tag:theconversation.com,2011:/us/topics/hecs-debt-16979/articlesHECS debt – The Conversation2020-09-02T05:45:31Ztag:theconversation.com,2011:article/1450272020-09-02T05:45:31Z2020-09-02T05:45:31ZLet working graduates claim a tax deduction for their HECS-HELP debt<figure><img src="https://images.theconversation.com/files/355730/original/file-20200901-18-hxohb8.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4902%2C3258&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/young-attractive-desperate-woman-suffering-stress-435542989">Shutterstock</a></span></figcaption></figure><p>Most graduates leaving university today do so with a massive debt hanging over their heads. They will take many years to repay their accrued HECS-HELP debt through the taxation system. There will be little relief for these graduates as the government has slammed the door shut on the tax deductibility of their tuition costs against the income they earn as a result. </p>
<p>The government also intends, for new students from 2021, to increase the amount many students pay towards their education. Popular courses such as humanities, commerce and law will <a href="https://www.dese.gov.au/document/better-university-funding-arrangements-reducing-complexity-and-targeting-job-ready">cost them A$14,500 a year</a>. A combined commerce/law or arts/law course, which are the most popular study choices for aspiring lawyers, will cost them over A$70,000.</p>
<p>The government constantly reminds us government-supported students’ <a href="https://www.studyassist.gov.au/help-loans/hecs-help">HECS-HELP</a> debts are deferred. Only when they reach the annual income threshold (<a href="https://www.studyassist.gov.au/paying-back-your-loan/loan-repayment#:%7E:text=The%20compulsory%20repayment%20threshold%20is,(ATO)%20at%20any%20time.">A$45,881 for 2019-20</a>) do they start repaying their debt. </p>
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Read more:
<a href="https://theconversation.com/lowering-the-help-repayment-threshold-is-an-easy-target-but-not-the-one-we-should-aim-for-94910">Lowering the HELP repayment threshold is an easy target, but not the one we should aim for</a>
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<p>The underlying rationale is that students are receiving an interest-free loan, as the HECS-HELP debt is only <a href="https://www.studyassist.gov.au/paying-back-your-loan/loan-indexation#:%7E:text=There%20is%20no%20interest%20charged,they%20are%2011%20months%20old.">indexed to inflation</a> (CPI, which measures cost-of-living increases). HECS-HELP provides eligible students with a loan to pay their student contribution for a Commonwealth-supported place in their chosen course. </p>
<p>Another scheme exists for those students not eligible for a Commonwealth-supported place. This is called FEE-HELP. These students receive a loan to pay tuition fees for units of study in their chosen course. A FEE-HELP debt is also indexed each year. </p>
<p>Graduates repay these HELP debts if and when their earnings rise above the threshold. </p>
<p>However, as explained below, postgraduate students with a FEE-HELP loan can claim a tax deduction for their tuition fees.</p>
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Read more:
<a href="https://theconversation.com/students-low-financial-literacy-makes-understanding-fees-loans-debt-difficult-45088">Students' low financial literacy makes understanding fees, loans, debt difficult</a>
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<h2>Two student loan schemes, two different rules</h2>
<p>The usual rule for taxpayers is that expenses incurred in earning assessable income are deductible. Taxpayers can <a href="https://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Education-and-study/">claim self-education expenses</a>, which includes undertaking university courses, where they are able to show the study is connected with their income-earning activity. These deductible expenses include tuition fees which can be paid through the <a href="https://www.studyassist.gov.au/help-loans/fee-help">FEE-HELP</a> scheme. </p>
<p>In contrast to <a href="https://www.education.gov.au/higher-education-administrative-information-providers-march-2020/31-fee-help#:%7E:text=Students%20may%20be%20eligible%20for,tuition%20fees%2C%20contact%20the%20ATO.">FEE-HELP tuition costs being deductible</a>, student debt under the HECS-HELP scheme has specifically been rejected as a tax deduction under <a href="http://classic.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s26.20.html">section 26-20 of the Income Tax Assessment Act 1997</a>. These students are unable to claim a tax deduction for their university fees regardless of whether they are earning relevant income during their course or when they get a job as a graduate after completing their course. </p>
<p>Graduates start paying income tax on amounts above the normal tax-free threshold of A$18,200 but may not actually earn above the HECS-HELP threshold amount. On this basis graduates may be paying their fair share of tax on their income, but their HECS-HELP debt continues to grow over time. When graduates reach the threshold, they start paying both income tax and repayments of their HECS-HELP debt. In short, there is no tax relief for graduates.</p>
