Stephen Smith (Perth, Australian Labor Party, Shadow Minister for Education and Training) Share this | Hansard source

The Social Security Legislation Amendment (2007 Budget Measures for Students) Bill 2007 gives effect to income support measures for students announced in the 2007-08 budget and updates aspects of the administration of Abstudy and the Assistance for Isolated Children schemes in line with similar provisions under the Social Security Act 1991. The bill extends eligibility for Austudy payments to some students undertaking particular types of master’s degrees and expands the eligibility for rent assistance to Austudy recipients. The bill also makes minor amendments to the act to bring processes for Abstudy and assistance for isolated children 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 total financial impact of the bill is $130.2 million over the forward estimates

Labor supports this bill. Labor supports this bill because for too long too many of our young people attending university have been doing it tough. Responsibility for this lies with the Howard government. In its more than 11 years in office, the Howard government has made it more difficult for Australian students to go to university. There are now more than 100 degrees that cost $100,000 or more. Under the Howard government HECS debts for students have increased by between $7,500 and $30,000. Since 1996, HECS debts have nearly tripled from $4.5 billion to nearly $13 billion and, according to figures from the Department of Families, Community Services and 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 adversely impact students from lower socioeconomic backgrounds. Most graphically, we saw a few weeks ago the release of the vice-chancellors’ final report on student finances, the Australian University Student Finances 2006 report by Universities Australia. This underlined just how difficult the financial burden of going to university is for many students. The report 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; and financial pressures are increasingly forcing full-time students into taking on multiple part-time jobs, undermining the whole of university life experience.

The report is an indictment of the Howard government’s neglect and complacency about the financial pressure university students are under. Showing just how out of touch the Howard government is, the response from the Minister for Education, Science and Training has been that students should be more ‘frugal’ and the government should not fund a ‘lifestyle’. Minister Bishop claimed that the report’s findings were flawed as the study was based on ‘anecdotal’ evidence and questioned the honesty of the students participating in the survey, saying, ‘I know what I 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, undermining if not eliminating the whole of university life experience.

The difficulties faced by young Australians trying to get an education were reinforced by the evidence presented to the Senate committee of inquiry into this legislation. The committee received seven submissions to the inquiry. Each submission was ultimately supportive of the legislation but each noted that the legislation did not go far enough. Universities Australia, for example, welcomed the measures, noting that they will provide better financial support for many students. Its submission argued, however, that the measures did not go far enough. 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 is exacerbated by an increasing number of students having their applications for youth allowance rejected or not receiving youth allowance at the full rate.

To support its case, Universities Australia provided the 9 March draft of its Australian University Student Finances 2006 report to the committee to support its argument that university students at all levels are increasingly faced with financial hardship. That 9 March draft report found that 40 per cent of full-time students and 33 per cent of part-time students believed the jobs they were doing were having an adverse impact on their studies, 22 per cent of full-time students and 33 per cent of part-time students regularly missed classes because they had to work and the number of students incurring a debt had more than doubled from 11 per cent in 2000 to 24 per cent 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’ incomes and assets.’ It also pointed out that the Social Security Act 1991 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 1998, 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, the NUS, and the Council of Australian Postgraduate Associations, the CAPA, welcomed the budget measures, as did university-specific student organisations. Both the National Union of Students and the Council of Australian Postgraduate Associations 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 poverty’. The NUS also 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 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 be raised to, and remain above, the relevant Henderson poverty line; and the age of independence be reduced to 18 years of age to bring it into line with most other measures of social and financial responsibility.

The council was also critical of the course eligibility provisions in the bill. The bill provides that only master’s degree courses required for entry to a profession or that exist as a result of a course structure will be eligible for income support assistance and that course eligibility will be at the discretion of the minister. The council 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.

I now move to the substance of the bill. The 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 the 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 an Australian apprenticeship full time. Currently, eligibility is restricted to students undertaking undergraduate courses and associate diplomas, to the exclusion of master’s degree level qualifications. The payments are subject to an income test and an assets test and do not currently include access to rent assistance. Rent assistance is a payment to assist those on income support to pay their rent, in addition to regular payments.

This bill makes two welcome changes to the Austudy allowance by extending eligibility to those undertaking some, but not all, professional master’s degrees and allowing all Austudy recipients to apply for rent assistance. As the Council of Australian Postgraduate Associations noted in its submission to the inquiry into this legislation, restrictions have been placed on the types of master’s degrees that would make students eligible for this support, limiting the impact of the measures. The bill provides that only master’s degree 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. This will have the effect of limiting the number of students who are eligible for income support. While Labor welcomes the extension of Austudy to master’s degree students, the government’s approach fails to address the genuine need in this area.

