Sunday, 3 May 2015

Debt Dodgers !

Slowly and surely the need for tertiary qualifications are becoming the requirement for entry into an ever expanding range of professional careers.  The old days of  "learning on the job  " are over and this now applies to nursing and teaching.  A university degree also confers higher salaries and is seen as an important step in mapping out a career path.

Not everyone has the ability to pay up front for a university education and so the government introduced a scheme known by the acronym HECS  - which was later changed to HELP -  to turn those fees into a loan, to be repaid when that persons earnings reached a level sufficient for repayment to begin.  The level set for the 2016/17 year is $53,000.

Of course, collecting that debt required the debtor to remain within reach of the Australian tax man and soon many newly minted degree holders headed off overseas and took up rewarding positions in Britain, Europe or the United States - where they were no longer required to lodge an annual Australian tax return.   As a consequence, there is now an outstanding HECS debt held by the government that amounts to a staggering thirty-five billion dollars.

The net is about to close.  Tax arrangements between countries come into play and those with outstanding HECS debts are about to get a tap on the shoulder from a foreign tax man - and a reminder that the Australian tax office has a very long arm.   It seems that dodging that debt by skipping the country is about to end.

There is another anomaly that should get the government's attention.   A percentage of university students drop out and do not complete courses, but the debt remains for the time they took a place that could otherwise have been allotted to someone else.  Many seem to think that because they did not receive a degree - they need not repay that debt.  Because they chose not to complete their course and fled overseas is no reason for debt cancellation.  They should firmly remain on the government radar.

There is another matter that draws heavily on the public purse that is about to come under the spotlight.  The Sydney median home price is dangerously near a million dollars and both members of the average family need to have a job - and this raises the question of child care costs.   This is heavily subsidized and yet finding a place for children to be cared for during the working day is at a premium.    The rules are about to change to tilt the balance in favour of those who actually have a job or are studying to achieve the qualifications for work.

At present the rules are lax and those who have a part time job that amounts to only an hour or so's work a week can qualify - and take up a place that prevents someone with a full time job getting child care relief.   It raises the question of whether stay-at-home-mums should be eligible for child care rebates as a cost on the public purse.

It seems that some people think that child care is primarily for the the purpose of integrating children socially and developing their interpersonal skills so that they fit neatly into the social order when their schooling years begin.   This seems to come into conflict with the desperation of those trying to make a living - and bring up small children at the same time.   Working Mums are no longer a matter of choice.

Both collecting HECS debts and tightening the rules on child care will be controversial.   There are some people who think university should be free and strenuously try and avoid debt repayments, and others who see childcare as a government responsibility that is simply an early form of the free education system open to all.

It all really comes down to managing the public purse to achieve the most good - for most people - and spread the load in an equitable manner !

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