Julie Owens (Parramatta, Australian Labor Party) Share this | Hansard source

The member for Forrest and I have some things in common and one of them is a passion for education and our grief when we see people not being given the opportunity to fulfil their potential. In my community in Western Sydney young people enrol at university at just over half the rate for the rest of Sydney. In the ten years of the previous government we saw the gap between enrolment rates in Western Sydney and the rest of Sydney actually widen. We saw a decrease in enrolment from people of low socioeconomic status and a decrease in enrolment from our Indigenous communities, all of which should be regretted. They are things that we need to change profoundly.

Prime Minister Gillard holds as one of her core beliefs the transformative power of good education, and I share this passion. In fact I believe that if Australia wants to continue our currently outstanding economic performance we have no choice but to drive investment participation and productivity in higher education. The Gillard Labor government will not accept anything less than a high-growth, highly skilled, high-wage economy for Australia’s future. To deliver this we need to broaden our skills base. Put simply, we need more people from a greater variety of backgrounds to be given a chance to possess higher skills and higher qualifications. This is the context in which the government’s reforms to the youth allowance system become of critical importance. These reforms to the youth allowance system were all about driving increased participation in higher education.

The previous government left behind an incoherent and poorly targeted system of youth allowance that was completely lacking in policy direction. The Bradley review of higher education found that 18 per cent of students who were living at home and were receiving Youth Allowance because they were considered independent were from families with incomes above $150,000. Ten per cent were from families with incomes above $200,000 and three per cent were from families with incomes above $300,000. Professor Bruce Chapman, carrying out a review of HILDA data, found that 36 per cent of Youth Allowance recipients were in households earning more than $100,000 a year. By contrast, 32 per cent of recipients were in households earning less than $50,000 a year. The number of students qualifying as independent by earning the required minimum income of $18,500 between school and university rose by 27.7 per cent between 2001 and 2007, but the number of dependent students who passed the critical parental income test fell by 21 per cent over the same period. So people from a lower socioeconomic status were choosing well and truly to withdraw from the possibilities of higher education.

By 2007 the number of students who qualified as independent by working, often during a gap year, exceeded the number of students eligible as dependent because of low family income. At the same time rural and low-SES participation was falling. Participation by regional young people was falling under the old system, not rising. Participation of regional students at university fell to 18.8 per cent by 2007 compared with 25.4 per cent of the population and the remote participation rate fell to 1.1 per cent compared to 2.5 per cent of the population. Low-SES participation languished at around 15 per cent compared to 25 per cent of the population.

Bernard Lane, commenting for the Australian in 2008, said:

The Youth Allowance program appears to have lost its rationale, as a growing number of university students from affluent backgrounds sidestep the parental income test.

Soon after that, Mr Lane received support from the then opposition spokesperson for education, Tony Smith, who called for a review of the youth allowance, saying it had become ‘too easy for students from affluent backgrounds to qualify’. Speaking at a gathering of Liberal students at the Australian National University in 2008, Mr Smith said, ‘The program, introduced by the Howard government, should be reviewed,’ and went on to argue:

The evidence seems to suggest that it has become too easy for students from affluent backgrounds to qualify and too difficult for students from modest backgrounds—or can I say anyone from a family whose parents earn more than $30,750—to qualify.

Mr Smith continued:

This shows up in the figures, with the number of students qualifying for Youth Allowance under this threshold actually falling by 22 per cent since 2001.

Mr Smith concluded his remarks with reference to the particularly adverse affects of the Howard system on country areas. He said:

It particularly disadvantages many students—particularly those from the country—who have to leave home to study, and has resulted in a situation where record numbers of students, or around one in 10 students in my home state of Victoria, defer their studies with many of them taking a year off to earn enough money to qualify for independence for Youth Allowance and possibly not returning to study.

This federal Labor government could not support this incoherent and poorly targeted system, which saw participation rates fall for the people who needed our help the most and financial windfalls for the better off who would be attending university regardless. Parramatteans were particularly horrified by this waste, because at that time they were seeing declining investment in our university and falling participation rates across the west generally.

This system of youth allowance existed side by side with declining investment and declining enrolments in my electorate. Department of Education, Employment and Workplace Relations figures show that the number of students commencing courses at the University of Western Sydney in 2006 was down 11.5 per cent on the previous year, and the total number of students attending the University of Western Sydney in 2006 was also one per cent down on 2005 numbers—again, an outcome which is not acceptable to this side of the House. Both regional enrolments and enrolments in the poorer areas of our cities were in decline—something that we had to reverse and reverse quickly.

We had a lot to clean up and a backlog in investment, but now we have a youth allowance policy which is coherent with national objectives—policy that realises that spending has its limits and makes sure that the priorities are right. Our changes to youth allowance particularly benefit students who have to move away from home to study and students from low-income backgrounds. The age at which a person is automatically independent is changing. It will be phased down from 25, where it is now, to 22 by 2012, at a rate of one year per year. This change means that more young people will be eligible for youth allowance and that many existing youth allowance recipients will receive a higher rate of payment.

Under the government’s new arrangements, many students who previously had to prove independence will now be able to access support automatically as dependants through the raised parental income test. Those who have worked full time and are independent of their parents can still access support in this way. The annual parental income test threshold for dependent youth allowance recipients to get the maximum rate will increase from $32,800, where it is now, to $44,165 per year, making more young people entitled to youth allowance and many people who are already receiving youth allowance receiving a higher rate of payment.

The parental income reduction for youth allowance has changed from a taper rate of 25 per cent per person to a family taper of 20 per cent—again, reducing the effect of parental income on a youth allowance recipient, particularly where the parent has more than one child. The parental income cut-off for a family is substantially raised. For a family with two children living away from home, the parental income cut-off point is raised to almost $141,000 per year, up from $79,000 under the previous government. These changes are allowing 68,000 students to become eligible for income support payments and will result in higher payments for a further 34,600. Again, these changes will impact in areas where enrolment rates were in decline under the old system.

We are also raising the personal income-free area for youth allowance and Austudy students and new apprentices. It will rise from $236 to $400 per fortnight. Students and apprentices will therefore be able earn up to $400 per fortnight without having their payments reduced. All students receiving youth allowance while undertaking an approved course are receiving a student start-up scholarship. In 2010, the scholarship will be $2,254 for the year and will be paid in two annual instalments. This scholarship is benefiting 146,600 students in 2010—28 times more than the number of equivalent scholarships that were provided when the government came to power. DEEWR estimates that by 2012 a total of 172,000 students will benefit from this additional assistance, which will help students meet the costs of books, equipment and lump sum expenses in each year of their course. Unlike the previous system, where the number of scholarships was limited and many eligible students missed out, under the new system the scholarships will be administered by Centrelink and all eligible students will receive a scholarship. So there have been many, many changes that have increased the amount of allowances paid to students who are in most need. (Time expired)

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