Jenny Macklin (Jagajaga, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

The Student Assistance Legislation Amendment Bill 2005 is testament to the bankruptcy of the Howard government’s policies in relation to student income support. On the face of it, the major purpose of this bill is to enable the government to close legislatively a student loans scheme that was earlier closed administratively. But, in moving to strip from legislation this student income support measure, what is laid bare is the complete absence of any suitable alternatives. Before I go through the details of the very sad and sorry record of student financial assistance under the Howard government, we need to remember the circumstances that have led to us considering this bill today.

In October 2003, the Howard government attempted to shut the Student Financial Supplement Scheme by legislation. It failed to muster sufficient support from the non-government senators, so, seeing the writing on the wall, the government did not proceed with the bill. But the saga did not end there. Following the withdrawal of the bill from the parliament, the government announced that it would close the Student Financial Supplement Scheme using administrative means. So it was that in December 2003 the then Minister for Education, Science and Training announced there would be no new loans from the Student Financial Supplement Scheme from 31 December that year. Basically, we had the Howard government thumbing its nose at the parliament and simply decreeing that the scheme was no longer open for business—the sort of arrogance that we are seeing more and more every day.

The method that the government chose to implement this edict was to allow its contract with the Commonwealth Bank of Australia to provide finance for the Student Financial Supplement Scheme to lapse. The government decided not to negotiate a new contract or to roll-over the existing one. I can just imagine how the previous minister, Brendan Nelson, must have congratulated himself on being able to pull this swiftie to avoid the wishes of the parliament.

Now that the government have complete control of both the House and the Senate, this bill is brought back before us. Now they are just going to push this through and we can expect that, because the government have the numbers, the bill will be passed into law and it really will be curtains for a scheme that filled a need for students requiring additional income support. There is no question that the scheme provided extra options for students to tailor their individual needs and meet their circumstances.

The Student Financial Supplement Scheme was first established in 1993, and in its first year of operation about 44,000 students took advantage of this new supplement. By 1996 the number of students with a financial supplement loan had grown to about 68,000—about 13 per cent of all Austudy and Abstudy recipients. So a fairly substantial number of students had taken advantage of this scheme. Most of the loans were accessed through the scheme between 1995 and 1999, and, of course, a large number of students were assisted by this flexible facility beyond those years. In excess of 200,000 loans were made available through the scheme in the last five years of its operation until 2003.

In the last year of the scheme, about 40,000 students applied for and accepted these loans. Of those students, over 15 per cent were Indigenous, some from very remote regions, over 15 per cent were single parenting payment recipients, about 12 per cent were recorded as not having been born in Australia and, interestingly, over 50 per cent were women.

These figures really do reinforce data provided by the government that disclosed that the largest number of beneficiaries of these loans were low-income earners such as single parents, people with disabilities and Indigenous students—people who basically could not access support from other sources such as their parents or who faced other constraints in the labour market. If you look at the data that the government has provided, there is no doubt that this scheme was of greatest assistance to those students who were most financially vulnerable. Those students made it plain to us in letters and emails that they were in grave danger of not completing their studies if this scheme did not exist.

Unfortunately, when the government decided to pull the rug out from beneath the feet of these students in 2003 with the sudden closure of the scheme, it left many of those already disadvantaged students in a very difficult financial position. That is now a few years ago, so we in the opposition have to accept the reality that this scheme is closed—until now closed by administrative means—but we are not prepared to meekly accept that, with the closure of this scheme, there should be nothing to fill this void. The record of this government shows a complete lack of adequate income support for students, and there seems to be a complete lack of interest in the real hardships faced by many university students.

We only have to look at a major report done by the Senate Employment, Workplace Relations and Education References Committee on student income support to see the severe shortcomings of the government in this area of public policy. The Senate report describes in great detail how, after 10 long years of policy neglect from this government, many tertiary education students face significant financial hardship and insecurity. I recommend the Senate report to the new minister. I hope she has a more sympathetic attitude to the needs of struggling students because there is no question that there are many of them. I draw the attention of the new minister to the preface of the Senate inquiry’s report, which records:

Over the last decade the student income support system has operated in a policy vacuum. It is now showing the signs of this neglect. The Government’s preoccupation with program efficiency over policy effectiveness and continuing problems with Centrelink’s delivery of payments have taken their toll on students. The current level of income support does not come close to providing students with a decent living wage to cover the cost of accommodation, food, bills, and transport. The level of income support has been falling steadily behind the rising cost of living. This has resulted in many students experiencing severe financial hardship and poverty.

Under the heading of ‘Policy neglect’ the report says:

... the student income support system has operated in a policy vacuum for too long, and is showing clear signs of policy neglect and poor service delivery. Many witnesses conveyed a strong view that the drift in student income support policy is not only unacceptable but has become an important factor contributing to the financial hardship of many students ... One of the consequences of this neglect is that the increasing financial hardship among the student population is not included on the national policy agenda.

You would have to say that this bill finally confirms that fact. The evidence presented to the Senate committee about the ramifications of the increasingly long hours that many students are being required to work led to a very blunt warning from the committee. They said:

There is general agreement among students and academic experts that Government measures are needed to arrest the deteriorating state of student finances. Without Government intervention, a combined weekly total of 60 hours of full-time study and part-time work will soon become the norm for a majority of students. The committee believes this is an unacceptable scenario for students to have to face.