<p>The inequity between graduates and other taxpayers becomes clearer when you consider the additional self-education expenses these other taxpayers can claim. If already working within their chosen job and studying part-time, but not confined by the HECS-HELP tag, they can claim for textbooks, student union fees, computer expenses, internet costs for online learning and stationery. </p>
<p>Crucially, FEE-HELP recipients can also claim for the cost of their tuition fees. Once they reach an income threshold, their debt is also <a href="https://www.studyassist.gov.au/paying-back-your-loan/loan-repayment">repaid through the taxation system</a>. </p>
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Read more:
<a href="https://theconversation.com/five-things-senators-and-everyone-else-should-know-about-changes-to-help-debts-84843">Five things senators (and everyone else) should know about changes to HELP debts</a>
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<a href="https://images.theconversation.com/files/355732/original/file-20200901-22-194dyuv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Young woman with calculator smiling as she looks at laptop screen." src="https://images.theconversation.com/files/355732/original/file-20200901-22-194dyuv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/355732/original/file-20200901-22-194dyuv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=430&fit=crop&dpr=1 600w, https://images.theconversation.com/files/355732/original/file-20200901-22-194dyuv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=430&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/355732/original/file-20200901-22-194dyuv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=430&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/355732/original/file-20200901-22-194dyuv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=540&fit=crop&dpr=1 754w, https://images.theconversation.com/files/355732/original/file-20200901-22-194dyuv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=540&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/355732/original/file-20200901-22-194dyuv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=540&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Come tax time, students with FEE-HELP debts are smiling compared to those with HECS-HELP debts.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/portrait-smiling-young-woman-calculating-finance-166290524">Shutterstock</a></span>
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<h2>Treat all self-education expenses equally</h2>
<p>It is time to revisit the tax deductibility of HECS-HELP repayments. The current regime is complex, difficult to comprehend and has inbuilt inequities. The basic rule of tax deductibility should apply across the board, regardless of what type of support the government is providing to university students. </p>
<p>If we accept the arguments from the government that full-time students are receiving interest-free loans for their education and that the debt is deferred until they earn above the threshold, then there is an equally strong argument that graduates should then be able to defer, until that time, a tax deduction for the payment.</p>
<p>The general rule that a tax deduction is allowed to a taxpayer for expenses directly incurred in deriving income should apply to all relevant taxpayers. All taxpayers should be treated equally when spending on self-education. There should be no distinction between students receiving different types of HELP from the government.</p>
<p>At the moment undergraduate students tend to receive HECS-HELP while postgraduate students tend to receive FEE-HELP. These postgraduate students can immediately claim the cost of their tuition fees as a tax deduction even when this is funded through the FEE-HELP loan. This is because postgraduates are normally working in their chosen field and satisfy the necessary link between expense and income earned.</p>
<p>Undergraduate students tend to be studying full-time and working in casual jobs, which are not relevant to their studies. Students in this situation would not be able to claim their fees as a tax deduction regardless of the HECS-HELP tag. It would be equitable to amend the Tax Act to allow graduates to claim deductions for their tuition costs later when they are working in their chosen field.</p>
