Tony Windsor (New England, Independent) Share this | Hansard source

I endorse some of the words of the member for Lyne, particularly his words on young people and the way in which they have conducted and conveyed their views to the parliamentary process. Along with the member for Lyne, I held a number of functions and a press conference early in the piece on the Social Security and Other Legislation Amendment (Income Support for Students) Bill 2009. I was very impressed with some of the young people who had taken the time to analyse the issues, to come to the parliament and to express their views in a friendly fashion, and I am sure that this was being demonstrated across Australia. I think that this, in no small way, is one of the major reasons why the minister, to her credit, changed the government’s view in relation to the retrospectivity of the bill.

The member for Lyne and others have highlighted a very significant point about the original proposal to change the legislation. This was that people who completed year 12 last year and who had engaged in various forms of employment to pass the independence test were suddenly being told that the rules had been changed. This was not only a great shock to them; it was a very bad message, in my view, to send to young people on their first involvement with the political process. At that stage there was great concern about the way in which these young people were being addressed and the fact that the government and the minister were looking at retrospectivity. I remember having meetings and telephone conversations with some of the minister’s staff on a couple of occasions. I thank them for the way in which they addressed that issue, because I think they understood that it was a very serious issue. I congratulate the minister for removing the retrospective part of the legislation.

I think that in a sense the young people themselves drove the change. And there is a very real message that if people do bother to get involved in the political process they can effect change. There is a saying that I use from time to time, and I can imagine one of my staff, Graham Nuttall, looking at the screen saying: ‘Oh, he is not going to say it again,’ because he has heard it on many occasions. Well, I am going to say it again: the world is run by those who turn up. Think about it: if you do not get involved in what is going on in your world, whether it be in your school, community, state, nation or the world, you end up with a world that is determined by those who do bother to turn up. I have met with many students in my electorate and with some from the member for Lyne’s electorate and from other electorates around Australia. I remember that one of the first interactions I had with the students in my electorate was a petition that I delivered to the parliament from students of McCarthy Catholic College in Tamworth. They bothered to turn up; they bothered to agitate, they bothered to look at the way in which the legislation was being written and they bothered to look at what needed to happen, not only for themselves but for many others within the community.

There was a very harsh message in the original retrospectivity proposal that sent a shiver down the spines of people, particularly of our youth, who believe that governments who put the rules in place should not engage in a process where they reverse things. I am very pleased that through the agitation of the young people themselves we have seen a change in relation to the young people who left school last year and who are going through the 18 months of work to achieve the $19,532 that proves that they are independent of their parents. Those young people will now be considered favourably by the government.

However, there are other issues that need to be articulated, one of which was part of a scare campaign that the coalition—some members of the coalition at least—ran. Even though the government—and we have to bear in mind what was in place before these changes were intimated—had increased the income threshold from something like $34,000 up to $42,000, that was condemned as quite inappropriate, and I would agree. I listened to the member for O’Connor yesterday when he commented on the affordability of parents on that kind of income, particularly if they had other children in school and had to pay insurance, school costs and the usual day-to-day family budgetary costs. However, it was not the case that if you earned more than $42,000 your child would suddenly receive nothing, which is what the scare campaign was suggesting; rather, it was that students from a family with an income above that level would receive some part of the youth allowance. It was mooted that $42,000 was a cut-off, but that was really only the cut-off point for a student to receive full youth allowance under the income test, not the independence test.

I thank the minister’s staff who helped me when I raised a number of scenarios. This was done on 28 May 2009 so I hope it is still appropriate, but I think it should be mentioned because there may be some parents who are still concerned about some of these issues. With a family income of $60,000, for instance, the youth allowance for an independent student away from home in year 1 was $9,646. The new arrangements would also give a year-1 relocation scholarship of $4,000 and a start-up scholarship of $2,254. So on a family income of $60,000 there would be youth allowance arrangements of something like $15,900. In year 2, that would drop to $12,900 because of the drop in the year-1 relocation scholarship from $4,000 back to $1,000. The youth allowance under the parental income test, with no independence test, at a $60,000 family income, would be $12,414 in year 1 and $9,414 in year 2.

I will just add that the examples are of various scenarios regarding a family with one student living away from home at various gross family income levels, one with a student having qualified for the independence test for youth allowance and the other without an independence test but based solely on family gross income.

I have given the scenario at a $60,000 family income. At an $80,000 family income, the youth allowance for an independent student away from home would be the same, at $9,646. You would add to that the year-1 relocation scholarship at $4,000, which was independent of income, and you would also add the start-up year-1 scholarship of $2,254. So the youth allowance in that case stayed at the $15,900 figure. The youth allowance under the parental income test, with no independence test, at an $80,000 family income, would drop by something like $4,000—compared with at a $60,000 family income—to $8,425. In year 2 it would be $5,425.

