Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Hansard source

I rise to speak on the Social Security and Other Legislation Amendment (Income Support for Students) Bill 2009 and I foreshadow that I will be moving substantive amendments in the consideration in detail stage. It is my hope that the government will seriously consider these amendments as they will go a long way to fixing some very serious flaws in what could otherwise be a worthwhile set of reforms to our youth allowance system.

The coalition supports improvements to the way that youth allowance is targeted. As the Deputy Prime Minister has pointed out on more than one occasion, some of the reforms in this bill are ideas which I called for in March as shadow minister for education. But there are two fundamental flaws with this bill which cannot be allowed to stand if the opposition is to provide its support. It is to these issues that I will immediately draw the attention of the House before discussing some of the broader issues in the bill.

First, this legislation is retrospective in its application and effect. It is fundamental to our social contract that governments do not move the finishing line halfway through the race. In relation to this legislation, tens of thousands of students who finished year 12 last year spoke to a range of government employees—teachers, career advisers, Centrelink officials and the like—and were advised that by fulfilling the workforce participation criteria throughout 2009 they would be eligible to subsequently gain youth allowance as independents.

These students made significant decisions about their life and study plans on the basis of this advice stamped with the Australian government crest. Tens of thousands of students deferred their studies, as students have done every year, in order that they might fulfil the requirements to obtain youth allowance as independents and therefore fulfil their higher education dreams. The 2009-10 budget came as a rude shock to over 30,000 such students who were told that, having arranged their lives around the demands of the government, they would no longer be eligible to receive youth allowance after the end of this year.

The second critical problem with this legislation is that it fails to appreciate the barriers faced by students from rural and regional Australia in accessing higher education. Instead, the government’s changes exacerbate rural disadvantage. Today, on the very day that many year 12 students are beginning their exams, the Deputy Prime Minister is demanding that we pass legislation that will make it impossible for thousands of those same students living in rural and regional Australia to gain youth allowance and achieve their dreams of higher education. The Deputy Prime Minister’s cruel dismissal of the needs of rural students has been haunting year 12 students since the budget.

The abolition of the workforce participation route for youth allowance eligibility as an independent will make it harder for thousands of young people from rural and regional families to go to university. Young people in rural and regional Australia have to move to the city if they are to pursue further study and are not necessarily able to rely on financial support from their parents—even if their parents’ income or assets mean that they are ineligible for youth allowance under the parental means test. Students from farming and small business backgrounds in the country are often ineligible to receive youth allowance as dependants because the value of the average Australian family farm is significantly higher than the level of assets allowed under the test. However, the average Australian farming family cannot afford the tens of thousands of dollars required to support their child’s move and their accommodation and living expenses while studying at university. Compare that child from the average Australian farming family to a child from an average Australian metropolitan family. The parents of the average student in the city will be likely to earn more than the average Australian farming family. However, as their parents will not own an asset such as a farm, the city student will be eligible to receive youth allowance, even though the student is able to live at home while attending university.

The minister’s claims that this legislation is all about access and equity are clearly absurd. Because this significant cohort of students from the country are ineligible to receive dependent youth allowance, thousands every year currently gain eligibility for independent youth allowance under the workforce participation criteria. This means that they have to earn $19,532 within an 18-month period, which most do during a gap year. This is the criterion that will be abolished by this legislation. These changes fly in the face of the government’s claims that they are interested in increasing higher education participation from all sections of the community. They will in fact be actively discouraging rural and regional students from attending university.

The minister is on the record accusing me of seeking to reduce student entitlements—she calls it the Pyne plan. The only side of this debate that is seeking to rip youth allowance away from students is in fact the government. This legislation represents the Gillard garrotte, tightening around the necks of tens of thousands of students whose only crime has been to have aspirations of achieving a higher education and a career in the field of their choosing.

