Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

I rise to address the Social Security and Other Legislation Amendment (Income Support for Students) Bill 2009. This bill, which purports to provide better and more equitable support for tertiary students, misses the mark by a wide margin. Instead, it makes things much worse for the core part of my constituency: students from the country and the families who support them and work to give them the opportunity to fulfil their dreams. I would be one of the first to admit that the current system of supporting disadvantaged students through university has deficiencies and in some cases the spirit of the arrangements is tested.

There are many forms of disadvantage when it comes to obtaining higher levels of education. For some, it is as simple as coming from a low-income household. For others, it may be a physical disability, a learning difficulty, an unsafe home environment or the fact that they are a parent with all the responsibilities that come with that role. For all of these and a host of others there is some form of government assistance to meet those challenges. However, there is another form of disadvantage that governments have been less willing to accept responsibility for. Those who live in the country who have to leave the parental home to attend university have an inbuilt financial disadvantage. Where other students can live at home cheaply with the support of family, country students and their families face years of extra costs amounting to tens of thousands of dollars per student.

I have had a long interest in this area, undoubtedly fired by the fact that my wife and I have managed to guide three children through the last three years of high school and university while living 500 kilometres away from both the schools and the tertiary institutions. We are far from alone in this. For thousands who live in the rural areas of Australia, local schooling options often mean that sending their children away to complete their final years of secondary schooling is all but unavoidable. For some, it is about attaining the highest possible score to gain entry to popular and desirable courses. For others, it is about achieving a standard.

It is one thing to get into university; it is another to be properly prepared for the task and equipped with the correct subject background to be able to successfully do the work. I will use a personal story to illustrate this issue. My daughter, who is now a chemical engineer, would have been required to complete every one of her chosen subjects in year 12 at our local school through Open Access education—effectively correspondence. Not even one subject could be delivered in a face-to-face situation. My wife and I decided that this was a totally unrealistic task for her and she would not be able to reach the required standard in this situation. We bit the bullet and enrolled her in a private boarding school in Adelaide. There is nothing easy about sending a 15-year-old away from your home, probably never to live with you again. But it did achieve the desired result, and I thank the school in this case for assisting us with the financial challenges.

Limited subject access in small communities is symptomatic of the small populations. As much as we may wish to offer a full range of subjects in every school, it is simply not feasible. To ask a student requiring a high entrance to rack up the points entirely by correspondence is not just a difficult option, it is almost impossible. So parents scrape together every resource they can to try and put their children on an equal footing with those who live near bigger schools with more resources and a wider choice of subjects. The extra costs involved are neither fair nor in many cases affordable. However, today is not the time to fully explore the injustice and inequity of education at senior secondary level. But it is important as a basis for understanding the effect the government’s proposed changes to youth allowance will have. We need to understand the disadvantage that many of the affected students operate under.

So just how difficult is it to support your son or daughter through university if they have to leave home in order to do so? My interest in this area predates my election to parliament by a long way because, as my family is serviced by a small regional R to 12 school and lives 500 kilometres from Adelaide, my experience mirrors that of so many others who are outraged with the government’s plans. As I said, I would be one of the first to say that the current arrangements that support regional students to attend tertiary education are far from perfect. I would welcome positive reforms. However, I view the government’s moves in totality as a worsening of the situation for country students.

In an effort to raise the profile of the plight of country families in respect of this issue in early April this year, I launched a discussion paper which clearly identifies barriers and some solutions to this shameful situation. I received a significant response to that paper and as a result I have been asked to address a number of national education groups who are vitally interested and grateful that I have helped raise the profile of this problem. Little did I know that the government was planning major changes in the budget and that those changes would actually make things much worse for a significant portion of my constituency. The paper, which I launched at an isolated children’s parents meeting at Woomera, clearly identified the financial and emotional difficulties faced by students who need to relocate. As I said, it is no easy thing emotionally to send your child away from home at the age of 15 or even 17 when you know that they are unlikely to ever live full time at home again. But it is a sacrifice that thousands of country based families make every year.

My paper clearly identified the costs involved with relocation. Boarding college fees, telephone rental, application fees and bonds total more than $13,000 per annum. This does not include travel to and from the capital city, laundry and toiletries et cetera, which would normally be utilised at home if living there. A realistic estimation of these costs is around $2,500 a year. Many students will elect to rent in shared accommodation, which can present difficult challenges if the student has not lived away from home before, with students often feeling isolated and lonely as they learn to cope with cooking and cleaning chores and living with strangers, while probably juggling work commitments—all at a time when they are trying to study in a new environment. This option is unlikely to be any cheaper than the boarding college option. Shared rent, electricity, water, food, insurance, internet and phone connections total around $12,500. So it is about the same as the boarding college options. In total, it comes to somewhere between $15,000 and $16,000 a year.