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<p><em>Correction: This article has been corrected to clarify that FEE-HELP recipients can claim a tax deduction on tuition fees even when this cost is funded through FEE-HELP, but not on repayments of the loan.</em></p><img src="https://counter.theconversation.com/content/145027/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael William Blissenden does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Taxpayers, including those paying tuition fees with FEE-HELP loans, can claim a deduction for self-education expenses that relate to the work they do. But graduates with a HECS-HELP debt can’t claim.Michael William Blissenden, Professor of Law, University of New EnglandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/822172017-08-10T02:24:42Z2017-08-10T02:24:42ZFee increases still on the table after Senate committee reports on higher education changes<figure><img src="https://images.theconversation.com/files/181615/original/file-20170810-13327-hflzcb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Where to next on higher education reform?</span> <span class="attribution"><span class="source">AAP/Paul Miller</span></span></figcaption></figure><p>On Wednesday, a Senate committee <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Education_and_Employment/HigherEducation2017/Report">reported</a> on the government’s <a href="https://theconversation.com/2017-higher-education-reform-cuts-to-universities-higher-fees-for-students-63185">proposed changes to higher education</a>.</p>
<p>Though more moderate than <a href="https://theconversation.com/its-not-just-about-student-fees-its-about-institutionalised-inequity-27178">the 2014 version</a>, the new higher education package represents groundhog day for the major political parties. The committee, chaired as it was by the Coalition, recommended passing the measures, stating that they will:</p>
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<p>… balance the Commonwealth’s need to recover student debts over time with the need of students to access a fair and high-quality system of higher education without facing high upfront fees.</p>
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<p>However, the Labor members of the committee dissented. They strongly argued for the bill to be rejected, arguing that: </p>
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<p>Australian students will have to pay more, for less, sooner.</p>
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<p>Where to next?</p>
<h2>What are the changes?</h2>
<p>The <a href="https://docs.education.gov.au/documents/driving-innovation-fairness-and-excellence-australian-education">reforms’</a> explicit intent is to rein in government spending on higher education without compromising teaching quality or restricting access to higher education by making it unaffordable.</p>
<p>The headline changes are:</p>
<ul>
<li><p>An increase in the student contribution toward the cost of the degree to, on average, 46% for Australian students (currently they pay on average 42%).</p></li>
<li><p>According to the government, the maximum cost of a Commonwealth-supported course would be A$50,000 for a four-year degree, or $75,000 for a six-year medical degree.</p></li>
<li><p>Students paying for their degree through <a href="https://www.education.gov.au/higher-education-loan-program-help">HECS-HELP</a> would start paying it back when they earn $42,000 (the current threshold is $54,869).</p></li>
<li><p>The universities would be subjected to a 2.5% funding cut (the government calls it an efficiency dividend), which amounts to around $380 million in 2019. </p></li>
<li><p>Access to Commonwealth-supported places for Australian permanent residents and New Zealand students would be removed. These students would have to pay the full tuition rate. This would typically double or even triple the cost of their degree. To offset the fee increase, these students will be able to access HECS-HELP loans like Australian citizens, whereas previously they had to pay up front. </p></li>
</ul>
<p>For context, when higher education reform was last attempted in 2014, proposed cuts to university teaching funding were around 20%. And student fees were to be deregulated, leading to fears that degrees could cost more than $100,000. </p>
<p>The 2014 proposals proved almost universally unpopular but the legislation lingered, zombie-like, for several years before being shelved. This new proposal is an attempt to press the reset button and move forward. </p>
<p>Those opposed to the latest proposal have pointed to reduced funding for universities, higher costs to students, and tougher loan repayment requirements. </p>
<p>Those supporting the changes feel the fee increases and funding cuts are moderate in comparison to the 2014 proposals, and in line with the overall fiscal reality. </p>
<h2>How was the new reform agenda received?</h2>
<p>Since announcing the changes, the government has received more than 1,200 submissions from a wide range of higher education stakeholders, including students and their parents. </p>
<p>Further submissions were made to the <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Education_and_Employment/HigherEducation2017">Senate committee</a>. The vast majority opposed the proposed changes to student tuition fees and repayments. </p>
<p>The general sentiment revealed by the submissions was a belief that “students will end up paying more to get less”. This phrase, or similar versions of it, appeared in multiple submissions.</p>
<p>Many submissions were from permanent residents and New Zealanders, worried about the intended increase to the cost of their education. In the words of one:</p>