Coalition members’ offices, particularly those in rural Australia, have been deluged with concerns from young people and their families, whose distress has been made worse by the Deputy Prime Minister’s indifference to their plight. Hundreds have written their personal stories on the coalition’s Education for Australia web site. I will read just two for members’ information, but all members are welcome to read more for themselves, as I am sure the member for Lindsay will do, at educationforaustralia.com.au. Mikaela Horne, in South Australia, is a prime example. She writes:

As a year 12 student living in Eyre Peninsula, I have been studying hard all year as I would like to obtain qualifications from university next year. I plan to then come back and work in a rural town. I’m extremely disappointed to hear that to receive independent status to qualify for the highest youth allowance I would have to work a staggering 30 hours a week or have to defer … university education or give up … future ambitions altogether. Realistically I couldn’t do this in Adelaide while studying a Uni course as they are a 40 hour a week commitment depending on course type. I feel a large amount of rural students would be in the same situation as myself and it’s not acceptable. Discrimination of any form was ‘supposedly’ abolished many years ago so why is it that rural students, who are already at a disadvantage when it comes to Uni education compared to city students are being penalised for yet again?

And she concludes:

Answer me that Ms Gillard!

From a parent’s point of view, Di Williams, of Dunsborough in Western Australia, spoke for thousands of mothers when she wrote:

Please reject the new Youth Allowance scheme for rural youth. Our daughter is year 12 now at Georgiana Molloy Anglican School, she is studying for her TEE and has her heart set on a gap year and entering University 2011. Working and earning the old youth allowance during the gap year. With this new Youth Allowance scheme there is no way she will be able to work 30 hrs per week within the 18 month time frame, unless she works 2 or 3 jobs per week which in our area Dunsborough is not easy to do. 3 hrs southwest of Perth, rural WA. If the government allows this for this change to happen there will be a lot of local students vying for jobs in a small area that will not be able to meet their needs. The students will not be able to move to Perth or another area for work as cost would be too high, not only financially but emotionally. It is bad enough they cannot stay at home and attend university without then having to leave earlier to gain the employment. With the 18 month clause - that is ridiculous - if they wish to attend university in 2011 after 1 year gap, then they should be working 30 hrs per week now … Only a few courses will let you defer 12 months, let alone 18 months. Accommodation on campus would be very be hard to find mid year. Please make the government be aware that they are penalizing the youth of rural areas when they should be trying to help rural youth become the future leaders, doctors, lawyers, business people our country needs without asking for overseas professionals to fill the gaps in our society.

It is worth noting that it has not just been coalition members who have been receiving this sort of response from their constituents and raising these concerns in the public domain. We have been joined by the Greens, Family First and Independents in both the Senate and the House of Representatives. The Deputy Prime Minister is isolated in her stubborn refusal to see that her legislation is retrospective and that it unfairly discriminates against students in rural and regional Australia. Even those on her own side of politics and in her own state—the Labor Party in the Victorian state parliament—have been scathing about these changes. The Victorian parliament’s Education and Training Committee is chaired by the Labor member for Ballarat East, which is in the federal member for Ballarat’s electorate. In that committee’s recent report into this issue, that same Labor member, Geoff Howard, wrote in his introduction that the committee:

… is concerned that the specific circumstances of rural and regional young people still have not been adequately addressed. Already, many such students defer their studies to meet eligibility criteria for income support and this route to financial independence is set to become even more difficult under the new system.

That is a Labor member of the Victorian state parliament writing this. It is not a coalition member writing this but a Labor member who is the chairman of the Education and Training Committee. This report—by a committee controlled by the Labor Party, let alone chaired by a Labor member—was supported by members from both sides of the Victorian Legislative Assembly including Liberals and Nationals. In a particularly scathing passage, the committee argued:

… the Committee believes that the removal of the main workforce participation route will have a disastrous effect on young people in rural and regional areas—

and that the changes:

will have a detrimental impact on many students who deferred their studies during 2009 in order to work and earn sufficient money to be eligible for Youth Allowance.

I will be fascinated to see what the Labor members of parliament who intend to speak on this bill have to say in answer to a clear and direct criticism from one of the members of their own tribe in relation to these changes.

