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senate vote 2015-11-09#7
Edited by
mackay staff
on
2015-11-26 10:36:52
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Title
Bills — Education Legislation Amendment (Overseas Debt Recovery) Bill 2015, Student Loans (Overseas Debtors Repayment Levy) Bill 2015; in Committee- Education Legislation Amendment (Overseas Debt Recovery) Bill 2015, Student Loans (Overseas Debtors Repayment Levy) Bill 2015 - in Committee
Description
<p class="speaker">Robert Simms</p><p>I might take this opportunity to respond to some comments made in relation to this bill during the previous debate. I noted with great interest the comments of Senator McKenzie and the suggestion that the Australian Liberal and National parties are now, apparently, the bastions of fairness in Australian politics. 'Through the looking glass' indeed, because this comes at the same time that the Liberal and National parties have been talking about increasing the GST from 10 to 15 per cent—a huge impost on Australian families. We know that the Liberal and National parties are the parties that tend to focus on the interests of the rich and powerful, but when it comes to the most vulnerable members of our community they are missing in action. So much of this particular legislative approach seems to be based on this idea of the mythical Australian graduate who is earning hundreds of thousands of dollars a year working on Wall Street. But what about the Australian graduate who is on an average income, who is not aware of these taxation arrangements and who finds themselves caught completely unawares by this change to the legislative regime?</p> <p class="speaker">Honourable Senators</p>- The majority voted against an [amendment](http://www.openaustralia.org.au/senate/?gid=2015-11-09.209.1) introduced by Greens Senator [Robert Simms](https://theyvoteforyou.org.au/people/senate/sa/robert_simms).
- ### What was the amendment?
- The amendment was about how the bills would apply to people with student debts who already live overseas. It would have meant that the changes made by the bills wouldn't apply to those people so long as they continued to live and work overseas and didn't add to their debts at all (yearly indexation doesn't count as adding to your debt).
- ### What are the changes made by the bills?
- **These bills relate to the policy [for requiring Australians working overseas to repay their student debts](https://theyvoteforyou.org.au/policies/82).**
- If made into law, the bills will require Australians living overseas and earning over the threshold (which was $54,126 in 2015–16) to repay their [Higher Education Loan Programme](https://www.education.gov.au/higher-education-loan-program-help) (HELP) debt or [Trade Support Loan](http://www.australianapprenticeships.gov.au/trade-support-loans) (TSL) debt under the same compulsory repayment scheme that applies in Australia. This change would begin from 1 July 2017.
- The bills will also require Australians with HELP or TSL debts to notify the Commissioner of Taxation if they plan to be overseas for at least 183 days or if they have been overseas for at least 183 days over any 12 month period. The notification will have to occur either:
- * no later than seven days after leaving Australia; or
- * no later than seven days after the end of those 183 days
- Previously, Australians with HELP or TSL debts who moved overseas didn't have to make any repayments, regardless of how much they earned. Nor did they have to notify the Commissioner if they went overseas.
- For more information, read the [bills digest](http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1516a/16bd043). Also see [ABC News](http://www.abc.net.au/news/2015-11-09/senate-passes-legislation-requiring-expats-to-repay-hecs-debts/6925936).
- ### Amendment text
- See the full amendment text on [OpenAustralia](http://www.openaustralia.org.au/senate/?gid=2015-11-09.209.1).
<p>Honourable senators interjecting—</p> <p class="speaker">Peter Whish-Wilson</p><p>Mr Temporary Chairman, I rise on a point of order. I do not think the good senator can hear himself talk, at the moment, there is so much noise in these chambers.</p><p>The TEMPORARY CHAIRMAN: Thank you, that is a fair point. I ask senators who wish to continue their conversations to do so elsewhere.</p> <p class="speaker">Robert Simms</p><p>The point I was making is that our concern is about those young people and Australians who are living overseas who are not aware of the change to the taxation regime. People plan their lives on the basis of this kind of legislation, and to expect Australians who are expats living overseas to follow the vagaries of Australian politics seems naive and out of step with the way that most people plan their lives. That is why the Australian Greens have been advocating for a different approach.</p><p>I find it ironic, in the extreme, that the Liberal and National parties would accuse the Greens of being a party that does not stand up for fairness in this place. It is ironic, indeed, when one considers the record of this Liberal-National government when it comes to budget cuts that target the most vulnerable in our community and a plan to increase HECS and increase the cost of living for each and every Australian through a great big new tax on everything. The Australian Greens are proud of the role that they play in advocating for fairness in this parliament, and certainly will not be lectured by the Liberal-National coalition, in that regard.</p><p>I have some questions for the minister. How will the government inform foreign residents of the changes to their compliance responsibilities under this bill?