What the HECS?
By Freya Leach
First published in the MRC’s Watercooler newsletter. Sign up to our mailing list to receive Watercooler directly in your inbox.
It is universally acknowledged that the Democrats’ $1 billion US Presidential campaign was a disaster. Leaders around the world are looking at its failure as a case study of what not to do.
Yet, one politician seems deaf to this lesson: Prime Minister Anthony Albanese. Albanese has decided to double down on failed Democrat-style policies, offering a carbon copy of Bidenomics.
At a US-style rally in Adelaide—complete with forced enthusiasm and a teleprompter-heavy monologue—Albanese announced Labor’s big re-election pitch: wiping 20% of all Higher Education Contribution Scheme (HECS) debt, amounting to $16 billion of taxpayer money, or $1,600 per household.
It’s a terrible idea.
Universities Get a Free Pass
Albanese’s policy absolves universities of accountability. If higher education institutions charge excessive fees, churning out low-value degrees, and flooding the job market with graduates lacking employable skills, they should be held accountable. Australian taxpayers shouldn’t foot the bill for their low-quality education.
If a degree is worth its salt, its graduates will find meaningful work and repay their debts. If not, the University ought to bear some responsibility for failing to deliver the product it promised; an employable graduate. That’s why the MRC wants Universities to be liable for the indexed portion of a student's HECS debt if they have not begun paying it back after five years. Read more about it in our report here.
Albanese’s policy, however, makes no reform, nor does it introduce accountability. It is simply a blank cheque to the Universities.
Punishes the Responsible
A couple of months ago I was tossing up between using my savings to pay off my degree or putting down a deposit on my first home. Thankfully I bought the apartment. Albanese’s announcement is an utter injustice for all the young people who have diligently paid off their loans, especially those who made voluntary repayments. To them, this is a slap in the face. Going forward, good luck getting anyone to pay off their HECS.
A Reverse Robin Hood Scheme
This policy takes from those who chose not to attend university and redistributes it to the highly educated. The people footing the $16 billion bill—via taxes—are the very Australians Labor claims to champion: middle-class families, blue-collar workers, and small business owners. Meanwhile, the beneficiaries of this scheme are disproportionately those who’ve racked up debts pursuing degrees that often lead to higher lifetime earnings. If you do a degree, you get the benefits of that degree, and hence, it’s only fair you should pay for it.
Labor’s $16 Billion Tax
At $16 billion, this HECS giveaway will cost every Australian household roughly $1,600. Consider the more than 24 million Australians who do not benefit from this policy: families grappling with skyrocketing mortgages, tradies squeezed by inflation, and retirees watching their savings erode. All of them will foot the bill for Labor’s attempt to win favour in inner-metropolitan seats.
Aiding Elites Over Average Aussies
On average, university graduates earn more over their lifetimes than non-graduates. Why, then, should taxpayers be asked to subsidise those who are likely to out-earn them? More than 55,000 Australians hold Higher Education Loan Program (HELP) debts of $100,000 to $200,000, meaning Labor’s policy delivers these individuals an average $25,000 windfall.
This isn’t just unfair—it’s a brazen transfer of wealth from battlers to highly educated elites.
Albanese’s HECS plan reeks of borrowed American populism. Labor is latching onto Bidenomics in a desperate attempt to shore up support in teal and inner-city electorates.
The Greens, ever keen to out-left Labor, have gone even further, promising to cancel 100% of HECS debt—at an eye-watering $81 billion cost.
Even the architect of Australia’s HECS system, Professor Bruce Chapman, has denounced the policy as grossly inequitable because abolishing student loans primarily benefits the privileged.
We are now in a race to the bottom, with both Labor and the Greens abandoning the working class in favour of their soy flat white-loving electorates.
What About Middle Australia?
Labor would have Australians believe this is a policy of compassion and equity. It is neither. For middle Australia—those who skipped university, who started small businesses, who saved and paid off their loans—it’s an insult. And for the millions battling Labor’s homegrown inflation, it’s a betrayal. This is a simple transfer of debt from the 3.3 million HECS loan holders to the other 24 million Australians.
If Labor wanted to provide real relief, they’d tackle the root cause of Australia’s cost-of-living crisis: inflation. That means cutting energy prices, reducing government waste, and rolling back red tape. Instead, they’ve chosen a reckless and regressive policy that will widen the gap between the left-wing political class and the real Australians they’ve abandoned.
A losing gamble
This policy is a sugar hit for inner-city elites while alienating the battlers who will decide the next election. If the Government keeps emulating the Democrats’ political trainwreck, they might want to start packing up Kirribilli House. Australians won’t stand for it.