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<p>I am pretty sure there are countless others who have had their dreams of studying higher education crushed … We should take care of the people living in this country, and give them a chance to progress into university, before they like us feel as though they may have to return back to their home countries just to follow their educational dreams.</p>
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<p>In <a href="http://www.aph.gov.au/DocumentStore.ashx?id=e0c7a835-3ee3-4045-9e14-4a71ff1ad941&subId=512537">its submission</a>, the University of South Australia supported the student fee increase but opposed the lowering of the repayment threshold.</p>
<p><a href="http://www.aph.gov.au/DocumentStore.ashx?id=4599b508-9c1e-47dc-8c06-050a1050029e&subId=511791">Victoria University proposed</a> the money raised by increasing student tuition fees should be given to the universities rather than the Commonwealth:</p>
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<p>… in order to directly improve the student experience of those paying the fees.</p>
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<p>All other universities either opposed the student fee increases, or avoided the issue in their submissions. </p>
<p>All universities opposed the proposed funding cut to the universities themselves.</p>
<h2>What next?</h2>
<p>In its dissenting report, Labor calculated, for example, that a graduate with a HELP debt earning $51,000 will have less disposable income than someone earning $32,000. </p>
<p>Labor also expressed its concern about the impact of student debt on New Zealanders and permanent residents, given they will be required to pay full fees.</p>
<p>Similarly, the Greens members of the committee dissented, stating that:</p>
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<p>… young people from low socioeconomic backgrounds would be priced out of an education.</p>
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<p>Assuming the government proceeds with the changes, the Senate will debate and vote on the bill in due course. If so, its fate lies with the minor parties and independents – just as it did the last time.</p><img src="https://counter.theconversation.com/content/82217/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tim Pitman does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Though more moderate than the 2014 version, the new higher education reform package represents groundhog day for the major political parties.Tim Pitman, Researcher in Higher Education Policy, Curtin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/772392017-05-05T04:59:22Z2017-05-05T04:59:22ZThe strange accounting behind the proposed HECS changes<figure><img src="https://images.theconversation.com/files/168032/original/file-20170505-21620-100jwkm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Simon Birmingham said a reduced HECS repayment threshold for graduates would deliver a 'fairer deal for taxpayers'.
</span> <span class="attribution"><span class="source">Sean Davey/AAP</span></span></figcaption></figure><p>All is not as it seems with the Turnbull government’s <a href="https://theconversation.com/higher-education-reform-small-changes-for-now-but-big-ones-to-come-76978">proposed changes</a> to higher education funding.</p>
<p>Federal Education Minister Simon Birmingham has argued that higher tuition fees, lower direct grants to universities and a reduced HECS repayment threshold for graduates will deliver a <a href="http://www.senatorbirmingham.com.au/Latest-News/ID/3483/A-stronger-sustainable-and-student-focussed-higher-education-system-for-all-Australians">“fairer deal for taxpayers”</a>. </p>
<p>But unusual budget accounting rules mean the promised positive impact of these changes on the federal budget’s bottom line is far from clear.</p>
<h2>Accounting techniques used during budgets</h2>
<p>Over recent decades, governments around the world, including in Australia, have increasingly adopted private sector accounting techniques in their budget processes. </p>
<p>This change helps explain the impulse behind <a href="https://theconversation.com/university-students-to-pay-more-as-government-looks-to-2-8-billion-saving-76954">the government’s plans</a> to increase tuition fees by 7.5% and reduce direct grants by introducing a new efficiency dividend.</p>
<p>If the decrease in grants is matched by the increase in fees, universities will see little change in their funding relationship with the government. </p>
<p>Because the costs of tuition fees are deferred through the HECS system, governments will continue to transfer money upfront from Treasury coffers to university bank balances.</p>
<p>The key difference lies in how this funding relationship is accounted for.</p>
<p>Under private sector accounting rules, the portion of money still transferred from governments to universities, but which becomes student debt, is no longer counted as spending. </p>
<p>HECS debt is instead accounted for as a financial asset held by the government and therefore removed from key budget balances announced on budget night.</p>
