Herald Sun http://www.heraldsun.news.com.au/printpage/0,5481,2061849,00.html GST puts $600 on uni debts By ANDREW PROBYN 01jun01 ONE million Australians today owe the Federal Government up to $600 more because of the GST's impact on their HECS debts. Student debts under the Higher Education Contribution Scheme are linked to the CPI. HECS debts will be indexed by 5.3 per cent today, including a 2 per cent GST "spike" caused by the new tax system's effect on the economy. A student who last year finished a five-year law/medicine degree yesterday owed $29,350 to the tax office. This student's HECS debt is today $30,906, up $1556 including the $587 GST spike. Those who have recently finished three-year business, economics or science degrees now owe $797 more, or $15,842, including $301 extra because of the new tax. And recent arts graduates now owe $11,249, up $686 from yesterday, including $211 caused by the GST. More than 980,000 Australians owe a total of $6 billion in HECS debt. Labor's education spokesman, Michael Lee, said the GST would reap an extra $120 million from the pockets of students. "Prime Minister John Howard said education would be GST-free," Mr Lee said. "Today, one million past and present university students will be reminded that this was just another GST lie." People with HECS debts have to pay 3 to 6 per cent extra tax if they earn more than $22,346. A person earning $40,224 or more pays the maximum HECS repayment rate of an extra 6 per cent tax. If you have a HECS debt and are paid $60,000 a year, you would pay $3600 more tax than a colleague without a HECS debt. A spokeswoman for Federal Education Minister David Kemp said HECS had always been linked to the CPI. "Students don't pay HECS debts until they have reached income thresholds," she said. "They are compensated for the GST spike because they have been in receipt of GST-related tax cuts." She said this year's 5.3 per cent CPI indexation was less than the 8 per cent CPI indexation in 1990 or the 6.4 per cent slug in 1991 under the Labor government. 2001 Herald and Weekly Times ************************************************************************* This posting is provided to the individual members of this group without permission from the copyright owner for purposes of criticism, comment, scholarship and research under the "fair use" provisions of the Federal copyright laws and it may not be distributed further without permission of the copyright owner, except for "fair use." -- Leftlink - Australia's Broad Left Mailing List mailto:[EMAIL PROTECTED] Archived at http://www.cat.org.au/lists/leftlink/ Sponsored by Melbourne's New International Bookshop Subscribe: mailto:[EMAIL PROTECTED]?Body=subscribe%20leftlink Unsubscribe: mailto:[EMAIL PROTECTED]?Body=unsubscribe%20leftlink
