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Committee: Trade Support Loans Bill 2014

Estimates & Committees
Lee Rhiannon 14 Jul 2014

Senator RHIANNON (New South Wales) (21:06): I seek leave to move Greens amendments (1) to (6), (8) and (10) to (12) and Greens requests (9) and (7) on sheet 7493.

Leave is granted.

These are the set of amendments that bring forward a range of badly needed changes to the bill. Together, they strengthen support for apprenticeships in the very responsible way. The amendments increase the repayment income threshold and provide for lower repayment rates. This would allow apprentices to earn more before paying off the debt, again something which is very important because we know apprentices do not start off with much money. This debt is going to put them under considerable pressure and this is a way to bring a better regime into managing this matter.

We have heard much debate about how the debt is an incentive. That is again why we are bringing this forward—to be able to moderate it to some extent. The changes set out reduce the negative impacts of the legislation with, as I said, links to the repayment rates of the HECS-HELP system, so that apprentices will begin to repay at a rate of four per cent of their income once they earn over $53,000. The amendment is needed because the loans scheme could well go the way of loans for university students, to a higher interest rate and a form of compound interest. As we know, that would mean that the debt burden would escalate considerably. I know that is not what is proposed but, when you look at the progress with the debt burden that university students have to handle—and the government is proposing to change that too—we need to be aware of this, wary of it and, the Greens would argue, bring in ways to modify it.

We also have an amendment that would remove the CPI indexation. This would have the impact of reducing the real value of the loan over time. Every year an individual did not make a payment, the value of the loan would decrease at a cost to the government. The biggest beneficiaries of such a change would be low-income apprentices. Again, that brings in some protection for apprentices who start off on a very low wage, so that they do not end up with an extensive burden. This is another responsible amendment to manage what is, we would argue, not a good scheme. We are trying to put in some modifications that would allow the government to have the scheme it wishes. Labor wanted to support that but surely these modifications should be adopted.

There is also an amendment that would retain most of the current structure of the loans scheme but would ensure that, when an apprentice signs up to a loan with the current CPI interest rate, they will stick to that rate for the duration of their loan. This would prevent a situation we are now seeing where—

Senator Cormann: Mr Temporary Chairman, I rise on a point of order. It would seem to me that, with Senator Rhiannon now talking about indexation, she is actually talking to the amendment she previously moved, which the Senate has already dealt with. She might want to consider that.

The TEMPORARY CHAIRMAN (Senator Seselja): Thank you, Senator Cormann. We have been going across them a little bit. Senator Rhiannon, obviously there has been some wide-ranging debate but I would ask you to stick to the set of amendments currently before the committee.

Senator RHIANNON: Thank you, Temporary Chairman. I have done them in two lots in globo for the ease of the chamber and have explored those issues because there is some crossover with these amendments. I will move to requests (7) and (9) covering amendments which, upon completion, ensure the apprentice will get a 40 per cent discount on their loan, not the proposed 20 per cent. Then an amendment inserts a clause—and we see this as the most important amendment—that would waive the debt for any apprentice who is dismissed from their apprenticeship or traineeship as a result of any action taken by the employer. I give emphasis to that amendment because many situations could arise from this bill if it is put into law. One of those could be that a young person starting off on their career has an apprenticeship, the employer dismisses them and they end up with no qualification but with a large debt. We need to manage that in some way. Allowing that to happen would be a highly irresponsible way to be managing our apprenticeship schemes. That is why we have brought that amendment forward.

I commend the Greens amendments to the chamber. We have put a lot together for the ease of the committee at this late hour.

The TEMPORARY CHAIRMAN (Senator Seselja): The question now is that the amendments and the requests for amendments moved by Senator Rhiannon be agreed to.

 

The amendments were defeated on the combined vote of Labor and the Coalition.

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