Chris Bowen (Prospect, Australian Labor Party) Share this | Hansard source

The primary purpose of the Student Assistance Legislation Amendment Bill 2005 is to shut down a loans scheme for tertiary education students that the Howard government closed administratively in December 2003. Labor opposed the closing of this scheme administratively, and we will be opposing this bill—just as we opposed a similar bill which was introduced in this House in October 2003.

The Student Financial Supplement Scheme was introduced in 1993 by the Keating government to provide flexibility to students who were in need of extra cash to undertake their studies. The Howard government did not proceed with the bill to scrap the Student Financial Supplement Scheme, as it could not muster the numbers in the other place. This bill is a consequence of the government achieving a majority in the other place. The government, as I said, then closed down the scheme, using its administrative powers.

The Student Assistance Legislation Amendment Bill 2005 amends the Student Assistance Act 1973 and the Social Security Act 1991 to make it clear that a student cannot apply for assistance under the Student Financial Supplement Scheme under either act after the commencement of this bill. Under this bill, those with outstanding loans from the now defunct scheme will only have them grandparented until 30 June this year. From this date the repayment thresholds and rates of repayment will be much more onerous than those under the previous scheme and those under which the loans were offered and accepted. The government is once again seeking legislative approval to dismantle this loans scheme, using its majority in both houses. This is an opportunity for some senators in the other place to show some of their new-found independence and stand up for students, particularly in regional areas, who are in need of financial assistance to stay viable as university students.

I was interested to hear the contribution from my colleague the member for Lingiari, talking about the particular needs of students in rural and regional areas. He is more qualified than I would be to comment on that. It is true that rural and regional students have two particular causes to be upset about this legislation. Rural and regional areas have two particularly big problems when it comes to tertiary education. Many regional areas still suffer from very high unemployment, and high youth unemployment in particular, and the availability of part-time work is not as rosy as the government would have us believe for university students. And of course many students from rural and regional areas move to capital cities to study, as the member for Lingiari quite rightly indicated, with all the associated costs of city accommodation and living.

As I say, this is a golden opportunity for Senator Joyce and Senator Nash to exercise some of their new-found independence and to stand up for students from rural and regional areas. Let them stand up for students who are being affected by the closure of this loans scheme and put the needs of rural and regional students—and not the needs of their coalition partners, the Liberals—first, as they say they will. The member for Lingiari pointed out that it is an opportunity for members of the National Party—an opportunity not for the National Party in its entirety but for individual members of the National Party—to show some of their independence and to stand up for rural and regional students.

Of course, it is not only rural students who are badly affected by the abolition of this scheme. The government’s rationale for the abolition of this scheme is that it was introduced in 1993, when there was high youth unemployment. It says we have low youth unemployment now and it is no longer necessary. I have a newsflash for the government: there is not low youth unemployment throughout every single part of Australia. There are places where youth unemployment is still very high, and I happen to represent one of them. The unemployment rate in the Liverpool-Fairfield area, the statistical district which covers my electorate, is 7.3 per cent, but the teenage unemployment rate is 17.4 per cent. Yet this government says this scheme is now unnecessary because it is easy to get part-time work. Come to Prospect and see if it is always easy to get part-time work. Of course some students get part-time work—they work very hard for it—but it is not always easy to find part-time work which matches the needs of your tertiary education.

Students in my electorate go to a range of universities. Some of them go the University of Western Sydney. Many others of them go the University of New South Wales, the University of Wollongong, Macquarie University or the University of Sydney. But there are particular travel needs. I know of students in my electorate who attend the University of Wollongong and drive two hours a day to get there because that is the only university which offers the courses they wanted to pursue. They need to balance that with part-time work, and many of them do, but it is very hard to find part-time work which matches the needs of your tertiary studies.

This scheme which the government is abolishing had some flexibility about it. This was not only about grants and it was not about giving students and easy ride; it was about providing them with some flexibility, giving them a chance to balance their tertiary studies with their part-time work and with their other commitments. After all, we are encouraging young people to undertake tertiary education. We are meant to be going down the highroad of high technology and higher education and encouraging young people to go to university, yet this government is abolishing this scheme which provides the flexibility for tertiary students. Under this scheme which the government is abolishing, students were able to receive income support and to trade in $1 of grants for $2 of loans, increasing their income by up to $3,500 a year. That may not seem a lot of money to us, but it is a lot of money to a struggling university student. $3,500 a year can make the difference between continuing studies and having to give them up. That is the reality.

As I say, this provided options in balancing study with employment. Students who were ineligible to gain access to income support and whose parents earned less than $64,500 a year were able to access a category 2 loan of up to $2,000 a year. The scheme did fill a vital need for students requiring additional income support and provided an extra option for students to suit their individual circumstances.

This bill not only closes down this scheme but also increases the repayment thresholds for people who already have loans under the existing scheme. For somebody on an income of around $44,000, for example, the rate of repayment will move from two per cent of their taxable income to 4½ per cent. For somebody on $65,000, the rate of repayment will shift from four per cent of taxable income to 7.5 per cent. I simply make the point that these are not the conditions that were agreed upon when these loans were entered into. People entered into these loans with an agreed rate of repayment. The government are by legislative fiat now doing something which they could not do administratively. They could close down the scheme administratively, but they could not increase the rates of repayment administratively, and now they are doing that. For some people, that will be quite sustainable. Some people will not have problems with those increased repayment rates, but others will. These new thresholds are in line with the repayment thresholds of the government’s new loan scheme, the Higher Education Loan Program, otherwise known as the HELP scheme.