This report confirms the point that the coalition has been making since the budget: the Deputy Prime Minister’s changes will suffocate many students’ dreams of a higher education. There is not a political party in the land that has not expressed severe concerns about the way that the government is seeking to abolish the workforce participation criteria for gaining Youth Allowance without providing any sort of alternative route for those students from rural areas who are now unable to access Youth Allowance. Actually there is one route the minister is leaving open to these students: the ridiculous 30 hours per week for 18 months option. As many members have identified, this is not a serious option at all. It is sheer nonsense to think that students who have just graduated from year 12 and have been accepted into university will then be able to defer their studies for 18 months and find a full-time job in communities where much of the work is seasonal.

The Deputy Prime Minister is aware of these two problems. Indeed, in August, having maintained for three months that these student concerns were just some hysterical reaction to an alleged fear campaign, she held a press conference in this building and, in a rare moment of self-awareness, admitted that she got it wrong. Having admitted her mistake, the Deputy Prime Minister should have fixed it and then we could have moved on. That could have been the end of the matter, and the remainder of these Youth Allowance reforms, which the coalition supports, could have passed easily with bipartisan support. Instead the government announced half-baked amendments which will only provide a stay of execution to a small fraction of the students facing the Gillard garrotte, and it is only for those students who are beginning university in semester 1 next year.

I ask the House to think about the logic of this for a second. The Deputy Prime Minister admitted there was a problem with rural disadvantage in her legislation that needed fixing and so she extended the date for remote students to gain access to the gap year provision by six months. This will help 4,700 students who are currently in their gap year, but the government’s half-baked backdown does nothing for rural students into the future. It does nothing to help rural students sitting their year 12 examinations today, let alone the rural students today in years 8, 9, 10 and all students in the future. It does nothing for these people. Similarly, the Deputy Prime Minister admitted there was a problem with retrospectivity, that it was unfair to change the rules for students who had already made their plans and commenced their gap years. However, her changes will help fewer than 5,000 out of the 30,000 students who find themselves in the position in their gap year of facing retrospective changes that move the goalposts midway through the game. If the minister were serious about addressing rural disadvantage, she would be fixing the problem for all rural and remote students into the future, such as those starting their year 12 exams today. If the minister were serious about removing the outrageous retrospectivity of her legislation, she would be fixing the problem for all students, not just those living more than 90 minutes from their campus.

The coalition will be moving and supporting amendments to remove the retrospective aspect of the legislation. We have already announced our policy to provide scholarships to students from rural and regional areas who are ineligible for Youth Allowance but whose financial circumstances are preventing them from accessing higher education. We encourage the government to take on board these sensible and fair policies.

I note that the member for Bendigo has entered the House of Representatives chamber, a member who does represent regional Australia, a member who must have heard from constituents in his own electorate about the unfairness of the government’s Youth Allowance changes, a member who has probably found that the Gillard backdown has probably not helped anybody in his electorate of Bendigo because they do not live more than 90 minutes from a university campus. He is a member who is facing the exact scenario that I have outlined for rural students whose dreams of higher education have been dashed by the Deputy Prime Minister’s changes to Youth Allowance.

Unlike the member for Lindsay, who represents a metropolitan electorate and can in a very blase fashion dismiss the concerns of rural and regional youth, the member for Bendigo does not find himself in that luxurious position of being able to do that. I will be fascinated to see whether the member for Bendigo, the member for Ballarat, the member for Flynn, the member for Capricornia or the members for all the rural and regional seats who mistakenly voted for the Labor Party at the last election are prepared to stand up for their constituents.

I would point out to the House that the opposition moved a motion in the parliament in the last sitting fortnight calling on the government to recognise its mistake and its error in respect to the reforms to youth allowance that disadvantage rural people. I am sad to say the member for Bendigo, the member for Ballarat, the members for Flynn, Dawson, Capricornia and other rural seats, the member for Hunter and many others voted that motion down rather than allow it to be debated. They voted against the interests of their own constituents and voted against the interests of the people who put them here in parliament to represent them. I say that more out of sorrow than anger because, in fact, I would appreciate it if they would stand up for their electorates, for their constituents and for their families who had dreams of their children achieving higher education that have now been dashed by the Gillard garrotte.

