Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Hansard source

I rise to support the Social Security and Other Legislation Amendment (Income Support for Students) Bill 2009. The Rudd Labor government is committed to higher education and to the vision of a stronger and fairer nation, and this bill is an integral part of that. This bill proposes wide-ranging amendments to income support arrangements for students. The measures are designed to increase income support for students who need it the most, making higher education more accessible for students from low socioeconomic backgrounds. In answer to the previous speaker, that is what I call being fair.

The government came to office promising to reform Australia’s education system. We recognised the central role of education, and particularly higher education, in meeting the challenges this country will face in the 21st century and beyond. We instituted a review of our higher education system, headed by Denise Bradley. In this year’s budget we responded to the problems and opportunities identified by the Bradley review process. This bill is part of that response. The bill will amend the Social Security Act 1991 to implement key recommendations of the Bradley review into Australia’s higher education system. It will do that by significantly liberalising the personal and parental means-testing arrangements that apply to payments for dependent students, apprentices and unemployed young people so that more low- to middle-income families can access Youth Allowance and Abstudy. It will change the criteria upon which a youth allowance recipient is considered to be independent.

The bill provides for new entitlement based scholarships for university students receiving income support payments. That will mean an annual student start-up scholarship and a relocation scholarship for eligible students. It will exempt merit and equity based scholarships from the social security income test, up to a threshold of $6,762 per year. The bill will also amend the Social Security Act 1991 to ensure that the training supplement, which commenced from 1 July 2009, is available to all intended recipients.

The measures in this bill cannot be separated from the challenges that the Bradley higher education review put before us. The first one of those goes to the matter of participation in higher education. Right now, Australia has a lower participation rate than many of our competitor nations. Even more concerning is the fact that, despite the expansion of the higher education sector, we also have low and falling rates of access to higher education among people from rural and regional areas, those from low socioeconomic backgrounds and those in the Indigenous community. These current participation rates are not going to serve our country well in terms of either our productivity and sustaining our standard of living in a competitive world or achieving the equity this Labor government thinks should be at the heart of our society.

As an example, as noted in the final report:

There has been an increase of up to 60,000 enrolments in the number of students from—

those three—

under-represented groups participating in higher education over the last decade. These increases are not even across the groups and some groups remain seriously under-represented.

It remains the case that a student from a high socioeconomic background is about three times more likely to attend university than a student from a low socioeconomic background. The current access rate for this latter group is at about 16 per cent and has remained relatively unchanged since 2002. If students from this group were adequately represented in higher education in proportion to their share of the general population, their access rate would be around 25 per cent, so there is a lot of work to be done in that area. Despite the low access rates, the success rate of students from low socioeconomic backgrounds is 97 per cent of the pass rates of their medium and high socioeconomic status peers. High pass and retention rates show that those from low socioeconomic backgrounds do succeed in higher education when they make it through the doors of our universities.

Denise Bradley’s vision for higher education is bold. The government has been equally ambitious in its response to the review. Earlier this year, the Minister for Education outlined the targets that the government wants to see achieved in this area and pledged to work in partnership with universities to meet those targets. The first target the minister set out was for 40 per cent of the 25 to 34 age group to have a bachelor’s degree or higher by the year 2025. We also want to see 20 per cent of students at our universities coming from lower socioeconomic groups in our society by the year 2020. This bill seeks to assist us in meeting those targets. This package of measures will increase the level of assistance payable to students and families and expand eligibility to support families who need it most. This improved support will ensure that students from low-income backgrounds are able to access the support that they need to share in education and training, including higher education.

The implications of the proposed changes on rural and regional students, especially those in my electorate in Central Queensland, are sensitive. Many rural and regional youth have worked or intended to work part time over an 18-month period after leaving school in 2008 in order to qualify for youth allowance or ABSTUDY as independent recipients. This is currently possible under the criteria that are used to establish whether a young person is self-supporting and should therefore have their qualifications for youth allowance assessed independent of their parents’ income.

The Social Security and Other Legislation Amendment (Income Support for Students) Bill 2009 includes a measure to remove the part-time work elements of the current independence criteria on the basis that this no longer provides an appropriate measure of self-support and results in poor targeting of student income support payments. However, those young people who completed secondary studies in 2008 and took a gap year in 2009 to commence university in 2010 and are required to live 90 minutes or more away from home to study will not be affected by the changes.

It was clear after the introduction of these measures that students who had graduated in 2008 felt that they had been unfairly treated. I am pleased to say that the government listened to the concerns of those students and found a way to help the 2008 graduates who opted to work through a gap year in 2009. The bill reflects the changes that were made in response to the concerns of those students.

Many rural and regional young people who may have expected that they could qualify as independent students in the future will in fact automatically qualify as dependent recipients under the more generous parental income test arrangements that will be introduced under this bill. Importantly, they will not have to rely on a working gap year to do so. As dependent students, rural and regional youth who need to move away from home to study at university will also benefit from the new demand driven Relocation Scholarship that forms part of the reform package, together with the annual Student Start-up Scholarship, which will be paid to all student income support recipients for each year of their university study.

It is clear from these measures that the parental income test changes and the new scholarships will particularly benefit students who have to move away from home to study, rural and regional students and students from low socioeconomic backgrounds, and that is why we made the changes. The Bradley Review of Australian Higher Education laid the challenge out before us. The analysis conducted or relied upon in the Bradley review found that student income support was poorly targeted. It found that 36 per cent of independent students living at home were from families with incomes above $100,000 per year and that many of those students were in fact living at home in metropolitan areas. The same survey estimated that 18 per cent of students in this situation came from families earning an income above $150,000 per year and 10 per cent came from families earning above $200,000 per year, yet those opposite continue to defend that very unfair system.

