The Australian this morning runs a left-field editorial opposing the cut to the discount for paying student contributions upfront.
Completely ignoring the only compelling rationale for the discount, reducing the cost of the HELP scheme, the editorial drifts off into various social policy objectives: encouraging students to use some of their part-time earnings to reduce their debts, and encouraging the ‘responsible behaviour’ of families who assist their students by reducing their debt.
But why is increasing public debt to decrease private debt a good thing?
And if increasing public debt to decrease private debt is a good thing, why restrict it to families with university students?
No wonder we are sinking in a sea of debt when even the most economically rational newspaper resists sensible plans to reduce government spending.
The editorial also incorrectly states that the change will reduce revenue flows to universities. Instead, universities will get slightly more revenue directly from students and slightly less directly from government. We’ll have to wait for the forward estimates next week to see what the government thinks, but after factoring in some behaviour change I’d estimate a $70-80 million shift.