I might even stay in the House to hear the member for Bendigo’s speech if I can stomach it. But, of course, I anticipate that he will not vote for the opposition’s amendments because he will do exactly as he is told by the factional bosses of the Labor Party, as will the member for Lindsay, who is a factional boss himself. I see the member for Newcastle has also entered the House. It is becoming a veritable welter of rural and regional members from the Labor Party coming in. I call on the member for Newcastle to stand up for her constituents, families and young people, who will be garrotted by the Gillard garrotte in these youth allowance reforms.

To maintain budget neutrality, the coalition has suggested a reduction in the rate of the new start-up scholarship. This is a new scholarship that no students are currently receiving and is paid in a lump sum at the beginning of each semester. This change will not affect the proposed fortnightly payments to students by even one dollar, despite the spin and falsehood in the minister’s press releases. Under the coalition’s amendments, all students on youth allowance will be better off, receiving for the first time ever a $1,000 start-up scholarship. No student currently on their gap year, preparing to enter university next year and claim youth allowance, will have the rug pulled out from under their feet. Rural and regional students need to be provided with a clear route to university, and the savings measures we have suggested will provide ample funds to assist all these students.

Other aspects of this bill meet with support from the coalition. One reform that will not catch too many headlines, but which will be particularly appreciated by many in the higher education sector, is the exemption of merit based scholarships from the income test under social security and veterans’ entitlements legislation. We commend the government for this measure. We also support the increase in the personal income test threshold, the extension of youth allowance to students enrolled in masters by coursework programs and the relaxation of the parental income thresholds. But in improving some aspects of the youth allowance framework, the government has created barriers to thousands of other students from rural Australia. It is bad policy to fix one perceived inequity by replacing it with a new gross injustice.

This legislation is currently under consideration by a Senate committee. When that committee reports at the end of the month, I urge the Deputy Prime Minister to take the opportunity to reconsider her position on the two flaws within this legislation. If she does not like the opposition’s suggested savings measure, we are open to the idea of supporting alternative savings measures. But in order to receive coalition support for this legislation, two things need to happen. Firstly, the government must remove the retrospective elements of the bill. Secondly, they must address the issue of rural and regional disadvantage in a serious manner.

I would point out to the House that because of the government’s legislative agenda and because the bill abolishing Commonwealth scholarships that were already in place has already been passed by the House of Representatives and the Senate, the minister has put herself in a russian roulette position where, if this bill fails to pass the Senate at the end of this year because of the opposition and Greens opposition to the retrospective elements in the bill and the entire new scholarships program fails to be passed, she will be responsible. She will be responsible for denying Commonwealth scholarships—the start-up scholarships—of at least $1,000 a year to every single student who would have received youth allowance from 1 January. We are playing for high stakes. The opposition is absolutely clear-eyed about its opposition to the retrospective elements of this legislation.

If the minister will sit down with us and talk about how to remove those retrospective elements and talk about how to make sure it is revenue neutral with whatever measures she proposes or if she wishes to adopt the measure that we have proposed, we are prepared to sit down in good faith—there is a lot of good faith going around at the moment—and negotiate with the government. On the other hand, if she insists that the opposition’s amendments not be agreed to or not even discussed then it will be on her head if, on 1 January, every person who is receiving youth allowance is denied a scholarship under the government’s new legislation. The opposition makes that absolutely clear.

I warn the government today, as I have since the budget, that the opposition are absolutely determined to stand up for rural and regional students and we are absolutely determined to stand up for students who are in their gap year and have seen the finishing line changed on them halfway through the race. It is offensive and we will not support it. I would recommend that, when the consideration in detail stage occurs, the government take very seriously the amendments that we have put to the House.

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