Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Link to 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”.

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

The purpose of the Social Security Legislation Amendment (2007 Budget Measures for Students) Bill 2007 is to amend three acts: the Student Assistance Act 1973, the Social Security Act 1991 and the Income Tax Assessment Act 1997. The measures contained in the bill enhance the delivery of income support for students and provide a significant benefit to students and their families at a cost to the budget of $135 million over four years. These measures demonstrate the importance that the Australian government places on ensuring that all Australians, regardless of age, location or background, have the opportunity to participate in education and training and contribute to the nation’s continued prosperity. The Australian economy depends on its most precious and important resource: its people. A well-educated and skilled population increases workforce participation and allows every Australian to make a contribution to the broader Australian community. In closing, I would like to thank my colleagues on the Senate Standing Committee on Employment, Workplace Relations and Education for their inquiry into this bill. I note that all parties represented on the committee supported the passage of the bill. I commend the bill to the Senate.

Natasha Stott Despoja (SA, Australian Democrats) Share this | Link to this | Hansard source

I am keen to speak to the Social Security Legislation Amendment (2007 Budget Measures for Students) Bill 2007 because it has been a long time coming. It is a bill that the Democrats support and commend the government for, albeit belatedly. This bill implements some of the student income support measures contained in the last budget, including—and most importantly, as far as the Democrats are concerned—extending rent assistance to Austudy recipients and allowing certain postgraduate students to access Austudy and youth allowance. We welcome the changes, particularly the extension of rent assistance to Austudy recipients. It is something that I, along with some others in this place, have campaigned for for many, many years. Combined with other student income measures in the budget, these measures constitute a $222 million increase for student income support over the next four years. This is well overdue.

As has been highlighted on page 5 of today’s edition of the Australian, a number of backbench members of the coalition pointed out that debt levels for Australian students are high. We also have to recognise that the affordability of education has plummeted in some ways. HECS fees have increased substantially and the introduction of full-fee degrees has further entrenched a user-pays system in this country. Across the country, students and graduates owe a grand total of $12.9 billion to the government. More than 2,000 Australians have individual debts of $40,000 or more. In 1997, the Howard government raised the age of independence for income support to 25, after the Keating government had implemented a gradual reduction in that age, lowering it to 22. In 1999, the Prime Minister promised that there would be no $100,000 degrees under his watch. Now we have more than 100 degrees that cost more than that amount and some that cost around $240,000. That is massive. In 2006, 30,200 domestic students paid full fees for their undergraduate degrees, more than double the amount in 2005. The practice is expanding. This year the government brought in legislation that theoretically allows universities to establish full-fee only courses.

All of these skyrocketing costs for students occur against a background of the rising price of essentials in the broader community, such as petrol, food, rent et cetera, leading to a rise in financial stress among the student population. If anyone doubts that, you only have to look at the recent report of the survey by Universities Australia: Australian university student finances survey 2006. According to this report, one in eight students regularly goes without food or other essentials because they cannot afford them. The average number of hours worked by full-time undergraduate students is now 14.8 hours per week. There has been a suspicious decline in the proportion of full-time undergraduates receiving youth allowance or Austudy, from 42.4 per cent in 2000 to 35.2 per cent last year. I cannot believe it is due to a lack of demand. Other studies have shown that the cost of tertiary education is a significant barrier to rural students, with 47 per cent indicating that it would be difficult for them to support themselves at university.

This state of affairs is clearly not in the interests of individual students. If students are worrying about their finances and not being able to afford food or other essentials, or they are working significant hours each week, their studies are highly likely to suffer. That is not in the national interest. Our country is going to depend on highly skilled workers to remain internationally competitive into the future. How can you be focused on the economy on the one hand but allow a system to develop where the employees of tomorrow reject tertiary study due to cost or have education distracted by their financial considerations? What does it say about the future workforce if entry into university is going to be increasingly determined by your wealth rather than your merit?

I am sad that this is an area where the government has not been more active. While the two key measures in this bill today are an improvement, they represent government outlays of $86.9 million and $43.3 million respectively spread over four years, so it is a relatively small amount in the context of the higher education budget, and these two issues alone will not significantly address this pressing issue of affordability.

In 2004, as senators here would know, I initiated an inquiry into student income support through the Senate Standing Committee on Employment, Workplace Relations and Education. Its report was tabled in June 2005, albeit with the interruption of a federal election in the middle. It had 15 recommendations tailored to relieve student financial stress. The government still has not responded to this inquiry, so maybe this is a question to the acting minister today: when is the government going to respond? If the convention is three months, then we have well and truly passed that stage. It was due in 2005 and it is now September 2007—years later. It was the first inquiry to look solely at the issue of student income support. I think it is a clear breach of Senate protocol but, more importantly, it suggests to the sector and to the community—not just to students, aspiring students and graduates, but to Universities Australia and to other peak organisations—that the government does not care about this pressing issue.

I said repeatedly in this Senate this week, when we were discussing the Higher Education Endowment Fund, we know that this is a key indicator in ensuring that people can participate or enter into education at all levels, and higher education in particular. Student income support has to be adequate and it has to be accessible. We are familiar with what I perceive as a disregard shown by the government in this particular area of policy. But this is really a blatant example of disrespect for the particular issues. By the way, there were 140 submissions to that Senate inquiry.

There is much more the government could do to address some of these issues and obviously we do not have time today to address those. All scholarships could be tax-free. I know that Universities Australia and other groups would acknowledge that. There could be a reduction in the age of independence, ideally to 18, or 21 or even 22, which is where the Keating government was at. It is still quite arbitrary in how we define eligibility for adult versus other benefits. There is plenty of legislation, social security legislation, where you are defined as an adult at the age of 16 if it saves money for government, but it does not seem to work the other way when it comes to being eligible for payments, particularly payments that would actually assist you. We should be considering education as an investment in the future, not a cost. The rate of Austudy and youth allowance could be pegged to a level equivalent to the Henderson poverty line. There are a range of measures and of course I do refer to and recommend that Senate inquiry report.

The Democrats have long argued for and believed in an equitable and well-funded higher education system, and we certainly oppose—and have for a long time—this increasing shift towards deregulation of the sector and an additional reliance upon private funding. I hope that the government does not think that these measures are enough in themselves. This is not an attempt to fob off students and others before an election. I do not just mean students; I mean the broader community. I think that there are serious issues out there that have to be addressed by the government in relation to university study.

Judging by the remarks that I saw in the paper today, I think from Dr Mal Washer and others, these are concerns that are held across the political spectrum. To paraphrase one of the comments I read this morning, that was something along the lines of, ‘Why do we have this booming economy and yet we have so much debt?’ It is not right that our future students, graduates, the skill set of tomorrow, are being burdened with such massive individual debt—the size of a mortgage is needed in order to access education—especially when theoretically through a progressive taxation system people should be repaying their money into government coffers and contributing to the community.

This bill is important and these measures are essential, but there are a broad range of other measures, a suite of reforms, that have to be introduced to address this issue and, once again, I appeal to both sides of parliament to consider these issues. It is not just the government; there is also an aspiring government here and I would not mind hearing a bit more detail from them about what they propose when it comes to student income support as well.

Question negatived.

Original question agreed to.

Bill read a second time.