Steve Gibbons (Bendigo, Australian Labor Party) Share this | Hansard source

It is always a pleasure to follow the shadow minister. Like all his contributions, this one was fact free and full of distortion and, dare I say, verballing. I welcome the opportunity to speak in this debate because the proposed changes to student income support in the Social Security and Other Legislation Amendment (Income Support for Students) Bill 2009 have generated considerable discussion in my electorate. Indeed, some weeks ago I attended a public meeting in Bendigo where it was clear that there are strongly-held views on this issue.

To understand the reason for these changes, I think it is important to remember the purpose of providing income support to students. The benefits of education to the individual and the community at large have become better understood in recent decades. Economists like the University of Chicago’s James Heckman, who won the Nobel Prize for economics in 2000, have been telling us for almost two decades that public spending on education and skills leads to higher rates of return on investment. Analysis of human capital by the Organisation for Economic Cooperation and Development suggests there are significant correlations between higher levels of educational attainment and both economic growth and improved physical and mental wellbeing. As the OECD said in 2006:

Evidence of the public and private benefits of education is growing. Application of knowledge and skills are at the heart of economic growth, with the OECD attributing half of GDP per capita growth from 1994 to 2004 to rising labour productivity.

Policymakers around the world now accept that investing in knowledge, skills and innovation is one of the best means available to ensure long-term economic prosperity and better work opportunities. Governments around the world have been increasing their focus on all areas of education, but particularly higher education. We see our universities as the engine rooms of innovation and economic and social progress. That is why we want to make it possible for every young Australian to access higher education or skills training. One of the legacies of the previous government was a confusing array of student financing arrangements, where each change added another layer on top of past mistakes, none of which advanced the important goal of educational equity.

In addition to being morally right, equity matters to national productivity. If rising educational attainment is going to make a major contribution to our future prosperity, it is no good limiting access to tertiary education to an elite who can afford it. This is now even more important as the global financial crisis brings new urgency to the debate. When the economic turnaround does come we will need to ensure that we are able to fill the increasing opportunities presented by an expanding economy. In past periods of economic growth we have done far too little to deliver the opportunities of growth to all Australians. We have left our own young people behind while at the same time complaining about shortages of labour and shortages of skills. We would rather take the expedient short-term route of enticing doctors and dentists, engineers and accountants from developing countries to come here than train our own. A developed society like Australia raiding less well-off countries for their scarce professional talent cannot be justified.

This time we must not repeat the mistakes of the past. We must lift our game on education and, in particular, on educational equity, and the Rudd government is determined to do so. Equity was at the core of the findings of the Bradley review of higher education. This is an important moral issue. Equality of opportunity always has been, and always must be, a central value of the Australian Labor Party and of the Australian nation. But it is also an economic issue. Without greater equity in our higher education system, Australia will not have the high-level knowledge and skills we need to compete with the most successful countries of the world.

Consider the situation in some comparable nations. In Australia, about 32 per cent of young adults have been to university. In contrast, Sweden has a national target of 50 per cent of people up to the age of 25 participating in higher education—a target they have almost achieved. The target in the United Kingdom is 50 per cent of those up to the age of 30 participating in higher education by 2010—and they are currently at 43 per cent. In Ireland, they aim to have 72 per cent of people with a tertiary qualification by 2015—and they are already at 55 per cent. Participation rates amongst disadvantaged groups in these countries have also increased significantly as a result of determined effort and the implementation of innovative programs.

Australia’s participation rates, however, have remained stubbornly static in recent years because we have not made the required effort. For the past decade, equity has not been a priority. The most seriously under-represented groups in higher education are those from remote parts of Australia, Indigenous students, those from low-socioeconomic backgrounds and those from regional areas. Today, a secondary student from a low-socioeconomic background is only about one-third as likely to attend university as a student from a high-socioeconomic background. And Indigenous people are still vastly under-represented. This is simply wrong. It should have been addressed a year ago and it now falls to the Australian Labor Party to do so.

The Rudd government is determined to rectify this appalling neglect and start the process of positioning our education system to be a major national asset for the 21st century. Part of this process is to simplify and improve our system of student income support. The reforms contained in this bill will mean that some 68,000 more students, including many from rural and regional Australia, will for the first time qualify for income support. A further 35,000 existing recipients of income support will now receive higher payments.

These changes will benefit many students in my electorate because many families in central Victoria earn lower incomes. Bendigo is ranked 132nd out of 150 electorates by taxable income and the average income is about $42,000 a year. Any student who receives at least a part payment of youth allowance can also receive a range of other support. This is of particular benefit to regional students and their families. These include: student start-up scholarships of $2,254 each year, relocation scholarships of $4,000 in the first year and $1,000 each year thereafter, and rent allowance. More students will now also qualify for youth allowance because the age at which they are considered to be independent from their parents will be reduced progressively from the current 25 years of age to 22 years of age.