</p> <p class="speaker">Simon Birmingham</p><p>By and large, it is incumbent upon individuals with tax obligations or student loan obligations to be aware of changes, in relation to those arrangements, and to comply with the tax laws of Australia if they have a tax obligation. In the end, a student loan repayment operates just like a tax obligation, in that regard.</p><p>We want to make sure that there is a focus on communicating with those affected by the measure and informing them of new requirements where possible. We are not asking for anything onerous—simply that people are brought into line with what would be expected of them were they still living in Australia. We will be using data-matching capabilities, including data exchange, with the United Kingdom to help locate debtors who are overseas. The application of similar arrangements for reciprocal student loan debt recovery is being discussed with New Zealand. This is not unprecedented. Other countries have successful, efficient overseas debt recovery programs. There is no reason to expect that Australia could not achieve similar arrangements.</p><p>It is important to appreciate and understand that not only does the tax office have the ability to run communication strategies that may complement the standard operating procedures, regarding expectations around what Australian taxpayers or those with student loans are expected to be aware of, but also—noting where you are probably going with this issue—the ATO does have a degree of discretionary power that it can apply where people have reasonable explanations for not necessarily complying in a timely manner with any particular changes. I also draw your attention to the fact that the time line for repayment in this regard is some way down the track, so we are looking at a situation where people will not have to make contributions until 1 July 2017.</p> <p class="speaker">Robert Simms</p><p>I thank the minister for his response. Of the expenditure identified in the 2015-16 budget, how much will go towards informing foreign residents of their new responsibilities?</p> <p class="speaker">Simon Birmingham</p><p>We do not expect there to be an onerous cost to the government in the application of this measure. We are, of course, expecting that people are aware of their responsibilities. We want to have a situation where people who are debtors register, which is why there is that requirement. There is a new obligation requiring debtors who are going overseas for longer than six months or who have lived overseas for longer than six months to notify the ATO. This is an obligation that begins from 1 January 2016. Those already overseas will have until 1 July 2017 to register. Those debtors who have been overseas for six months but have not registered we expect can be identified through some of the data-sharing arrangements between the ATO and the Department of Immigration and Border Protection, as well as the application of the reciprocal arrangements that I spoke about earlier.</p> <p class="speaker">Robert Simms</p><p>What penalties will the government pursue against overseas travellers who fail to report to the tax office that they intend to leave the country for over six months?</p> <p class="speaker">Simon Birmingham</p><p>Penalties for noncompliance are the same as penalties for noncompliance in relation to any Australian and their tax or student debt obligations. Equally, as I said before, the ATO does have some capacity, in assessing the application of penalties, to take into account individual circumstances or valid reasons that may be given by individuals through those circumstances.</p> <p class="speaker">Robert Simms</p><p>How will the government enforce that? Will they extradite people to Australia to ensure that they answer penalties here in our country? How will that be enforced?</p> <p class="speaker">Simon Birmingham</p><p>Of course, enforcement is a matter that the ATO would consider, but I think we would be some way down the track before we got to a point of considering such measures as that which you have suggested.</p> <p class="speaker">Robert Simms</p><p>Will the government be pursuing students with current existing HELP or TSL debt who take a gap year or gap semesters overseas but do not report to the ATO?</p> <p class="speaker">Simon Birmingham</p><p>As I have made clear, the expectation is that students would register if they are more than six months overseas. If they are earning an income in excess of their repayment threshold—currently slightly more than $54,000—then they are expected to repay. That is just as, if they take a gap year and work within Australia during that gap year and earn more than $54,000, they are expected to make repayments. And that is just as, if they happen to be part-time students who work and earn more than $54,000, they are expected to make repayments.</p> <p class="speaker">Robert Simms</p><p>Will the government be helping foreign residents to assess their worldwide income, or will it be on each foreign resident to do that component themselves?</p> <p class="speaker">Simon Birmingham</p><p>People are responsible for reporting their income, just as they are responsible for reporting their income through any part of the tax system.</p> <p class="speaker">Robert Simms</p><p>by leave—I move Greens amendments (1) and (2) on sheet 7781:</p><p class="italic">(1) Clause 2, page 3 (table item 6), omit "items 6 to 10", substitute "items 6 to 12".</p><p class="italic">(2) Schedule 1, item 11, page 8 (lines 5 to 21), omit the item, substitute:</p><p class="italic">11 Application of section 154 -16</p><p class="italic">  Section 154-18 of the <i>Higher Education Support Act 2003</i>, as inserted by this Act, applies to persons who leave Australia after the commencement of this item.