The point I am making is that the fear that was being spread, that at the $42,000 level there would be no access for families to some degree of assistance by way of the youth allowance, was not correct at the time and I do not think it is correct now. At a family income of $100,000, for instance, the youth allowance for an independent student away from home would be $9,646, with the $4,000 relocation scholarship and the start-up scholarship, so the income or allowance would be $15,900, and in year 2 $12,900. Those numbers are similar to the scenario of a family income of $80,000. But what is significant is that the youth allowance under a parental income test, with no independence test, is nil because there is a cut-out figure at about $92,000.

The second scenario I would like to work through, but not in the same detail, assumes that there are two children living away from home, one student in year 1 and the other a continuing student in another year. In that scenario, the youth allowance for an independent student away from home in year 1 is $15,900. For the year 2 student it is $12,900, which takes into account the drop in the relocation scholarship. So the total family payment in that scenario is $28,800. The youth allowance based only on family income—only on family income, not the independence test—is $25,316. That is in the scenario where there is one student in year 1 and a continuing student in another year.

I am pleased to see that the minister is here now because she may be able to correct me on some of the fine detail. I compliment her staff who helped me back in May, so I am a little bit rusty on the numbers. I am hoping they have not changed because if they have it will be a severe embarrassment—and I have no doubt someone will point that out. Minister, the scenario I am talking about assumes two children living away from home, one in year 1 and the other a continuing student. On an $80,000 family income, the total family payment for two students is $28,800, assuming independence, and that has not changed. But the youth allowance, based only on family income at $80,000, is $21,327. Again, that is for the scenario of two children at university, one in year 1 and one in another year, and it takes into account the various start-up and relocation scholarships. At a family income of $100,000, and based on the independence test, the figure would remain at $28,800. But the youth allowance, based only on family income not on the independence test, would drop to $17,338. That is very different to the scenario that was being painted: that at $42,000 everything stopped, that no payments would be made. And that scenario, that if the family income was $42,000 you would get absolutely no help at all, has been painted on a number of occasions through this debate as well.

At $138,000 of family income for two students, with one student in year 1 and one student in year 2, student 1 would receive $6,250 and student 2 would receive $3,250 plus a nominal youth allowance of between $10 and $15 a fortnight. So it will be approximately $10,000 for that particular family in that particular scenario. What has really complicated this is that everybody has a slightly different situation. Their income levels might be different. The status of their children might be different. The complete cut-out of payments occurs above a family income of $139,000. The minister might like to comment on some of those things if they are still an issue.

One of the real issues that I do not think this legislation has fully embraced—I hope that the Senate inquiry does have a very close look at it and I hope that the government has a serious look at this as well—is that there are scenarios with the new changes and the 18-month work test, particularly in those smaller country towns, where children will actually have to leave home and be away from their parents in order to find work to pass the income test and prove that they are independent of their parents. That is a scenario that is highly unfair because many country students do not have the luxury of having a university close to them. I might cop some flak in my electorate about this, but I have a university in Armidale and a student who lives in Armidale and has the choice of living in Armidale with their parents or of living away from their parents should not receive the same level of assistance as someone who is living in Walgett for instance, which is not in my electorate at all, and does not have the luxury of a university. They have that distance to overcome and their parents will incur additional costs. I do not think the legislation as it stands at the moment fully addresses that particular issue.

There is absolutely no doubt that there is a cohort of country students in particular that will not go to university because of these changes, not because it is unfair in terms of the scenarios that I have run through in those examples but because of the fact that they are going to have to leave home to find 30 hours of work a week for 18 months to prove that they are actually living away from their parents. There is no choice in a lot of our country towns. We want to encourage children in smaller country towns that are disadvantaged to actually strive to go to university, but if we put a roadblock in their way at day one and say, ‘That is virtually two years out of your life before you go to university,’ we know from our own personal experiences that if you are two years out of the game you are less likely to go back into it. That does not mean that everybody will not go back into it, but there is a very real issue there that I think the government should really address. It is an issue that concerns a lot of people in my electorate. Even some of the Labor Party members were intimating their concerns for those country kids who do not have the luxury of being near a university, who do not have the luxury of wealthy parents, and who do not have the luxury of finding work in their own town to prove that they are independent.

In terms of fairness, this legislation has not reached that point. There are still scenarios in this legislation where the city based child who has the choice to live at home or prove independence can do both at the same time. I am not certain that is what the government was actually trying to achieve when it was talking about equity between people. I can understand and I agree with what the minister has said about there being more people reached by these changes, but there is a cohort of people who will be severely disadvantaged and they, by and large, happen to live in country areas. We need to resolve that particular issue.

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