The Australian | 21 October 2013
The Coalition government’s commission of audit is the right vehicle to examine an idea like securitising student debt, former Universities Australia chief and now Australian National University economist Glenn Withers says.
With the government’s commitment to looking at things carefully and systematically, he said, it’s essential for a body like a commission of audit to look at such an idea, because there are ” both great opportunities and some dangers in moving to securitisation.”
He said it’s important to distinguish between securitisation and the more extreme option of privatisation.
It’s essentially the government issuing bonds on future revenue flows. (It would enable) private institutions or even retailers and some individuals, such as self-managed super funds, to buy a long-dated low-risk bond asset. The government would continue to control the student access to HECS schemes and collect the money through the Australian Tax Office, which is quite crucial to doing that economically and with full enforcement.
Withers money said money raised from HECS securitisation should be reinvested in tertiary education.
While he acknowledged that the government was looking for savings, he said spending the revenue was consistent with the government’s stated objectives.
At some time it’s going to have to come to terms with what it’s going to do post the minerals boom, and higher education’s one of the sectors it could develop. Here’s a way of getting private finance into that mix.
See
Hockey hoses down speculation on HECS “privatisation”