</p><p class="italic">12 Application of amendments—pre -commencement debt</p><p class="italic">(1) If:</p><p class="italic">  (a) immediately before commencement a person is a foreign resident for an income year (the <i>first income year</i>); and</p><p class="italic">  (b) immediately before commencement the person has an accumulated HELP debt or otherwise has a HELP debt that has not been discharged; and</p><p class="italic">  (c) the person does not incur any additional HELP debt after commencement for the first income year or any later income year (other than any additional debt that arises as a result of indexation of the person's accumulated HELP debt or other HELP debt);</p><p class="italic">  the amendments made by this Schedule to the <i>Higher Education Support Act 2003</i> do not apply in relation to the person:</p><p class="italic">  (d) for the first income year; and</p><p class="italic">  (e) if the person continues to be a foreign resident for one or more later income years—each later income year for which the person continues to be a foreign resident.</p><p class="italic">(2) In this item:</p><p class="italic"> <i>  commencement</i> means the day on which this item commences.</p><p class="italic">13 Application of amendments—pre and post -commencement debt</p><p class="italic">(1) If:</p><p class="italic">  (a) immediately before commencement a person is a foreign resident for an income year; and</p><p class="italic">  (b) immediately before commencement the person has an accumulated HELP debt or otherwise has a HELP debt that has not been discharged (<i>pre</i><i>-commencement debt</i>) for the income year; and</p><p class="italic">  (c) the person incurs additional HELP debt after commencement for an income year (other than any additional debt that arises as a result of indexation of the person's accumulated HELP debt or other HELP debt) (<i>post</i><i>-commencement debt</i>);</p><p class="italic">  then:</p><p class="italic">  (d) the amendments made by this Schedule to the <i>Higher Education Support Act 2003</i> apply in relation to any post-commencement debt (including any indexation of that debt); and</p><p class="italic">  (e) section 154-16 of that Act, as inserted by this Schedule, does not apply in relation to the pre-commencement debt.</p><p class="italic">Note: Paragraph (1)(e) only relates to the levy under section 154-16 (which is imposed under the <i>Student Loans (Overseas Debtors Repayment Levy) Act 2015</i>), it does not affect any other liability for payment under the <i>Higher Education Support Act 2003</i>.</p><p class="italic">(2) In this item:</p><p class="italic"><i>  commencement</i> means the day on which this item commences.</p><p class="italic">(3) Schedule 2, item 10, page 13 (lines 5 to 21), omit the item, substitute:</p><p class="italic">10 Application of section 47C</p><p class="italic">  Section 47C of the <i>Trade Support Loans Act 2014</i>, as inserted by this Act, applies to persons who leave Australia after the commencement of this item.</p><p class="italic">11 Application of amendments—pre -commencement debt</p><p class="italic">(1) If:</p><p class="italic">  (a) immediately before commencement a person is a foreign resident for an income year (the <i>first income year</i>); and</p><p class="italic">  (b) immediately before commencement the person has an accumulated TSL debt or otherwise has a TSL debt that has not been discharged; and</p><p class="italic">  (c) the person does not incur any additional TSL debt after commencement for the first income year or any later income year (other than any additional debt that arises as a result of indexation of the person's accumulated TSL debt or other TSL debt);</p><p class="italic">  the amendments made by this Schedule to the <i>Trade Support Loans Act 2014</i> do not apply in relation to the person:</p><p class="italic">  (d) for the first income year; and</p><p class="italic">  (e) if the person continues to be a foreign resident for one or more later income years—each later income year for which the person continues to be a foreign resident.</p><p class="italic">(2) In this item:</p><p class="italic"> <i>  commencement</i> means the day on which this item commences.</p><p class="italic">12 Application of amendments—pre and post -commencement debt</p><p class="italic">(1) If:</p><p class="italic">  (a) immediately before commencement a person is a foreign resident for an income year; and</p><p class="italic">  (b) immediately before commencement the person has an accumulated TSL debt or otherwise has a TSL debt that has not been discharged (<i>pre</i><i>-commencement debt</i>) for the income year; and</p><p class="italic">(c) the person incurs additional TSL debt after commencement for an income year (other than any additional debt that arises as a result of indexation of the person's accumulated TSL debt or other TSL debt) (<i>post</i><i>-commencement debt</i>);</p><p class="italic">  then:</p><p class="italic">  (d) the amendments made by this Schedule to the <i>Trade Support Loans Act 2014</i> apply in relation to any post-commencement debt (including any indexation of that debt); and</p><p class="italic">  (e) section 47A of that Act, as inserted by this Schedule, does not apply in relation to the pre-commencement debt.</p><p class="italic">Note: Paragraph (1)(e) only relates to the levy under section 47A (which is imposed under the <i>Student Loans (Overseas Debtors Repayment Levy) Act 2015</i>), it does not affect any other liability for payment under the <i>Trade Support Loans Act 2014</i>.</p><p class="italic">(2) In this item:</p><p class="italic"><i>  commencement</i> means the day on which this item commences.</p> <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>
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