Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Hansard source

I seek leave to incorporate my speech on the second reading.

Leave granted.

The speech read as follows—

Mr President, I rise to speak to the Social Security Legislation Amendment (2007 Budget Measures for Students) Bill 2007.

This bill amends the Social Security Act 1997 and the Student Assistance Act 7973 to give effect to a series of changes to student financial support announced in this years federal Budget.

The Opposition supports this bill. Among other things, the bill makes a change to income support arrangements for tertiary students that is long overdue. This is to allow Austudy recipients access to rent assistance.

The bill also extends eligibility for Youth Allowance and Austudy to full-time students in approved Masters’ courses.

Austudy recipients are eligible full-time students who have commenced their course of study after they turn 25 years of age. It has been an anomaly, ever since the Howard Government changed student assistance arrangements in 1998, that younger students on Youth Allowance could receive rent assistance, but those on Austudy were ineligible.

Time and time again, this issue was raised with the Government by student organisations and for years they were ignored.

Now of course we have voluntary student unionism—again thanks to this Government—and many student representative organisations have been hard hit. They can’t speak up for students quite so loudly or quite so persistently.

In 2005 the Employment, Workplace Relations and Education References Committee conducted an inquiry into student income support. It recommended that rent assistance be extended to Austudy recipients, but this recommendation too fell on deaf ears.

Now, just before the tightest election the Government has seen itself face for quite a long time, it suddenly moves to a sensible position on this matter. It is about time!

Not far enough

But this legislation does not go far enough. The Senate Employment, Workplace Relations and Education Committee conducted a brief inquiry into this legislation. All submissions received welcomed the legislation, but all also said it didn’t go far enough.

Universities Australia welcomed the Budget measures, noting that they will provide better financial support for many students. The submission argued, however, that the measures were insufficient.

In particular, Universities Australia was critical of the fact that narrowly defined criteria for Youth Allowance eligibility were preventing many students from gaining income support assistance.

The submission argued that the financial difficulties young Australians face in completing their university studies was exacerbated by the fact that an increasing number of students have their applications for Youth Allowance rejected—or they don’t receive Youth Allowance at the full rate. “The reason is that many of these students are being assessed on the basis of their parents’ income and assets.” This was in turn placing an unreasonable financial burden on many students more generally.

To support its case, Universities Australia provided its 9 March draft report, ‘Australian University Student Finances 2006’, to the Committee. This report contends that university students at all levels are face increasing financial hardship.

The 9 March report found that:

• 40 percent of full-time students and 33 percent of part-time students believed the jobs they were doing were having an adverse impact on their studies;
• 22 percent of full-time students and 33 percent of part-time students regularly missed classes because they had to work; and
• the number of students incurring a debt has more than doubled from I I percent in 2000 to 24 percent today.

Universities Australia argued that the

“age of independence for Youth Allowance recipients should be reduced in order for university students not to be assessed on the basis of their parents’ income and assets.”

It also pointed out that the Social Security Act 7991 governs the age of independence, and that the Act contains a provision indicating that the age of independence ‘will be progressively reduced over time’. Universities Australia observed that this provision has been in place for nine years, since the passage of the Social Security Legislation Amendment (Youth Allowance) Act 7998, and the age of independence has not yet been reduced. It argued that an amendment to the Bill to reduce the age of independence to 18, as per the policy principle of reducing the age of independence, would greatly improve the support available to Australian university students.

Both the National Union of Students (NUS) and the Council of Australian Postgraduate Associations (CAPA) also welcomed the Budget measures.

NUS and CAPA noted that, of themselves, the measures are only part of the answer to redressing the financial hardship of university students.

The NUS submission noted that as a general proposition, the Budget measures would not

“...sufficiently address the ability for students to live and study without experiencing or being at risk of falling into povert’.3

NUS argued that

“...the expectation that students will continue to be financially supported by their parents (if they are deemed well-off) is unrealistic and does not allow for the individual’s respective needs and situations.’’

The Council of Australian Postgraduate Associations submission, while particularly welcoming the measure to extend rent assistance to Austudy recipients, was critical that insufficient effort had been made to provide genuine income support assistance, and that “...the current rates for Youth Allowance and Austudy place many students in extreme poverty.”

