Close to 3 million Aussies would see their student debt abolished under The Greens. Source: Freepik.
With just a day out from the federal election, things are heating up in the political world but an announcement back in March by The Greens that they would abolish student debt, has certainly posed a question as to whether it’s achievable.
Plans are to use the Stage 3 tax cuts, backed by both majority parties.
Labor and the Liberals have approved what will be tax cuts worth $60.7 billion, whereas the Greens suggest their initiative will only make them $33 billion out of pocket.
NewsCop talked to several political experts to see if the debt of over 2.9 million people could actually and practically be paid off.
University of Newcastle Professor of Politics Jim Jose mentioned to NewsCop that from his perspective there doesn’t seem to be any hidden negatives to this proposition.
“In terms of the trade-off between abolishing the student debt and foregoing Stage 3 tax cuts this would appear to be a win-win,” he said.
However, University of Sydney Senior Lecturer of social and political sciences Dr Stewart Jackson had an opposing opinion, saying that there’s definitely one negative.
“The only real downside is that with increasing numbers of students attending university the cost is increasing constantly,” he said.
“Paying for the abolition of the debt and the re-introduction of free tuition will be a permanent drain on the federal budget, requiring at least some increase in taxation.”
While Professor Jose says it doesn’t appear to be negative, he also mentioned that it depends on who will benefit from it as to whether it’s agreeable or not.
“Those who support a “user-pays” or a “fee for service” approach to education will see any move to a free education system as a negative.
“This is a matter of ideology in terms of the basis for providing an education system.”
When it comes to funding the student debt abolishment, the Greens say it’s possible with the proposed Stage 3 tax cuts and the experts agree, it could be feasibly done.
Dr Jackson said, “The stage 3 tax cuts would be an excellent mechanism of course to fund the abolition of student debt AND pay for student fees into the future.”
While Mr Jose furthered the sentiment commenting that “if the figures are accurate, the debt could be forgiven without removing the entirety of the Stage 3 tax cuts. It might be possible to shrink the value of what is to be offered with the Stage 3 tax cuts. This would also be a win-win.”
John Hawkins, former economic adviser to Greens senators Bob Brown and Christine Milne and Senior Lecturer at the Faculty of Business, Government and Law at the University of Canberra broke down how the initiative would be carried out.
“The amount of help debt is just under $70 billion but it’s a contingent debt, so people only pay it when their income is above a certain threshold,” he said.
“Some people never get over those thresholds and they never repay it so the total cost of revenue would be less than $70 billion and then if you compare that to the cost of the stage 3 tax cuts, they’re going to be around $16 billion the first year and ramp up to over $30 billion by 2031-32,
“So… yes the revenue you would get by abolishing the stage 3 tax cuts is going to be a lot more every year than you lose, by wiping out student debt so yeah the plan certainly adds up”
Although the experts are confident that the Greens could feasibly carry out this proposal, they aren’t so confident that it’s enough to get them elected.
Mr Hawkins told NewsCop that it might be appealing to young voters, but the Greens seem to be mostly realistic about the election outcome.
“It would certainly be appealing to recent students who have a help debt [but] I don’t think there is enough of them that will enable the greens to win a large number of seats.
“I think realistically the greens are not expecting to form a majority green government, I think their hope is they’ll have a balance of power.”
Adding to that was Dr Jackson who mentioned that the Greens might have some bargaining power when it comes to the ALP “to either cancel or amend the tax cuts” but said “the idea [of abolishing student debt] alone won’t get the Greens elected”.
Professor Jose told NewsCop that at best, it’ll open the Greens up to a potential new audience.
“Whether it will be sufficient to attract enough voters, especially away from their past choices, remains to be seen.
“The best that can be said at this stage is that abolishing student debt will improve the Greens’ attractiveness to younger voters, especially those voting for the first time or who in past elections might not have considered the Greens as an option.”
NewsCop contacted representatives from the Greens, Liberals and Labor however did not receive a response at the time of publication.
