“We continue to work with the Treasury and the [banking association] to understand current practice before considering whether to act,” Jones said.
Bligh's position returns responsibility for action to the federal government, which should refer the matter to the regulatory board.
Banking Association of Australia chief executive Anna Bligh says changes to the way HELP debts are considered in home loan assessments will not be the panacea for housing affordability , but they could play a role.Credit: Oscar Colman
The Universities Deal report called on the government to ensure banks recognized that HECS-HELP, which starts to recover student loans through the tax system once graduates earn $51,550 a year, was not like other types of loans because default was not possible.
“Unless someone earns sufficient income, there is no obligation to repay and should therefore be treated differently,” the report said. Among dozens of recommendations, it said HECS-HELP should not be treated in a way that unduly limited a person's ability to borrow.
The recommendation was supported by University of NSW vice-chancellor Attila Brungs, University of Sydney vice-chancellor and Group of Eight chair Mark Scott, as well as federal politicians David Pocock and Allegra Spender.
Education Minister Jason Clare, who will unveil the first stage of his response to the University Deal recommendations in next week's Budget, acknowledged on Monday that more needs to be done on student debt and housing loans.
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“In response to that, the assistant treasurer has written to the banks, written to the ABA asking for advice on how they deal with HECS debt. So work is being done in response to that recommendation,” he said in an interview on ABC radio .
Asked if this meant student debt would not be included in future home loan calculations, Clare said: “Watch this space… is what I would say. We are working with the banks , so I can't give you a conclusive answer until we have an answer.”
Bligh said the banking industry was willing to work with the government and regulators to get more people into households, but at the same time it needed to protect itself from financial distress.
“These obligations help protect consumers and banks take their responsible lending obligations very seriously,” he said.
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