<p>While the cost of creating new HECS debt is moved off the books, private sector accounting sees traditional grant-based funding as real budget cost and therefore a prime target for savings. </p>
<p>Over time, the effect of moving from grant to debt-based funding is to shift the cost of university funding from all taxpayers to a more narrow group of current and future students, who make <a href="https://www.theguardian.com/commentisfree/2017/may/04/why-the-coalitions-university-changes-are-just-a-great-big-new-income-tax">income-contingent repayments</a>.</p>
<h2>Past changes to HECS</h2>
<p><a href="https://apsa2016.arts.unsw.edu.au/node/65/paper/1762">We have been researching</a> how changes in accounting methods have reshaped the politics of HECS since it was introduced in 1989. </p>
<p>At one level, the Turnbull government is following the example set by the Howard government, which also increased fees and reduced grants in 1996 and 2005. But it is also departing from the Howard government in the other major component of its higher education package: reducing the HECS income repayment threshold.</p>
<p>The last non-indexation change to the HECS repayment threshold was implemented in 2005 by the Howard government. The change went in the opposite direction to the current proposal, increasing the income level at which HECS repayments kick in from about $25,000 to about $35,000. </p>
<p>Strange as it may sound, this move had no negative budgetary effect, despite reducing HECS repayment receipts.</p>
<p>Just as government spending isn’t necessarily accounted for as spending, government income isn’t necessarily accounted for as income.</p>
<p>Under the same private sector accounting rules, repayments by students of HECS debt do not count as revenue. Like the issuance of debt, repayments of principal are removed from the main budget balances because it results in an equivalent reduction in the value of the government’s financial asset</p>
<h2>Why lower the repayment threshold then?</h2>
<p>Why then is the government proposing to reduce the repayment threshold from $54,000 to $42,000 if it will have no direct positive impact on the budget deficit?</p>
<p>Part of the answer to this question lies in lesser known part of the federal budget that was introduced with the adoption of private sector accounting rules. </p>
<p>As with corporations, the federal government now accounts for the “fair value” of the financial assets on its balance sheet. Fair value is basically an estimate of the price an asset could be sold for to investors in the market.</p>
<p>A number of bodies have been raising alarm bells about the fair value of the government’s HECS portfolio in recent times. </p>
<p>Bodies such as the <a href="http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Budget_Office/Reports/Research_reports/Higher_Education_Loan_Programme">Parliamentary Budget Office</a> have noted that the fair value of outstanding HECS debt is well below the balance sheet value of around $52 billion. </p>
<p>This is because HECS is a concessional loan, with more generous conditions than a normal bank loan.</p>
<p>These concerns are a little misleading. Governments are not corporations and HECS was never designed to be a tradeable financial asset. </p>
<p>This much was acknowledged by the Abbott government’s Commission of Audit, <a href="http://www.ncoa.gov.au/report/phase-one/part-b/7-13-higher-education-arrangements.html">which decided not to</a> recommend privatisation of HECS debt precisely because it would be such a poor investment for the private sector. So fair value rules can’t really apply. </p>
<p>Nonetheless, this unusual accounting sits behind Birmingham’s claim that the level of accumulated HECS debt is <a href="http://www.abc.net.au/radionational/programs/breakfast/simon-birmingham-on-higher-education-overhaul/8488486">“unsustainable”</a> and needs to be repaid at a faster rate.</p>
<p>There is much to be concerned about with the federal government’s proposed higher education reforms, including negative effects on teaching, research and learning conditions, and <a href="http://junkee.com/hecs-student-debt-budget/104028">financial burdens</a> for current and future workers paying off their debts.</p>
<p>As the debate proceeds, it is also important to keep in mind that the government’s own budgetary savings rationale can’t be taken at face value.</p><img src="https://counter.theconversation.com/content/77239/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gareth Bryant is a member of the Greens. </span></em></p><p class="fine-print"><em><span>Ben Spies-Butcher is a member of the Greens.</span></em></p>We shouldn’t take the government’s own budgetary savings rationale at face value.Gareth Bryant, Lecturer in Political Economy, University of SydneyBen Spies-Butcher, Senior Lecturer in Economy and Society, Department of Sociology, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/418862015-05-17T20:05:40Z2015-05-17T20:05:40ZLabor’s plans for science, technology, maths education well-meaning but misguided<p>A heavy focus of Opposition Leader Bill Shorten’s <a href="http://www.alp.org.au/budget_reply_speech">budget reply speech</a> on Thursday night was preparing for the future with science, technology, engineering and mathematics education. While this focus is a step in the right direction, the policies probably aren’t the right way to go about it.</p>