It is worth noting that the impact of the abolition of this scheme is not just that students have had to take on more part-time work or a second or third part-time job. I stress that the government might want us or the public to believe that this is about forcing students to take a part-time job so they pay their way through university. In many cases it is about forcing students to take on a second or a third part-time job to pay their way through university. They are already doing one job, already struggling with that, already working at McDonald’s or Pizza Hut or doing some tutoring at university. In some cases they are now being called upon to take a second or third job.

There is ample evidence to suggest that the impact of the government’s policy is that there have been people who wanted to study, wanted to increase their skill levels, but have been unable to because it has simply been financially unsustainable. When the abolition of this scheme was mooted in 2003 the Australian Vice-Chancellors Committee commissioned a report entitled Paying their way, which surveyed 35,000 university students and found that students were very positive about the scheme and that the scheme was necessary for many individuals to stay at university as well as supplementing their income from part-time work.

Another study also supports this, and this is not a study done by the Labor Party or done by the Vice-Chancellors Committee. This is a study commissioned by the Australian government, by the Department of Education, Science and Training. It is a study which the then minister sat on for some 12 months and refused to release. I could understand his reasons when I looked at the results. This report shows that a third of the respondents seriously considered ceasing their enrolment at university in order to earn more money, and a quarter of students indicated that they chose their classes to suit their work commitments rather than the other way around.

This bill is symptomatic of the government’s approach to higher education generally. Under the new FEE-HELP loan debt scheme, student debt will blow out to $3 billion by 2008-09, with up to 60,000 students incurring such a debt. These FEE-HELP debts are all about contributing to the payment of full fees, which might be as high as $210,000, as in the case of a medical degree at the University of Melbourne. I note that the existing legislation allows up to 200,000 students to access FEE-HELP places, with the government’s Senate majority allowing it to push these figures higher if it so desires. Of course, the national HECS debt has risen to over $13 billion. The government is cashing in from students and families to the tune of an additional $839 million over the next four years with the recent 25 per cent increase in HECS.

In 2003 the then Minister for Education, Science and Training—now the Minister for Defence—said this:

What that means in real terms is that the HECS charge for most courses in most universities will not change at all.

Of course, he could not have been more wrong. Never has student debt been as high and as large a burden for students as it is now. And never has it had the effect on living standards that it is having at the moment. Forcing students to take loans that are the equivalent of small mortgages is the reality that this government has forced upon people in the tertiary education sector. That is the reality. The government is forcing people to take mortgages to pay for their higher education.

Australia already has 60 university degrees which now cost more than $100,000. Let there be no misunderstanding: Labor introduced HECS and it is one of our proudest achievements. It is appropriate that people who benefit from tertiary education make a contribution to the cost. What is completely inappropriate is this government introducing punitive rates of repayment and punitive fees—including fees of up to and over $100,000 for over 60 university degrees around the country.

The accumulated national HECS debt in 2005-06 is a staggering $13.3 billion. The average graduate owes the government nearly $10,000. Departmental figures indicate that 91 per cent of students actually owe up to $20,000. Following the recent spate of across-the-board 25 per cent increases in HECS fees, students commencing university this year are paying up to $30,000 or more for their university degree compared to a decade ago. The Howard government’s HECS hikes mean that medical students will pay more than $30,000 extra over the course of their degree, law students will pay an extra $20,000, and engineering students will pay $16,000 extra.

It is little wonder that we have seen quite a remarkable phenomenon in the last few years: the number of people starting university in this country has actually fallen. In 2002, 251,845 Australians commenced a university degree; by 2004, that figure had dropped to 239,115. Between 1995 and 2000, Australia had the second lowest increase in the rate of enrolment in universities in the OECD. The good news is that we beat Turkey; we actually achieved more than Turkey. The bad news is that the rest of the world beat us.

This is this government’s contribution to higher education. It is a turkey of a policy, and this government should be ashamed. It should be ashamed because, to succeed as a nation, we need to be encouraging people to pursue higher education—whether it be through universities or TAFEs, whether it be traditional academic subjects or more trades based subjects. We need to be better trained as a nation. And this government’s contribution to our economic growth and to the betterment of our tertiary sector is to reduce the number of Australians who are able to start a university degree. We are, I believe, the only nation in the developed world that spends more on its private school sector than on its tertiary education sector. I say that not to highlight how much the government spends on private education, but to highlight how little it spends on tertiary education.

As I say, we have seen the introduction by this government of full fee paying for university degrees. Full-fee paying students at universities across Australia can get in with entrance scores that are up to 18 points lower than normal HECS students. The Howard government has done nothing to regulate entrance scores for full-fee paying students. The maximum five-point difference rule in university entrance scores between HECS and full-fee paying students is an absolute joke.

Last year the then Minister for Education, Science and Training had some things to say about entry standards at universities. Dr Nelson, the then minister, warned university vice-chancellors to review their entry standards because some students, he said, ‘should not be at university’. He said, ‘It is obvious we still see in 2006 a significant number of people going into university who should not be. It goes without saying that the lower the tertiary entrance result, the less likely it is that the student is going to be academically equipped for the academic program.’ What a revelation from the minister! He and I are in the white heat of agreement on that. But where we do not agree is that it is quite clear that his policies have contributed to that problem. He was the one who introduced the policy that you can buy your way into university, despite the fact that you do not necessarily have the academic record to get into university.

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