SASKIA MABIN:
Andrew Leigh has jumped on the line to talk with me about a range of things going on in his world. How are you?
ANDREW LEIGH:
Very well, Saskia. How are you?
MABIN:
Very well, and before we get into policy, I’d love to talk to you about the news that Sydney Marathon is going to be the seventh world marathon major. I believe you’re a bit of a marathon runner yourself. Are you feeling a bit excited about this?
LEIGH:
Very excited, Saskia. So, I’ve run the 6 world marathon majors and having Sydney join the ranks is just a remarkable thing for Australian runners. It will make the Sydney race a little bit harder to get into, but it will now be one which is attracting people from around the world. It won’t be the fastest of the marathon majors. That will probably still be Berlin, Tokyo or Chicago, but it’s going to certainly be the most scenic with that start across the bridge, the finish at the Opera House and the beautiful Sydney out in front of you. So, I’m sure many Canberra runners will be looking forward to lacing up next year to do either their seventh or their first marathon major.
MABIN:
Oh, for sure, and if I was someone who’d already run the Sydney Marathon, I’d be just counting that as another one in the world marathon major count because I know it wasn’t officially part of it before, but I don’t know if I’d need to go back and do it again just to say that I’d made it.
LEIGH:
You know, you’ve nailed my dilemma there, Saskia. I’ve run Sydney Marathon far faster than I ever will again, and so I’m kind of thinking to myself, do I get to count the time that I ran in 2019, or do I have to sort of plod through in 2025 for it to be a major? So, these are the exciting questions on which the running world is turning right now.
MABIN:
Well, I’m no expert and certainly have absolutely no authority in this space, but I would say absolutely you should count that time and don’t bother going back to do it again unless it’s something that you really want to. It sounds like it might be. So, who am I to stop you?
LEIGH:
It’s a great race, and of course, Canberra has a fabulous marathon coming up in April. For any listeners tempted to do their first, the Canberra one is a fabulous race to do.
MABIN:
Yes, and we had their half‑marathon event just this weekend past on Sunday. Yeah. Yesterday, I interviewed a very impressive 16‑year‑old athlete, Harry Irvine, who did that with his uncle Sam.
LEIGH:
Harry’s amazing.
MABIN:
Yeah, it really was very impressive because I don’t think I was even awake by the time Harry had crossed the finish line. So, well done to everyone in the running world, that’s excellent news. And yes, you should sign up. Maybe you get to run alongside the member for Fenner, Andrew Leigh.
LEIGH:
It’s normally a casualty of running a Canberra race. I tend to be hanging out there somewhere.
MABIN:
Get to spot a Canberra celebrity. Hey, so we’ve got a lot to talk about in the workspace as well this week. Labor has said that they’re going to try and make the HECS system a little bit easier for young Australians, or potentially not‑so‑young Australians, people who are still saddled with debt years after finishing their tertiary education. You’re raising the repayment threshold from $54,000 to $67,000 as what’s been called an immediate cost‑of‑living relief. Tell me a little bit more about how your party to this decision, Andrew Leigh.
LEIGH:
Well, Saskia, when we first introduced HECS, when Peter Dawkins brought the bill in in 1989, the arrangement was that you didn’t start paying back till you got to about average earnings, which back then was $22,000. But over time, that repayment threshold has crept down, and so people are paying back before they’ve gotten to the average. What we’re doing now is pushing that repayment threshold up from $54,000 to $67,000, meaning that if university doesn’t pay off for you, you don’t start to pay back your debt. It makes it fairer and ensures that we’re only asking people to make a contribution to paying off their debt once their earnings have gone above the average.
MABIN:
We’ve been speaking about this actually a little bit this week across the station, and the Australian National University Student Association President, Phoenix O’Neill, had some things to say on this. Just have a quick listen to what Phoenix O’Neill thought about this measure.
[Excerpt]
PHOENIX O’NEILL:
For current students, it’s not going to ease the burden of the cost‑of‑living crisis because most students aren’t paying off their debt yet, and it doesn’t overall address the kind of brokenness of the student debt system that we have.
[End of excerpt]
MABIN:
What do you have to say about that, Andrew Leigh? It’s not an immediate benefit to the cost‑of‑living crisis.
LEIGH:
Well, it’s certainly why we’ve increased a range of income support payments, including student support payments. We understand that students need that support and so the increases that we’ve put in place in previous budgets have been squarely focused on students. We’re also to make other forms of education cheaper. So, the fee‑free TAFE places, which are being expanded through legislation that we’ll put into parliament, is going to also make a difference for people taking on vocational education. But we’re keenly aware of that cost‑of‑living squeeze. The tax cuts for all taxpayers, the energy bill rebates, the childcare work, all of that is focused on different parts of the community that are feeling the cost‑of‑living pressures right now.
