what to expect from the changes on our horizon.
Getting Less For More
Robyn Lewis, ANUSA Education Officer 2017
The 2017 – 18 budget is one that seeks to divide and pit parts of society against each other. Those who need government services are being forced to compete with the next generation, homeowners and businesses. With this sort of framing, Scott Morrison has once again demonstrated his commitment to helping big business and those already well off, while leaving average people, not to mention the most vulnerable, behind.
It doesn’t have to be this way. It is the role of government to look after and protect all its citizens, as well as the future of the country. In a wealthy country like Australia, that’s not a lofty aspiration but a very achievable goal … if the government wanted to do so. We could fund healthcare, welfare and education properly. This, however, was far from what the Treasurer announced last night.
So what does this budget mean for university students? Simply that we will be paying more for less. The efficiency dividend is a 2.5 per cent cut that will almost certainly be taken straight out of teaching. This means less staff, and more casualisation with fewer hours paid to those teaching. For students, this means that you’re going to have academics who care less about your subject, are overworked, and who are not paid enough to be able to mark your work in a considered fashion, to respond to your emails or go beyond the lectures to enhance your learning. It also means we are likely to see more courses culled – ANU has already seen deep cuts to music and the humanities, and this budget means more are likely to follow.
The increase in course fees by 7.5 per cent means, if you’re a domestic student, your degree could end up costing up to $75,000. This is a stepping stone to deregulation and will increase the amount you’re paying by thousands of dollars, for a degree with fewer options and worse teaching quality. A Guardian poll this week showed that around half of Australians oppose tuition fees whatsoever, and certainly higher education in other countries is moving increasingly towards lower fees for students. It seems bizarre that policy in Australia is regressing when we could fund universities and invest in the future of the country properly if we simply, I don’t know, made corporations pay proper tax.
So what will you do after you’ve paid more for a degree that has a lower quality? Well, you’re going to have to start paying back your HECS a lot sooner. You will now have to start paying back your debt once you earn $42,000 a year, which goes against the very philosophy of HECS, whether you believe in it or not. HECS debt is intended to allow you only to begin repaying your fees when you have started to gain some of the value of your degree. $42,000 is not far above the minimum wage, meaning graduates will not have realised any of the value of their degree in higher earnings whatsoever, and will be paying off a degree that has not benefitted them in the job market yet.
Ultimately, these measures come on the heels of the Government having to drop the zombie-cuts from 2014 that were never going to pass the Senate, including the flagship fee deregulation measure. Morrison has tried to sell a more palatable package to the Australian public, but this budget is still terrible for students, terrible for young people, and once again, it’s time to fight back.
ANUSA in conjunction with the NUS will be holding a National Day of Action in Union Court at 12.30pm on Wednesday, 17 May.
A Good Budget for Students Begs the Question: At What Point is Fair Unaffordable?
Robert Bower is a member of the Liberal Party
Whilst complaints are inevitable, the Budget handed down last night was good for students, and good for the future of Australia. The government is set to return the budget to surplus: they are on track to ensure that from the 2018 – 19 financial year, all government spending will be funded by government revenue. At the same time, the government has taken steps to ensure that this has not come at a cost of equity, taking measured but achievable steps to act on youth unemployment, housing affordability, health care, and the intergenerational debt bomb. It begs the question, what more can be realistically expected under the current policy settings? This is a good budget for students and young people: the government is securing tax relief for small to medium business, which will free up budgets to invest in new capital and employ staff for more hours. This is matched by increased funding for 300,000 VET and apprenticeship places, which, along with the PaTH program from last year’s Budget, should go a long way to upskilling young people and addressing youth unemployment levels. Medicare funding is to be enshrined in legislation, only to be spent on Medicare and the National Disability Insurance Scheme (NDIS). The eternal question of the NDIS funding has been solved by a modest increase to the Medicare levy. The Future Fund has similarly been legislatively secured from being pillaged for pork barrelling. Attractive super schemes for first home buyers and retirees will make it easier to save for a deposit, and increase housing stock. Infrastructure spending will ensure the benefits of Australia’s economic growth are shared broadly across the country. Yes, university fees will go up. Yet the Cro-Magnon bleatings of the NUS and Labor will not change the fact that the proposed changes are modest. The increase is a small percentage of the overall cost of a degree and comes at no additional up-front cost. If that weren’t enough, the lower repayment threshold is accompanied by a lower repayment rate. Since the uncapping of university places in 2010, universities have seen enrolment skyrocket by as much as 68 per cent. Yet the funding mechanism has stayed the same, meaning education costs to the taxpayer are skyrocketing alongside enrolments. There are finite tax receipts to go around, yet the Left would have us believe that the funding mechanism for university can stay the same with no impact to other services. This is a too-cute line that readers should treat with scepticism. No policy occurs in a vacuum and cries for more funding ignore the reality. As a Liberal supporter, I can say many of us see the reliance on increased taxes to maintain extensive social spending is less than ideal. As the US and the UK are seeking to reduce taxes, Australia is increasing an already high tax burden: should all the budget measures pass, Australia will be taxing the highest and spending the biggest it has in 10 years. At the same time Australian national debt has passed $500 billion for the first time in history. Household debt has reached 180 per cent of household income, leaving the economy highly shock prone. Despite opposition to budget savings across the past four years, by 2064, the debt burden of each Australian tax payer is still projected to be $64,000 per person. Is that fair? Modest pain now to save future generations being in hock to international lending agencies? For those who want more, where do they expect the money to come from? Where does it end? Internationally imposed austerity will be less obliging than Coalition governments.
