The Job-ready Graduates scheme, introduced by the Australian government in 2021, has been widely criticized for its failure to incentivize students to study in fields deemed a priority by the government. Instead, it has led to a dramatic increase in the cost of humanities, arts, and law degrees, making it harder for young Australians to buy a home. This is particularly concerning given the skyrocketing house prices across the country, which have added to the affordability challenge.
The scheme, which aimed to make nursing, computing, teaching, and engineering degrees cheaper, has been deemed a failure by the Education Minister, Jason Clare, and the Australian Tertiary Education Commission (ATEC). However, the government has yet to act on the recommendation to reform the scheme, which was made over two years ago by the major Universities Accord report. This delay is despite the widespread calls to scrap the scheme, including from the Shadow Education Minister, Julian Leeser, who warns that reversing it could lead to students paying more than they currently do.
The impact of the scheme on home ownership prospects is significant. Experts say the debt incurred by students will hamper their ability to get a home loan, as banks factor in existing debt when considering home loan approval. This means it takes longer to get into the property market or, in some cases, it's impossible to get in at all. The chief economist at AMP, Shane Oliver, supports this view, stating that having a high level of student debt is a constraint on being able to get into the property market.
The degrees made more expensive under the scheme also teach the sorts of skills employers want, according to Edward Cavanough, the chief executive of The McKell Institute. These skills, such as creative soft skills, cultural literacy, creativity, relationships, and good use of language, are becoming more attractive to employers in the long term. However, the scheme has inadvertently created a system where the degrees that are most attractive to future employers are the most expensive, which is the literal inverse policy outcome.
The impact of the scheme is also evident in the hesitation of students to try out new courses for fear of debt. University student Chith Weliamuna, who is halfway through his double degree in law and politics, philosophy, and economics, said he is seeing the ramifications of the scheme play out among his peers who are avoiding more challenging courses. This hesitation can lead to students not exploring their interests and expanding their horizons, which can have long-term consequences for their career prospects.
In conclusion, the Job-ready Graduates scheme has had a detrimental effect on the home ownership prospects of young Australians. The government's failure to act on the recommendation to reform the scheme, despite widespread criticism, is concerning. The impact of the scheme on student debt and the resulting affordability challenge for home ownership highlights the need for a more comprehensive approach to tertiary education funding and policy in Australia.
