SYDNEY: Australian Prime Minister Anthony Albanese said on Sunday that his government planned to cut student loans for around three million Australians by 20%, wiping off around A$16 billion ($10 billion) in debts.

The move builds on May’s budget, which attacked cost of living pressures in Australia and gave debt relief for students, as well as more investment to make medicines cheaper, and a boost to a rent assistance programme.

“This will help everyone with a student debt right now, whilst we work hard to deliver a better deal for every student in the years ahead,” Albanese said in a statement announcing the cut to student loans for tertiary education.

The changes would mean the average graduate with a loan of A$27,600 would have A$5,520 wiped, the government said, adding that they would take effect from June 1, 2025.

The government said it already planned to cut the amount that Australians with a student debt have to repay per year and raise the threshold to start repayments.

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If reelected at the next general election, due in 2025, Labor would also legislate to guarantee 100,000 free places each year at the country’s Technical and Further Education institutes, Albanese said.

“This is a time for building, building better education for all,” he said in a speech to supporters in South Australia state capital Adelaide.

Cost of living pressures, stoked by stubbornly high inflation, have a special resonance with a federal election looming and the centre-left Labor government now polling behind their conservative opponents.