Under the previous system the parental income test was so low that many students sought to gain access to student income support as independent youth allowance recipients using that working gap-year method. As it turned out—and as we found out in the Bradley review—many of the young people who took that option were not actually financially independent of their parents. The government has decided to tighten the eligibility criteria for independence to ensure that support is available to those students who need it the most. The savings from this decision are able to be reinvested into increasing the parental income threshold, which will benefit over 100,000 young people and provide assistance for the families who need it the most.

Of course, under our scheme there will still be a mechanism for young people to establish their independence from their families if they wish to go down that route. Young people who have had employment of at least 30 hours a week for the past 18 months during any period of two years will still be considered independent, recognising that young people who have established this work pattern are genuinely self-supporting and no longer financially dependent on their parents.

The fact is that more rural and regional youth will qualify for student income support as dependent recipients under the changes to the age of independence and the liberalisation of the parental income test. Furthermore, many existing rural and regional youth allowance recipients will receive a higher rate of payment due to these changes. I note that the opposition continues to cloud those facts and insists on running a scare campaign and then comes in, in its contribution to the debate, and wonders why rural and regional students are telling their guidance counsellors that they are not taking up higher education options. It is not surprising when the coalition is so determined to run this misrepresentation and this scare campaign.

In order to ease the transition between the old and the new systems, up to 30 June 2010 young people who completed secondary studies in 2008—those who took a gap year in 2009, commenced university prior to 30 June 2010 and are required to live away from home to study—will continue to be able to attain independence under the second and third elements of the workforce participation criteria. I know that the young people in my electorate who contacted me with their concerns about the changes announced on budget night are very pleased to know that their plans are still on track and that they will be going off to commence their studies in 2010 having done what they needed to do under the old system to establish their independence.

Any university student who receives at least a part payment of youth allowance will also have access to a range of other assistance of particular benefit to rural and regional young people and their families. Dependent rural and regional students who have to live away from home to attend university may also be eligible for a Relocation Scholarship of $4,000 in the first year and $1,000 in subsequent years.

This package of reforms to student income support is directly in response to the recommendations and findings of the Bradley Review of Australian Higher Education. The package of reforms aims to increase access to and better target income support for students who need it most through a fairer and more equitable allocation of resources. We could not ignore the Bradley review, which found the old system to be completely inequitable and poorly targeted.

The reforms to student income support recognise the importance of ensuring that financial barriers to participation in education and training by students from low socioeconomic backgrounds, including those from rural and regional backgrounds and those who are Indigenous, are removed. This will play a great part in meeting the government’s targets, as I have already said, of 40 per cent of all 25- to 34-year-olds having a bachelor’s qualification by 2025 and really emphasising the participation of people from lower socioeconomic backgrounds in our higher education institutions.

I will give some examples of what this will mean, assuming these measures are passed by the Senate. A family with two children aged 17 and 19 living at home will receive a part rate of income support up to a total family income of just over $100,900, compared with the previous cut-off of around $60,000. That is a significant jump in income threshold. A family with two children aged 19 and 23 who have had to move to study at university will now be able to receive some support up to a parental income of almost $140,000. This is up from the current parental income cut-out point of around $79,000. In addition, if both students are renting privately and receiving rent assistance, under the reforms they may still get some rent assistance up to a maximum family income of around $168,000. Interestingly, none of those figures highlighting the massive increase in support for students is featuring in the coalition’s very irresponsible scare campaign.

The fact is that these changes will allow around 68,000 more young people to gain access to youth allowance and other student income support payments in 2010. A further 35,000 will receive a higher rate of payment. Those opposite, if they continue to oppose these measures, are standing in the way of those more than 100,000 students receiving what they need in order to pursue their academic careers.

Importantly, in this bill the government will also progressively lower the age of independence from the current 25 years to 22 years, which, again, will enable significantly more students to access income support over time. There will also be an increase to the personal income test threshold—that is, the amount of money that students are able to earn while they are receiving youth allowance—from the current $236 to $400 per fortnight, commencing on 1 July 2012. That measure is about enabling students to earn more from part-time work during their time as a student.

Other important elements of the package of reforms include the introduction of a new annual student start-up scholarship of $2,254 each year for all university students receiving student income support and not already receiving a Commonwealth education costs scholarship. This is to assist with the high up-front costs of textbooks and specialised equipment. On top of that, especially for rural and regional students, there is the introduction of a relocation scholarship of $4,000 in the first year at university and $1,000 in each subsequent year to provide assistance with the costs of relocating for study for dependent university students who have to move away from the family home for study and independent students disadvantaged by personal circumstances. That scholarship is available to those people who are not already receiving a commonwealth accommodation costs scholarship. All students who receive a relocation scholarship will also receive that annual student start-up scholarship. Unlike the previous system, where the numbers of scholarships were limited and, as a result, many eligible students missed out, under the new system scholarships will be administered by Centrelink and all eligible students will be able to receive a scholarship.

Regardless of the scare campaign that the coalition insists on running, to the great detriment of young people, particularly in rural and regional areas—discouraging them yet again from aspiring to higher education—these assistance measures are all about better targeting, making sure that those students who need this kind of financial assistance in order to achieve their educational dreams will be able to get it, with a much more generous parental income test, with the age of independence reduced from 25 to 22, and with higher amounts of assistance. I support these measures because they are fair and they are part of greatly improving the access of students from low socioeconomic backgrounds and rural and regional backgrounds. They are going to be a key part of meeting our goals for equity and productivity into the future.

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