The Senate’s education legislation committee has given the green light to the government’s plan to offer HECS-style loans for university students to launch innovative startups. But a likely challenge by the Coalition means cross bench support will be needed.
The Senate Education and Employment Legislation Committee on Friday tabled its report on a government bill to set up its ‘Startup Year’ program, recommending it be passed.
An Albanese government election commitment, the Startup Year program will offer 2000 loans to final-year undergraduate students, post-graduate students and recent graduates to develop their ideas through university accelerator programs.
While the new program aims to deliver more startups, it is also a skill building exercise the government says will encourage innovation. It also has provisions to allow the encouragement of students from diverse backgrounds to participate in the sector.
The bill was widely supported by universities, but they expressed some reservations like adding to student debt, how accreditations would work and a lack of places. Two loans of $11,800 would be possible for an initial intake of 2000 people.
The universities want more refinement through yet to be developed program guidelines and a pilot set to launch in July.
The Labor-chaired Senate and Education committee recommended the bill be passed and agreed with stakeholders’ input that the Startup Year program “would need to deliver value to students over and above the current offerings of university accelerator programs”.
“The committee heard that the Startup Year program would provide a strong value proposition to students through the provision of a university-issued accreditation and the development of essential entrepreneurial skills and attributes,” its final report said.
Existing university accelerator programs are not typically set up to deliver an accreditation and universities told the inquiry their programs could not simply be rebadged for the Startup Year.
Coalition senators, including shadow Education minister Sarah Henderson, rejected the bill in its current form.
“It is poorly thought out, short-sighted, offers no clear value proposition for students or universities, and burdens students who are already struggling with significant cost of living pressures with even more debt,” the senators wrote in their dissenting remarks.
The Coalition raised issues with the feasibility of having a pilot program ready by July, the long term financial stability of the program that allocates only $11,800 per student, and the likely edge metropolitan universities with existing startup programs would have.
More student debt at a time of high inflation is also a problem, the senators said.
“It is entirely unclear as to why prospective students would take on such significant additional debt when the Startup Year program provides them with no assurance whatsoever that their participation will lead to any concrete result.”
The Greens did not argue against the committee’s recommendation to pass the bill but used its dissenting report to argue for the wiping of student debt.
The inquiry heard evidence using the HECS-style loans for the Startup Year program would be a barrier for students concerned with taking on more debt, with disadvantaged students likely to be more sensitive to the costs.
Committee member and Greens NSW Senator Mehreen Faruqi said the evidence to the inquiry showed “it is crystal clear that the student loan system is not working and needs to be fixed”. She argued the Start Up Year program should be free, as should all education, reiterating the party’s policy to wipe student debt.
With concerns from both the Opposition and Greens senators the bill now faces a less certain passage through the Senate before the Stratup Year’s planned pilot from July.
The Albanese government has previously been able to negotiate support from the Greens and independent senators like David Pocock in exchange for amendments and commitments in other areas.
Parliament next sits for the May budget and again in June.
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