MABIN:
On Friday, I spoke with the economist, who was the architect or one of the architects of the HECS system, Bruce Chapman, and he stressed that something he would like to see done to change the HECS system, or at least change the cost of education, is to reduce the price of some degrees. Those degrees were made more expensive during the Morrison government. Here’s a little bit of what he had to say about that.
[Excerpt]
BRUCE CHAPMAN:
The worst aspect of HECS at the moment is that the prices for humanities are much too high. They’re unreasonably high. And this all happened in 2020. The previous government changed the prices by a very large extent to make it very unfair, in my view. And I think if I was able to influence anything much to do with HECS these days, it would be to fix the prices. But fixing the prices again won’t do anything for people in the short run, it’ll just make the length of time that people repay HECS different.
[End of excerpt]
MABIN:
Andrew Leigh. That was just one time in that interview that he raised that point. He really drove it home a few times that that’s what he would change is to fix the prices of a number of degrees. He mentioned their humanities degrees, which were made more expensive a few years ago. Is this something that Labor is looking at doing?
LEIGH:
Well, Bruce is an absolute legend and probably has had more influence on policy than any other living Australian economist. So, I take what he says very seriously, as does the Education Minister, Jason Clare. When the system started off, students paid about 30 per cent of the cost of their education, Saskia. Now that’s up to about 40 per cent. So, you can think of the decision we’ve made to cut 20 per cent off all student loans as being a way of rectifying that really problematic JobReady Graduates scheme that the Coalition put through in 2020. As Bruce said, it’s one of the worst decisions in Australian public policy and it’s really had a harmful effect.
MABIN:
Okay, so potentially something then. If Bruce Chapman is the hero of economics, and I believe many people, including yourself, think he is potentially something, then, to take seriously as we head into next year’s election campaign. My guest is Andrew Leigh. He’s the Federal Member for Fenner, the Assistant Minister for Competition – I do need to take a deep breath when I read out your title, Andrew Leigh, because it’s very long – Charities and Treasury. Also, the Assistant Minister for Employment. Something else I’d like to talk about with you while we’ve got you is, last month Jim Chalmers introduced to parliament some merger laws. It’s been touted as the biggest change to this space in about 50 years and has certainly received the tick of approval from the ACCC. What are you proposing in this space?
LEIGH:
Well, we’re proposing to revitalise Australia’s merger laws. It’s the biggest shake‑up in our merger laws for half a century. The Australian merger law system just isn’t fit for purpose, Saskia. There are about 1,400 mergers a year, of which the competition watchdog only sees about 300. So, it doesn’t see 3 out of 4 mergers. What this will ensure is there’s a compulsory notification like most other advanced countries do it. And that will mean that the system is able to more quickly approve low‑risk mergers and focus attention on the high‑risk mergers. This will have a positive impact on the economy, and some of the modelling suggests that could be up to hundreds of millions of dollars per year. So, a really critical economic reform and Gina Cass‑Gottlieb, the chair of the competition watchdog says it’s the most important thing we can do for competition right now.
MABIN:
Yeah, and I understand there would be a number of key thresholds that would need to be met in this space, but also that the ACCC would then, beyond that, be able to request the Treasurer to designate certain sectors where every deal would require approval. Things like the supermarket sector, for example.
LEIGH:
Yeah, that’s right. So, every supermarket merger will come to the ACCC. That’s a key sector which we know needs additional focus. Then the ACCC will basically be focusing on mergers involving large firms or large deals. That’s really critical so it can block what is problematic, but also expedite the vast majority of mergers that aren’t problematic. So, we get a system that is faster, more transparent, better for business and better for the Australian economy, which has really suffered from not having a best‑practice merger approach.
MABIN:
Yeah. Andrew Leigh, we’re fast running out of time, but just one of my listeners would like some more clarification. They’ve asked, ‘What is all the talk about taking 20 per cent off all the existing HECS debts?’ So, you’re able to provide some clarification there?
LEIGH:
Yes. So, we’ve announced that we’ll take 20 per cent off all student loans and cut student loan debt repayments. So, there’ll be around 3 million Australians who’ll benefit from that. Just to give you an illustration, the average HECS‑HELP debt is $27,000. So, someone with a debt of that size will see around $5,000 wiped off their HECS‑HELP loans next year. And so, along with the changes to indexation, it means collectively, we’re wiping close to $20 billion in student debt.
MABIN:
Okay, wonderful. We’ll have to leave it there today. Andrew Leigh, thanks for your time.
LEIGH:
Thank you, Saskia.