These measures are a welcome start to addressing the financial pressures facing Australian university students, but they are but a modest 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. This has occurred despite the Prime Minister’s promise that there would be no $100,000 university fees under his government. The recently published 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 two domestic full-fee university degrees that cost in excess of $200,000. 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, Science and Training, who believes that students should be more frugal, the Treasurer has described the present system as ‘generous’ and has pointed out that in the United States students fork 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.

Labor welcomes the announcement by Universities Australia to commission a study into equity and access issues for low socioeconomic students in Australia’s universities. Labor recognises that mounting student HECS debts can act as a disincentive to attending university, particularly for those from lower socioeconomic or battling backgrounds. That is why Labor has already announced targeted HECS relief in the national priority areas of maths and science.

Labor has also announced that it will give struggling 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. The scheme will allow students to trade in $1 of their income support payment—for example, youth allowance or Austudy—to obtain a $2 loan supplement, up to the value of $7,000, and repay the loan, without interest, once their annual income rises above a certain level. The Voluntary Student Supplement Scheme rewards students for agreeing to pay back the income support they would receive as a student when they achieve a higher level of salary as a graduate. 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 simply become too great and compromise not only the quality of their education but the potential future contribution they can make to the Australian economy.

On a technical matter, I have been approached by Melbourne University, which wrote to me expressing concern about one detailed aspect of the bill. The university said:

... the University welcomes the proposed extension of eligibility to students enrolling in professional graduate courses who would otherwise be significantly disadvantaged in terms of access to living support. This is an important equity measure. For this institution, the passage of the amendment will ensure students from disadvantaged backgrounds will enjoy eligibility in a new suite of Melbourne Model degrees from 2008.

However, the University has identified one significant issue with the current wording of the legislative amendment.

The Bill before the Parliament (Schedule 2, Clause 5) proposes a new provision in the Social Security Act 1991 in the following form:

“5 After subsection 569H(8)

Insert:

Level M courses

(8 A) A course for a degree of Master is a Level M Course.”

A literal reading of the proposed amendment to the Act may restrict the scope for Administrative Guidelines and Ministerial Determinations to extend support to students enrolling in professional coursework programs with a designation other than “Masters”.

This is an immediate and pressing concern. For example, Melbourne’s professional graduate entry Law Course is the Juris Doctor—the accepted design for law degrees at leading universities in North America and, increasingly, in many Australian universities offering graduate legal education. Likewise, the amendment as proposed could exclude students seeking support to study clinical professional graduate programs in the health and veterinary sciences areas. Again, consistent with emerging international practice, such programs are typically of three or four years duration, and offered as professional coursework doctorates—a Doctor of Medicine, Doctor of Dentistry, Doctor of Veterinary Medicine and so on.

The University understands, and discussion at officer level with DEST officers confirms, that it has always been intended that students enrolling in these degrees, providing they met the other requirements in the guidelines, were to be covered by this extension of support.

Despite suggestions at officer level to the contrary, the University has grave reservations whether, if the proposed legislation were to proceed in its current form, an administrative solution could be found that would enable such students to be covered.

I understand that the same representations have been made to the government and a similar request was also made to the government to amend the bill. Following this approach, my office consulted further with the university sector formally through Universities Australia, the Group of Eight and the Australian Technology Network of Universities, all of which advised that the proposal to amend the bill was sensible and would provide greater clarity. I therefore propose to move a substantive amendment along these lines to the bill during committee stage. I will be seeking to amend schedule 2, clause 5. The clause currently reads:

“After subsection 569H(8)

Insert:

Level M Courses

(8A) A course for a degree of master is a Level M course.”

My amendment will insert the words ‘or equivalent’ to change the definition of a level M course to:

“A course for a degree of master is a Level M course.”

That is a technical amendment, which, on the basis of my understanding, the government intends in any event for the bill as drafted to cover, and I hope the government will see fit to agree to it so as to ensure there is no doubt about these matters.

In conclusion, Labor supports the objectives of the limited budget measures contained in this bill. However, they come after more than 11 years during which the government has been either complacent about or neglectful of or has actively undermined our university sector. Labor believes universities and university students are an investment in our national productive and economic future. The restrictions on eligible courses mean that the bill does not go far enough in addressing the financial pressures faced by university students, and there is much more that needs to be done. To reflect these sentiments I will now formally move a second reading amendment in the terms circulated in my name and commend the amendment and the bill to the House. I move:

That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House:

(1)

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;

(2)

notes that these measures come after more than eleven 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;

(a)

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

(b)

there are now more than 100 University degrees costing more than $100,000;

(c)

since 1996, HECS debts have nearly tripled from $4.5 billion to nearly $13 billion;

(3)

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

(a)

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;

(b)

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

(c)

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.

(4)

notes the Government’s dismissive and out of touch attitude of 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

(5)

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

See this speech in context