ºÚÁÏÀÏ˾»ú Chief Executive Officer Luke SheehyÌý
The Albanese government has put intergenerational fairness at the centre of its economic agenda, and rightly so. Younger Australians are paying more for housing, waiting longer to buy a home and carrying larger education debts before getting established.Ìý
That’s why Labor’s $16 billion student debt cut proved so popular at the last election. It offered tangible relief and showed the government understood the pressures facing younger generations.Ìý
But it also exposed a contradiction the government can no longer avoid: Labor is cutting yesterday’s student debt while leaving in place the policy that will create more of it. The Job-ready Graduates package has failed on its own terms but survived because reform has been put in the too-hard and too-expensive basket.Ìý
JRG was introduced to change student behaviour. By making some degrees cheaper and others more expensive, its architects believed students would shift into areas of workforce shortage. It was economic theory with little regard for how people make life-changing decisions.Ìý
Students didn’t choose nursing, teaching or engineering simply because fees were lower. Nor did they abandon law, business, communications or the humanities because fees were higher. They kept choosing courses based on their interests, abilities and ambitions.Ìý
The price signal barely moved preferences. What it did move was debt. Students in some fields now pay almost four times as much as others. A three-year degree can cost more than $52,000 before a graduate has earned their first full-time pay cheque.Ìý
That’s JRG’s clearest legacy. It didn’t solve skills shortages or redirect enrolments. It shifted more of the cost of higher education onto students.Ìý
Labor knows this. It opposed the package in opposition and regularly criticises it in office, but JRG remains in place. That’s hard to reconcile with a government that says productivity and a fairer deal for younger Australians are central to its economic agenda.Ìý
The productivity case for reform is especially strong. Australia needs a larger, more adaptable skilled workforce at a time when artificial intelligence, demographic change and the energy transition are reshaping industries faster than governments can reliably predict. Yet JRG assumes Canberra can decide which disciplines will matter most and charge students accordingly. It’s a static policy for a dynamic economy.Ìý
Australia needs more nurses, engineers, teachers and scientists. But it also needs economists, lawyers, managers, designers and people who understand institutions, markets and human behaviour. Those skills help businesses innovate, manage risk and enter new markets. A modern economy needs depth and flexibility, not a fee schedule built around a crude hierarchy of useful and less useful knowledge.Ìý
The fiscal logic is no better. JRG reduced public investment in university teaching by around $1 billion a year while increasing the share paid by students. The government is now spending $16 billion reducing HELP balances while leaving in place a system that continues to inflate them. That’s not fiscal discipline. It’s deferred reform.Ìý
And the cost of that delay is being carried by younger Australians. Previous generations benefited from a system in which government met a greater share of the cost of higher education. Today’s students are being asked to pay much more at the same time as housing and living costs move further out of reach.Ìý
A fairer deal can’t mean a one-off debt reduction for those already in the system while the next group of students is pushed through the same machinery. The test is whether government leaves behind a fairer system. JRG fails it.Ìý
It also undermines the current government’s ambition to expand tertiary participation. Australia can’t expect more regional, outer-suburban and lower-income students to enter higher education while placing the highest prices on some courses. Wealthier families will continue to have choices. For everyone else, the price tag risks narrowing them.Ìý
The politics are clear. The Coalition created JRG. Labor has so far kept it. Both now own the consequences.Ìý
The major parties should commit before the next election to getting rid of JRG. For the Coalition, that means acknowledging the policy didn’t work and beginning to repair the damage. For Labor, it’s the logical next step in an agenda built around productivity, skills and a fairer deal for younger Australians.Ìý
That doesn’t mean writing a blank cheque. A better-educated workforce is an economic asset: graduates are more likely to be employed, earn higher incomes, pay more tax and provide the advanced skills businesses need to grow and innovate. A new model can rebalance student and government contributions, remove the worst distortions and better reflect both the cost of education and the return Australia receives from investing in it.Ìý
The Albanese government’s student debt cut has shown there is strong public support for giving younger Australians a fairer deal. Replacing JRG would allow the major parties to show they understand the problem and are prepared to fix it.Ìý
It would be practical economic reform: reducing unnecessary debt, strengthening Australia’s skills pipeline and showing young Australians that government is on their side. That’s a policy both sides should take to the next election – and one worth voting for.Ìý
ENDS