Most of the concerns raised with me about the proposed changes have been about the changes to the independence test for the Youth Allowance, and I have duly conveyed those to the Deputy Prime Minister. But it is because the parental income test has been so low for so long that some students and their parents have come to think the independence test as the primary way to qualify for support. This was never intended to be the case. The independence test was targeted at students who had left home and were genuinely living independently from their parents. What has happened is that many students from more affluent families, encouraged by educators and in some cases government agencies, in private and other independent schools, have exploited the independence test to sidestep the parental income test. It has been said that they have been rorting that system. I do not agree with that. A lot of the advice families got was from Centrelink and tertiary and other agencies. You cannot blame them for that, but they were certainly exploiting it—there is no doubt about that. While they met the income criterion under the old rules, often by working in a gap year before taking up a university place, many were not really living independently from their parents. The Bradley review found that more than one-third of students who qualified for Youth Allowance in this way came from families earning more than $100,000 a year, almost one in five came from families earning more than $150,000 and one in every 10 came from families earning more than $200,000. The Youth Allowance was originally designed to help less well-off families give their kids a decent education. There is no way a family earning $150,000 or $200,000 a year can be described as less well-off.

The changes to the independence test rules are designed to stop this exploitation and direct more income support to those who need it most. There has been a considerable amount of misinformation and distortion from members of the federal opposition and the Victorian National and Liberal parties about these changes. Their scare campaign about one element, the workforce participation criterion for independence, did nothing to help parents and students understand how the changes would actually affect them. The proposed changes to the independence criterion would have meant some students would no longer qualify for Youth Allowance in this way. However, many will now qualify for a benefit through the increased parental income test. In working this out parents need to take into account all of the changes to student income support, and I encourage them to consult the many fact sheets that are available on the Department of Education, Employment and Workplace Relations website. There is also an online student assistance estimator to help work out the impact of the changes. Parents whose student children are not be eligible for Youth Allowance should also check if they qualify to receive family tax benefit part A, which has higher cut-out thresholds than student income support.

However, this government is not inflexible and has listened carefully to concerns about those students currently taking a gap year and who did so on the basis of the previous rules and the advice they were given at the time. It is clear that some—not all—of these students would have been disadvantaged during the transition from the old rules to the new rules. That is why, as the Deputy Prime Minister announced in August, students who are taking a gap year now and must move to attend university will now be entitled claim independent status for Youth Allowance until 30 June 2010. This change will mean students who left school in 2008 will still be able to apply for independent status under the current rules.

The government has always made it clear that its changes to student income support are intended to be revenue neutral. So to pay for this time extension of the current independence criterion, previously proposed changes to the amount a student can earn before affecting their youth allowance will be deferred by 18 months. Students are currently able to earn $236 a fortnight before their Youth Allowance payment is affected. This will now rise to $400 a fortnight from 1 July 2012.

The Rudd government is undertaking a thorough overhaul of the rules for student income support so that more students who need it most, including many from rural and regional Australia, will benefit. Labor has made the system we inherited from the Howard government much fairer to give some 68,000 more students from low-income families the opportunity of a university education. Of course, the opposition’s position on student income support has changed as often as their position on climate change—not to mention a whole range of other issues critical to this country’s future prosperity. We know that in 2003 the former Howard government opposed Labor’s proposals to reduce the age criteria for student independence to 23. But we also know that former Minister for Education, Science and Training Brendan Nelson supported means testing the Youth Allowance, saying:

The Final Report of the Youth Allowance Evaluation, released in May 2002, highlighted the broad community support that exists for parental means testing. It ensures that Youth Allowance payments are directed to those young people who are most in need of assistance.

Now we have an insight into the current opposition’s attitude towards young Australians from a speech in July by its deputy leader in the Senate, Senator Eric Abetz. Addressing the Australian Liberal Students Federation conference in Hobart, Senator Abetz accused people born after 1980 of viewing government as the solution to all their problems. Generation Y has an ‘entitlement mentality’, according to the senator. It is clear that some members of the opposition would rather see young Australians working two or more jobs to pay their way through university, as most American students are forced to do.

We saw further evidence that the opposition are the enemies, not the friends, of Australian students when, in the Senate’s last sitting, with Senator Abetz leading the charge, they voted down the government’s legislation to restore student services. This would have restored essential facilities and amenities for students and, despite the mendacious claims of the opposition, would not allow for a return to compulsory student unionism. When they were in government the coalition ripped $170 million out of university funding, resulting in the loss of vital health, counselling, employment, childcare, sporting and fitness services. As a result, universities have been forced to redirect funding out of research and teaching budgets to preserve at least some support services and amenities.

In his Hobart speech Senator Abetz spoke of his pride at campaigning as long as 30 years ago to strip away these services from students. Indolent spongers off the state, not interested in their own or the country’s long-term future, who do not deserve support while studying at university—that seems to summarise the senator’s view of young Australians today. If he and other like-minded members opposite had their way our university car parks would be full of the BMWs of wealthy students whose parents can afford to pay for their tertiary education. Well, that is not the Labor Party’s view, and it is not the view of the Rudd government. We believe in equity in education. We believe education is vital for the futures of all our young Australians, whatever their parents might earn. And we believe it is vital for the future prosperity of the nation that as many young Australians as possible have the opportunity to obtain a tertiary qualification. That is why we have reintroduced the proposed student services legislation into the parliament. And that is why we have introduced this student income support legislation. I strongly commend the bill to the House.

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