It further noted that “...even with access to rent assistance, most students are unable to live on income support alone, let alone those challenged with additional financial commitments and responsibilities’.

The Council of Australian Postgraduate Associations submission made a number of recommendations, including that:

“Access to income support [should] be extended to all students studying at postgraduate level to include both coursework and research higher degrees, regardless of the nature of the course in which they are enrolled.”

“The base rates of Youth Allowance and Austudy [should] be raised to, and remain above, the relevant Henderson Poverty Line.

“The age of independence [should] be reduced to 18 years of age to bring it into line with most other measures of social and financial responsibility.”

Financial situation of students

According to figures from the Department of Families, Community Services & Indigenous Affairs, between 1998 and 2006 there was a 6.4 per cent drop in the number of students receiving either Austudy or Youth Allowance.

These factors particularly affect students from lower socio-economic backgrounds.

Most graphically, we saw only a few weeks ago the release of the final report into student finances, Australian University Student Finances 2006 by Universities Australia. It showed just how difficult is the financial burden of going to university for many students.

It revealed that:

• Nearly 42 per cent of all full-time undergraduates and nearly 33 per cent of full-time postgraduate coursework students had a total annual income of less than $10,000.
• Full-time postgraduate coursework students had the highest rate of rejection for Youth Allowance, the highest rate of dependence on a partner, and the highest level of debt.
• Female students are more likely to rely on free or subsidised services provided by Universities and student associations and believed they would be less able to afford these services if they were not subsidised.

The Report is an indictment of the Howard Government’s neglect and complacency about the financial pressure University students are under.

Minister’s response

The response from the Minister for Education to this report has been that students should be more ‘frugal’ and the Government should not fund a ‘lifestyle’.

Julie Bishop claimed that the report’s findings were flawed, because the study was based on ‘anecdotal’ evidence. She questioned the honesty of the students participating in the survey, saying that “I know what would have said if I were a student”.

That the Minister for Education does not trust Australian university students or believe that students are facing financial hardship demonstrates just how out of touch the Howard Government is.

These financial pressures are increasingly turning full-time students into multiple part-time workers. This has many negative effects on their study experience and educational outcomes.

Bill’s provisions

This Bill contains a number of measures to bring the processes for ABSTUDY and AIC payments into line with other allowances when money is deposited into an incorrect financial institution and to allow data to be transferred electronically for administrative purposes.

The key provisions of this Bill, however, relate to the Austudy income support allowance.

Austudy provides financial help to students aged 25 years or more who are studying or undertaking a Australian Apprenticeship full-time.

Eligibility provisions

Currently, eligibility for university students is restricted to students undertaking undergraduate courses, to the exclusion of Masters level qualifications.

I want to make some comments on the bill’s eligibility provisions for Austudy and Youth Allowance. The Bill provides that only Masters courses required for entry to a profession, or that exist as a result of a course restructure, will be eligible for income support assistance, and that course eligibility will be at the discretion of the Minister.

CAPA in its submission argued that:

“these measures in their current form will allow access to income support to only a very small number of students in this group, and therefore fail to address the genuine need that has been identified in this area.”

Submissions to the Senate Inquiry also argued for an increase in the parental income test threshold under Youth Allowance. This is currently set at $30 750 a year. Having just one parent in a low-paid job could disqualify you from Youth Allowance! It is totally unrealistic in today’s world.

Student debt

These measures are a welcome start to addressing the financial pressures facing Australian university students, but they are only the beginning.

The Government’s own 2005 Higher Education Report released earlier this year reveals that the debt burden for young Australian students has more than tripled under the Howard Government from $4.5 billion in 1996-97 to nearly $13 billion in 2005-06.

This constitutes a massive debt burden around the necks of young Australians and our nation.

It is little wonder that the HECS debt burden continues to grow given the Howard Government’s green light for a 25 per cent increase in university fees in 2005.

If increasing HECS debts were not enough of a burden on students, the Howard Government has presided over the establishment of $100,000 degrees in Australian public universities.

The 2008 Good Universities Guide shows that there are now:

• over 100 domestic full-fee degrees at public universities that cost in excess of $100,000, and
• 2 domestic full-fee university degrees that cost in excess of $200,000.

In 1999, the Prime Minister said that:

“The Government will not be introducing an American-style higher education system. There will be no $100,000 university fees under this Government.”