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<p><strong>School education expert Misty Adoniou, University of Canberra</strong></p>
<p>Shorten’s budget reply started off with promising words about harnessing the creativity of the nation. He went on to explain that education is the most important catalyst of productivity. So the scene was set for some big announcements in education.</p>
<p>Instead, Labor’s budget response on education turned out to be a one trick-pony: it was all about STEM education – science, technology, engineering and mathematics.</p>
<p>Labor would set aside A$353 million to bulk up science and maths education. A Labor government would ensure every child in primary and high school learns computer coding skills. The rationale is that coding is “the literacy of the 21st century” – but actually literacy is the literacy of the 21st century. We still need to be able to read and write and that will remain true even into the 22nd century.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/81784/original/image-20150515-8715-7hz1ni.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/81784/original/image-20150515-8715-7hz1ni.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/81784/original/image-20150515-8715-7hz1ni.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/81784/original/image-20150515-8715-7hz1ni.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/81784/original/image-20150515-8715-7hz1ni.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/81784/original/image-20150515-8715-7hz1ni.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/81784/original/image-20150515-8715-7hz1ni.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/81784/original/image-20150515-8715-7hz1ni.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Actually literacy, not coding, is the literacy of the 21st century.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/eifl/5997824484/in/photolist-a91qfY-5jWU3i-5guc28-6VvuFx-4TyqWE-6wo5vG-5guaYp-99XZry-hidCyF-aG3FA-pkiGT-4Vzw9M-4hZkPw-4JCkoW-4SeEXy-4TJDqn-36BkzB-5gywLA-4m5ojv-duvjjF-5tQeKc-5gywcb-7LRPcs-e3Zz1-4m9qPy-5bwe6M-4xBfB5-4DEf6B-9es4mr-ehBnRE-5JUU5s-8L9Vbr-7i2gFM-P8J62-5tpTyU-99EyQN-99FWTY-99CQgX-3x44W-kpwdE-pyrM81-621mRe-5jXeU6-BysaT-q3K1zE-4KNRCQ-5o8nRF-7G8gLW-7c3Ldk-Pcd1">Flickr/EIFL</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>The computer coding we teach today, much like morse code in its day, will rapidly become obsolete as technology grows and computer languages evolve. Which is not to say computer coding isn’t a worthwhile subject for school in the here and now but it would have been good to have heard what was going to be done to ensure all children leave school with excellent literacy skills. </p>
<p>The present government’s own very limited definitions of literacy as phonics and “sounding out” are woefully inadequate and will not guarantee literate, creative citizens – but neither does Labor’s proposal to apparently neglect reading and writing and head straight for computer coding.</p>
<p>Shorten also promised to train 25,000 teachers in science and maths, and to write off the HECS debts of 100,000 science and maths graduates – perhaps on the proviso that they do some school teaching? </p>
<p>The rationale for this is sound – we don’t have enough science and maths teachers and we have far too many teachers who are teaching out of their area of expertise. But federal Education Minister Christopher Pyne has already said his government will require all teachers, including primary school teachers, to graduate with a subject specialisation in maths, literacy or science. So they are on a unity ticket there it would seem.</p>
<p>But in the end it doesn’t matter how many teachers they get into maths and science classrooms – what matters is that those teachers stay. <a href="https://theconversation.com/why-good-teachers-leave-teaching-21339">Good teachers leave teaching</a> at alarming rates, and they leave teaching far too soon. </p>
<p>Early-career teachers need quality mentoring, timely professional learning and a reduction in their face-to-face teaching in the first year. But neither Liberal or Labor has ever talked about that in their budgets.</p>
<hr>
<p><strong>Higher education expert Gavin Moodie, RMIT</strong></p>
<p>Shorten <a href="http://www.alp.org.au/budget_reply_speech">announced</a> on Thursday night that:</p>
<blockquote>
<p>We will write off the HECS debt of 100,000 science technology, engineering and maths students.</p>
</blockquote>
<p>“Deadweight spending” is the economists’ term for government spending to encourage activity that would have happened anyway. For the rest of us it is waste, and that is a good description of the Labor leader’s promise to write off the HECS debt of 100,000 STEM students.</p>