On top of all this, it just may be unavoidable that the student will need access to a car to attend outlying campuses, or late lectures, to get to late-night employment and—if suitable transport links do not exist—to get home every now and then. Once again, this is something that students who live at home can access easily when they need to. All of these costs are over and above the norm; they are all extras that families who have the luxury of having their kids live at home do not have to face. Imagine having three or more children wanting to go to university at a cost of around $16,000 per year for four years. For three students, a quick calculation tells us that the extra family commitment over the period is likely to be close to $200,000—all as a penalty for living, say, more than 75 kilometres from a university.

It is worth our while to clearly understand the current arrangements. Youth allowance is currently awarded to those between 16 and 25 where the combined parental household income is below $32,000 with a decay rate of a dollar for every $4 earned. The allowance is also subject to an assets test of approximately $535,000. There is a rigorous family actual means test for the self-employed and businesses. Alternatively, students may be deemed independent of their parents if they meet a number of different criteria, some of which include: being a refugee; it being unreasonable for them to live at home; being a member of a couple; having a dependent child; or being an orphan. Applicants will also be deemed independent of their parents if they have worked part time—15 hours a week—for at least two years after leaving school, or have worked full time—30 hours a week—for 18 months in the last two years, or have earned $19,532 in an 18-month period after they have left school, which equates to 75 per cent of the maximum pay rate under wage level A of the Australian Pay and Classification Scale. The last clause has been the means that thousands of country students have utilised to access a basic income to be able to meet some of the costs that I referred to earlier—that $16,000 discrepancy between metro and country students.

To assume that a household earning $32,000 can afford $16,000 a year to support a student is ridiculous. Clearly this situation should have been fixed by previous governments, including the last. I welcome the government’s move in this area but would make the point that the new level of $44,000 a year hardly indicates a wealthy household when it comes to supporting a student away from home at those levels. However, in all this time there has been another route to some assistance—the independence test by means of earnings. This policy has led to a boom in what has become known as the gap year when students leave school and immediately start working at whatever job they can get. They have a full 18 months to earn the minimum amount of $19,532. By good management, setting clear goals, and hard work they have been able to meet the income requirements to start university in early March after their gap year and become eligible for youth allowance in about May, around about two months later.

Many will argue for the life value of a gap year and claim it as a positive experience for the student. For some, it undoubtedly is. But for many others it can lead to a drop in focus, relationships can form, financial commitments may be made, and there is a certain percentage who never get back to what they intended to do. One thing we can be sure of is that if it were not for the financial imperative most would not choose that route to income support. If their families were capable of finding the $16,000 per year plus, they would not put their education on hold for 12 months. They would not delay their graduation by 12 months. They would not delay their entry into the professional workforce by 12 months.

The government has proposed a raft of changes which the minister claims will be better for students. Unfortunately, we have winners and losers and on a per capita basis there are far more losers in my constituency than most. The government proposes to lift the parental income test to $44,000, change the taper rates so support stops at $76,000, lower the age of independence to 22, raise the personal income test, and—among other changes—a start-up scholarship will be available each year for people on youth allowance.

In themselves, these are fair reforms but there are a couple of nasties in the package. The independence by means of income clauses have been radically toughened. Also, the government’s original proposal had the effect of being retrospective for those currently on a gap year. On this particular condition, the opposition led a public revolt which has seen the minister back down and offer to protect some of these students. But the minister has not been entirely upfront on this issue and it seems that unless you live more than an hour-and-a-half from your university you will miss out on this consideration.

There has been a principle held in Australia that when someone makes a decision based on current government policy they should not be materially disadvantaged by future government decisions. Young people all around Australia made well-reasoned decisions about their future last year based on advice from school counsellors, Centrelink and career advisers. They have put their lives on hold for 12 months as a result of that advice. It is not acceptable that we should now change the rules on this group and abandon them.

The opposition is proposing to amend this legislation and guarantee that group may still access youth allowance on the same basis as they had planned. The legislation also proposes that to be deemed independent from their parents students will now have to work a minimum of 30 hours a week for 18 months of a two-year period after they leave school: a minimum of 30 hours a week—20 is not enough, and 29½ is not enough. They must work a minimum of 30 hours a week. The real question here is whether the two-year gap period is anything like a viable route to a university education. In my mind, absolutely not. This change in the legislation effectively will kill off the gap year or the gap two years. It is designed to do just that. In fact, the government and the minister are not being honest here at all. They do not want anyone to qualify for youth allowance by proving their independence from their parents but they do not want to say so publicly. They instead make that path totally unattractive and unviable.