Unfortunately, however, under the Howard Government, this is now a reality.

The Guide also shows that one degree at a public University costs in the vicinity of $240,000—roughly the same amount as the average Australian housing loan of around $245,000.

Like the Minister for Education who believes that students should be more frugal, the Treasurer has also described the present system as “generous” and pointed out that in the United States, students forked out more than $100,000 and rely on banks to lend them the money.

This just demonstrates how out of touch the Howard Government has become.

Federal Labor remains committed to phasing out domestic full-fee degrees at public universities commencing 1 January 2009 in order to ensure access for all young Australian students based on merit, rather than financial means.

But this is only the beginning of Labor’s commitment to reduce the financial pressures facing university students.

Clearly, more needs to be done.

Labor recognises that mounting student HECS debts can act as a disincentive to attending university, particularly for those from lower socio economic or battling backgrounds. That is why Labor has already announced targeted HECS relief in the national priority areas of maths and science.

Labor has already announced it will give struggling Australian university students a helping hand by reintroducing the Voluntary Student Supplement Scheme—abolished by the Howard Government in 2004.

The Voluntary Student Supplement Scheme will allow repayable loans of up to $7,000 per annum to be made available to students currently receiving Commonwealth Income support.

Labor is also examining a range of other possible measures, including:

• Scholarships for the best and brightest, scholarships for low SES students, and scholarships for particular disciplines; and
• Further HECS relief and further targeted HECS remissions for particular occupations identified as critical to our economy.

Students must be willing to put in the hard yards to support themselves—but there is a point when the financial and time pressures faced by students becomes simply too great, and compromises not only the quality of their education, but the potential future contribution they can make to the Australian economy.

Higher degree students and research training

Turning now to the area of my own portfolio, Labor will look at a thorough revamp of Australia’s research training scheme.

We believe that there is an urgent need to strengthen and extend our research training effort—to improve the number of PhD students graduating from our universities. We as a nation are languishing behind in this area.

While Australia has 7.8 PhD-holders for every thousand in the workforce, our global competitors are doing a lot better. Canada boasts 8.2 PhDs per thousand, but Germany and Switzerland both have well over 20 per thousand.

To compete in the world marketplace, Australia needs to lift its game.

Labor will be announcing a series of measures that we will introduce to build a stronger performance in research training and the output of higher degree graduates.

Conclusion

Labor supports the overall objectives of the Budget measures contained in this Bill.

However, these welcome improvements come at the tail end of eleven years of callous neglect of our university system, and of the students within it, by this Government. This bill is welcome and will be supported, but it cannot mask the historical attitude of this Government to the university sector.

I move the second reading amendment standing in my name, which has been circulated:

At the end of the motion, add “but the Senate:

(a)

welcomes the extension of eligibility for Austudy payments to students undertaking Masters degrees and the expansion of eligibility for Rent Assistance to all Austudy recipients;

(b)

notes that these measures come after more than 11 years in office, during which time the Government has made it more difficult for Australian students to go to university, demonstrated by the fact that:

(i)

the cost of a university degree has increased by between $7 500 and $30 000;

(ii)

there are now more than 100 university degrees costing more than $100 000, and

(iii)

since 1996, the Higher Education Contribution Scheme (HECS) debts have nearly tripled from $4.5 billion to nearly $13 billion;

(c)

notes the findings of the Australian University Finances 2006 report which revealed:

(i)

nearly 42 per cent of all full-time undergraduates and nearly 33 per cent of full-time postgraduate coursework students had a total annual income of less than $10 000;

(ii)

full-time postgraduate coursework students had the highest rate of rejection for Youth Allowance, the highest rate of dependence on a partner, and the highest level of debt, and

(iii)

female students are more likely to rely on free or subsidised services provided by universities and student associations and believed they would be less able to afford these services if they were not subsidised;

(d)

notes the Government’s dismissive and out of touch attitude towards these findings, in particular, the labelling of the survey of nearly 19 000 questionnaire responses as ‘anecdotal’, for suggesting that students should be more ‘frugal’ with their finances, and for saying that the HECS system is ‘generous’; and

(e)

condemns the Government for failing to adequately meet the genuine income support needs of Australia’s university students over its period in office”.