No Surprises from a Liberal Budget
Katrina Millner, ACT Greens
A $3.8 billion cut to funding for universities is the key take away for students from this budget. The second affront to students comes in the Government’s failure to deal with housing and rent affordability. While there is no funding to target climate change – one of the biggest challenges to young people’s future wellbeing and cost of living – somehow there is still money to fund fracking. The budget announced on Tuesday night presented a rather poor future for students, but are we really surprised?
In a world where the cost of living is already high, and the cost of housing is even higher, the proposed changes to HECS will further burden students’ lives. Although we will not be hit with these costs up front, in the long run we are worse off. Our student debts will be higher and we will be paying them off earlier. The ABC recently published a detailed cost analysis of how these HECS changes will affect us. At an annual income of $42,000, we will be required to begin to repay our HECS debts. Calculating necessary deductions of tax, the Medicare levy and your HECS contribution, we are left with an income of $683 a week. To many students, this may still seem like a more than adequate income – but it quickly dwindles when the needs to pay rent, save for a house, and support a partner or young family are taken into consideration.
Furthermore, the Government’s so-called solution to housing affordability is a joke. Their plan is to allow people to save money through their superannuation funds, therefore lessening tax on those savings. While this is a welcome measure to help students save for a deposit, it goes no way to targeting the problem. Once again the Liberal government has refused to target negative gearing and capital gains taxes, and ignores the impact they have on housing and rent affordability in Australia. The cost of studying and renting is already high, and last night’s budget didn’t provide much to help with that.
Education is the key to a successful workforce and is fundamental in breaking cycles of poverty. That is why education is a right, not a privilege. We should be making it cheaper to access, and more affordable to survive whilst you are accessing it. The Government has again failed to recognise the need to support everyone who wishes to further their skills. We cannot leave students behind because of so-called crisis budget deficits, or accept high costs with no returns. Education is the future of the country, and unless we wish to fall behind, we have to make tertiary studies accessible to all. However, last night was an example of Liberals balancing their budget on the backs of students.
Climate change is another topic high on many young people’s priorities, given its devastating potential to alter our futures. But who needs to fund that anyway? It didn’t even rate a mention in this Budget, though given our sitting Liberal government that isn’t shocking. We all want a future we can live in, and that’s not what was given to us in this year’s Budget.
In a society where it is getting more and more expensive for students to survive, this Budget doesn’t give us high hopes, but I’m not surprised.
Stand up, Fight Back
Freya Willis, ANU Labor Left
Another year, another set of cuts to the higher education sector. This has become the new normal under the Liberal government. Under this year’s Budget, students will be paying more back, sooner and for less.
The HECS debt repayment threshold has been lowered to $42,000. That is nearly half of the median household income and only $8,000 more than the annual salary of someone working on the minimum wage. The student contribution is planned to increase by, on average, $3,600.
There is a clear message being sent here: The Liberals do not value education. They are increasingly pushing the cost of university back onto students. These changes to the HECS system form a slippery slope. How poor is too poor to have to pay back your HECS debt? Continual cuts – no matter how small the government claims they are – places more financial stress on lower earning graduates, and discourages students from pursuing tertiary education in the first place.
This policy is extremely short-sighted. It ignores the fact that the higher education, and a skilled and educated workforce, is the key to growing the economy, to innovation and to productivity.
This attack on students cannot be looked at in isolation either. It comes on the back of cuts to penalty rates, as well as systemic problems with Centrelink and fake debt notices. All of which make it harder for students to pay their way through university and cause massive financial stress.
And while students are paying more, the government are paying less.
They have proposed a two – three per cent ‘efficiency dividend’, let’s cut the bullshit – an efficiency divided is another word for a funding cut. What is unclear, however, is where exactly these ‘efficiency’ savings can be made. Is it by transferring more teaching online? It is by cutting student services? Is it by cutting courses like we have already seen happen in ANU’s School of Culture, History and Language? Is it moving to the trimester system, a change which has already occurred at many other Universities?
The government’s justification for this is that, via a combination of fees and government funding, universities already have enough money to cover the cost of teaching for most degrees, plus a little bit extra. But if university funding only covers operational costs, then innovation stagnates, student services can’t grow their capacity as student numbers increase, class sizes continue to get larger and infrastructure redevelopment is limited. The quality of our universities, and their global competitiveness, is compromised.
Next, they tell us that this is just a temporary measure, a necessary evil while the budget is pinched. Interestingly, the Liberals seem to have found room in the budget for a $50bn corporate tax cut. They seem to have found room to repeal the deficit levy, giving more money back to those who earn over $180,000 per annum.
So yes, the Budget is tight. But only if you are a student.