Media Releases 2008

3 March 2008

Supercharging HECS: creating new foundations for the Education Revolution

Universities Australia today released details of an innovative proposal to securitise deferred Higher Education Contribution Scheme (HECS) payments to ensure Australian investment in higher education receives a much needed boost.

Under the proposal, Government bonds would be issued by Treasury, supported by future HECS repayments, and the proceedings from sale of the bonds used to create a HECS Fund. The investment returns on the HECS Fund would in turn be dedicated to new funding for university facilities and maintenance.

"A $6 billion fund could be established by the Rudd Labor Government, with an estimated $300 million becoming available annually from the Fund to support enhanced university infrastructure and facilities. This would be win-win - for Government, universities and the nation," Universities Australia Chief Executive Dr Glenn Withers said today.

The proposed HECS Fund would derive income from secure debt, and this would provide a predictable and reliable revenue source for campus improvements and university infrastructure.

The HECS fund would keep Australian investment money in the country, and aligns strongly with the Government’s agenda of fiscal responsibility, savings, and national investment.

"The HECS Fund could provide low risk bonds with guaranteed income, protected from domestic and international stock market fluctuations, which will appeal to superannuation funds and investors looking for long term low risk investments," Dr Withers said.

"The HECS Fund initiative would be just one part of the foundations possible for the Higher Education Revolution. It would ensure that the 1.1 million Australians who are currently repaying a HECS or related HELP debt can be satisfied that they are also directly building universities for the next generation of Australians," Dr Withers said.

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The Full Paper Supercharging HECS: Creating new Foundations for the Education Revolution is available from here

Media Inquiries Rebecca Harris – phone: (02) 6285 8206 or 0400 166691