For all the reasons that a gap year stretches the commitment and challenges for students, this policy just makes things far worse. Can we really expect people intent on a professional career to put their lives on hold for two years? In what is likely to become a rare event, if a student with no options feels they must pursue this route to income support there will also be the practical difficulty of obtaining sufficient work in regional Australia.

Jobs in regional Australia do not grow on trees. Most of our communities have higher unemployment levels than the state and national averages. Many who have historically cobbled together their $19,000 have done so by working in a number of part time and seasonal jobs. Seasonal jobs, by their very nature, often entail long hours and enable workers to accumulate significant funds. Under these provisions, though, a 50- or 60-hour week will only count as one week of 30-hour employment. Conversely, if the seasonal work amounts to less than 30 hours it does not count for a work week at all. So it is clear that the government does not want anyone to qualify under these provisions. It is its intention to shut down the independence test for youth allowance.

As I said earlier, I concede the current arrangements are far from perfect. I highlight that by pointing out that a significant number of students have been able to use the independence test to qualify for youth allowance and still remain living at home. Simply put, this means city-based students living in easy range of their university are able to stay at home with all the financial and emotional advantages this offers and still qualify for youth allowance.

While no-one is suggesting this is anything but legal, to my way of thinking it is outside the spirit of the original arrangements. As I have already said, it is something which earlier governments, and now this one as well, have had the opportunity to fix. So if the government were willing, at the same time as eliminating the financially independent criteria for Youth Allowance, to address the true, underlying disadvantage of country students, I would then be of a mind to support them. What is needed here is genuine and separate assistance for students who have to leave home in order to attend university. If there are no practical and suitable campuses within a reasonable travel distance of where a student lives, they should be eligible to apply for this assistance. The rent allowance should meet a significant proportion of the extra expenses the student faces by reason of their disadvantage—that is, the need to leave home.

That is why the opposition is seeking to amend this legislation to allow for the establishment of a rural and regional scholarship program worth $120 million. Because the nation’s finances are in such a parlous state as a result of the government’s irresponsible borrowing program, which will see every living Australian owing around $9,000 by the end of next year, we are proposing that this be a cost-neutral move, funded by reducing the government’s proposed $2,254 start-up scholarships available to youth allowance recipients to $1,000 a year. While obviously many on youth allowance would have appreciated the extra cash, its establishment has effectively seen the transfer of resources from country students, by means of the reduced funding for Youth Allowance, to a thinner slice for all, where the intake is dominated by metropolitan students. That is effectively a transfer from country to city. I am sure all students and families of a reasonable nature would recognise the equality of opportunity issue that must be addressed here.

We search in vain for a level playing field in any number of areas. They certainly can be difficult things to find. When it comes to access to tertiary education for country students, we are kicking not only uphill but into the wind as well. Some of the difficulties are: the level of secondary education needed to prepare for university; the necessity to leave home to participate; the significant and discouraging costs associated with relocation; being isolated from your traditional support base, family and friends; learning to live with strangers at a young age; coping with running a household; and juggling work and study.

Across rural and regional Australia we are constantly dealing with shortages of professionally qualified people to fill positions in our towns, to provide intellectual horsepower to our communities and to staff and drive the industries we must develop to reinvigorate our regional base. I can tell you Australia needs its regional base more than ever. By and large, the regions are the generators of wealth and the suppliers of export income. We who live in the country know what country living has to offer. Convincing others to live there is not so easy. But we do know that if a doctor, a surveyor, a teacher, a lawyer or an engineer comes from the country they are more likely to return there. So the way to address our ongoing skills shortage is to encourage more country sourced students into tertiary institutions. We know that, currently, country based students are only about 60 per cent as likely to graduate from university as city based students. If we are to address these professional deficits, as we should, we must strive to make things better, to make attending university a more attractive option for country kids.

The government claim they want to fix up inequities. In the case of this legislation, they are, unfortunately, making things worse for the demographic which stands to make the biggest impact on these shortages. Those who are, through no decision of their own, bedevilled by Australia’s natural curse—that is, the tyranny of distance—who, due to the choices made by their parents, live distant from our centres of learning, will as a result of this legislation, if passed in its entirety, be worse off. I have only been a member of parliament for two years, but I can tell you without doubt that this issue has attracted more active comment to my office than any other in that time. Hundreds of parents and students, past, present and prospective, have contacted me, outraged at the government’s deal and often asking, ‘They won’t really do this, will they?’ I will close with a statement from the discussion document which I developed earlier this year:

If there exists a significant population in one location, governments deem it the responsibility of the tax payer to provide services on site. If a smaller population exists in isolation, governments see it as the individual’s responsibility to find ways to access those same services not the tax payers.

It is a challenging proposition.

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