<p>This promise is apparently for 20,000 <a href="http://www.alp.org.au/futuresmartuniversities">STEM award degrees</a> that <a href="https://theconversation.com/small-business-tax-should-be-cut-by-5-shorten-41831">Labor proposes to offer</a> every year for five years, with the HECS-HELP debt written off at graduation.</p>
<p>HECS for science and engineering students is <a href="https://docs.education.gov.au/documents/2015-indexed-cgs-and-help-rates">A$8,768 a year</a>. Most science programs are three years long, giving science graduates a HECS debt of of around A$26,000. Most engineering degrees are a year longer so graduates will have a debt of about A$35,000. </p>
<p>In 2013 engineering graduates were 30% of <a href="https://education.gov.au/selected-higher-education-statistics-2013-student-data">all domestic bachelor graduates</a> in natural and physical sciences, information technology, and engineering and related technologies, giving a weighted debt per science and engineering graduate of A$29,000. The 20,000 STEM award degrees would therefore cost around A$0.58 billion a year or A$2.9 billion over five years.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/81787/original/image-20150515-8712-liama8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/81787/original/image-20150515-8712-liama8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/81787/original/image-20150515-8712-liama8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/81787/original/image-20150515-8712-liama8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/81787/original/image-20150515-8712-liama8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/81787/original/image-20150515-8712-liama8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/81787/original/image-20150515-8712-liama8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/81787/original/image-20150515-8712-liama8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Wiping debts of STEM students won’t affect the uptake as it applies only to those who would’ve done it anyway.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/re-publica/13921565608/in/photolist-ndcErf-pfx5vu-nuqoe7-nuqESh-6y4QUE-aUux8-avxdQM-avu4i8-avxecR-avwGiq-avxeCT-avxe1t-avwGwq-7UcCYp-6m2t66-jATiMD-oZ19aX-oYSMFY-pgniWR-8mWwia-6m6C9j-rT8XFk-bLXPYZ-8mZCWG-8mWu1p-8mWtgV-8mWuwt-8mWtJe-8mWuPi-bmXUz1-bmXUy5-nsDWf1-8mZCnY-8mWrLx-8mZzS5-8mZC3U-8mZBL1-8mZDPJ-8mWrXB-8mWttp-8mWw58-8mWs7Z-8mWvit-8mWsR8-8mWt6n-8mZzFd-8mZDed-8mZA3Y-pg6Lpt-8K8Sw7">Republica/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>This returns Labor to a policy similar to one it took to the 2007 election to halve maximum HECS fees for mathematics, statistics and science students. </p>
<p>However, there is little evidence that HECS fees affect students’ choice of subject since demand for science programs <a href="https://education.gov.au/undergraduate-applications-offers-and-acceptances-publications">does not seem to be greatly affected</a> by Labor’s ending of lower HECS for science students in 2013. Shorten is therefore promising to write off the HECS debts of students who would have enrolled anyway in science, technology, engineering and mathematics.</p>
<p>Shorten probably promised to write off HECS to show that Labor values science, technology, engineering and mathematics. But there are much less wasteful ways of showing symbolic support for favoured disciplines. </p>
<p>One would be a science sabbatical that paid for science graduates to spend a term or up to a year providing extra teaching in schools. If science sabbaticals were funded at an average of A$50,000 each, A$0.58 billion could fund 11,600 science sabbaticals or at least one science sabbatical per school.</p>
<p>One of the biggest challenges for schools and universities is to find work-experience placements for their students. While employers complain that graduates aren’t “job ready”, they don’t provide enough placements for students. So A$0.58 billion could contribute around A$350 towards the cost of a science work placement for each secondary pupil.</p>
<p>There are probably many other great ideas for spending A$0.58 billion a year to support science education. Unfortunately, there’s no evidence to say Shorten’s plan will work.</p><img src="https://counter.theconversation.com/content/41886/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Misty Adoniou has received funding from the ACT Education and Training Directorate to research professional teaching standards. She is affiliated with the professional teachers' associations ALEA, ACTA and TESOL International, all concerned with the teaching of English.</span></em></p><p class="fine-print"><em><span>Gavin Moodie does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A heavy focus of Bill Shorten’s budget reply speech was preparing for the future with science, technology, engineering and mathematics education. While this focus is a step in the right direction, the policies probably aren’t the right way to go about it.Gavin Moodie, Adjunct professor, RMIT UniversityMisty Adoniou, Senior Lecturer in Language, Literacy and TESL, University of CanberraLicensed as Creative Commons – attribution, no derivatives.