It certainly is the case that many academics put to me. I have had vice-chancellors seriously complaining that so many students these days have to do so much paid work it is having a major impact on the capacity of students to attend to their university work. If that were not sufficiently clear, the committee then emphasised in its report that supplementing income support payments with paid employment is no longer an added extra for many students. Part-time work has become a necessity for students. As the report says, it is all about just making ends meet. It is about paying the rent, putting food on the table and paying for transport. The committee goes on to talk about the detriment to students who are not able to complete their studies. It is high time the government recognised that for many students the situation is very grim indeed. The casualties are, first and foremost, the students who are in the direct line of fire when it comes to this government.

This government has imposed so many different policy changes on students. Most recently there was a most extraordinary ideological change—the ramming through parliament of the voluntary student unionism legislation. We know the government did have warning from its own department that the voluntary student unionism legislation would also have a very negative impact on low income and disadvantaged students, but it seems that the government was more interested in its longstanding ideological view about voluntary student unionism rather than in worrying about the needs of disadvantaged students and the very important services which those students rely upon and which student organisations have provided over the years. The government had plenty of information in advance from its own department about how bad this would be. I quote from a FOI document from the department that the Australian newspaper received:

A student support argument has raised the concern that, without support services, many disadvantaged students would not be able to complete their studies.

So we have the minister’s own department making it very plain that it is concerned about many disadvantaged students not being able to complete their studies. This is in the face of what can only be described as the extraordinarily ideological legislation that was pushed through parliament on the last sitting day of last year.

This situation is particularly serious for rural students. I would have hoped that our National Party members in this parliament would recognise that it is very tough for rural students, especially those who have to come to the city to study at a university. A major study done at Melbourne University last year showed that one in five rural students deferred their university education, with the major reason given being ‘the greater need for rural students to accumulate savings to meet their additional costs of attending university’.

I am sure we all understand how much harder it is for rural students, so I would have hoped to see much more action from the National Party, with some pressure being brought to bear on the government to make sure there is decent income support to enable rural students who want to go on to tertiary education to do so. Unfortunately, we have not seen any of that sort of action. All we have seen is the National Party supporting the coalition, as usual, in the final abolition of this scheme that certainly did help many rural students. The remedy to this problem is in the hands of the government, but we on this side of the House will not hold our breath waiting for this government to act, because they have not done anything helpful to enable students to manage their financial commitments in the 10 years they have been in government.

By contrast, before the last election Labor put forward two very practical proposals: one was to extend rent assistance to Austudy recipients, which would certainly have helped those students who are dependent on Austudy by enabling them to get extra support to cover their rent. We also proposed reducing the age of independence for students on Youth Allowance from 25 to 23, another measure that certainly would have helped students in that age bracket. Unfortunately, we have not seen any proposals of any sort from the government which will help students in this regard. As I said before, we have a new minister. It is to be hoped that she will recognise that this is a very serious problem facing students in our tertiary institutions. I hope that with the cancellation of this scheme we might see some real proposals come forward, but, as I said before, we will not be holding our breath.

This bill also contains a clause unrelated to the closure of the Student Financial Supplement Scheme but which is potentially of significant moment in relation to two further income support schemes. I particularly want to draw the attention of the House to this clause. It would remove the need to make new regulations each time the guidelines for Abstudy and the Assistance for Isolated Children schemes are altered. Such a provision is described by the government as a ‘minor technical amendment’, but advice from the Parliamentary Library indicates that it is not minor at all and may have major consequences for parliamentary oversight of important elements of these two schemes.

One of the very important roles for any parliament is to make sure there is sufficient scrutiny of the proposals advanced by the executive in any act. Appropriate levels of accountability demand that such scrutiny and oversight occur in relation to all instruments of legislative authority. This is particularly the case for non-statutory programs such as Abstudy. In fact, in relation to Abstudy, it seems that the only opportunity for the parliament to be aware of changes to certain important components of the scheme in the past was via the process for notification from time to time of the date of changes to the relevant Abstudy policy manual, which is, in effect, the compendium of guidelines made under the scheme.

I say in the past because the Department of Education, Science and Training has advised the Senate committee which conducted an inquiry into this bill that references to Abstudy and the isolated children schemes have recently been removed altogether from the regulations. Where that leaves parliamentary scrutiny of these schemes is entirely unclear. I do not for a minute pretend that this issue is not legally complex or difficult and, as I said, I am relying on the expertise of the Parliamentary Library’s research service, which has set out the two competing interpretations of the bill’s provisions in this regard. To try to help the House I want to quote from the Bills Digest prepared on this bill, because it is a complex matter. It states:

The changes to section 48 of the SSA will modify the way in which notification obligations are to be defined. Under the new regime, the scope of the obligation and matching offence can be defined by the executive. These changes have an immediate influence upon the offence provision section 49. Accordingly, the proposed amendment in Schedule 2, Part 2, item 10 is not without difficulties. In particular, should the broad view be followed, the proposed amendments could:

• remove parliamentary scrutiny with respect to the scope of the obligation and, as result, of the offence, and
• erode the rule of law because they have the potential to deprive the obligation and matching offence.

Parliament may want to consider whether the proposed law should be amended to put beyond doubt that the expansion of the regulation-making power does not include the determination of prescribed events; but is limited to the prescription of the notification process.

I want to make clear that this final paragraph of the Bills Digest has formed the basis for the amendment I will move during the consideration in detail stage of the bill. It is for these reasons in particular, and because of the competing and valid legal interpretations of the consequences of the bill, that I really urge the government to consider the very serious grounds that I have for proposing the amendment.

We do remain of the view that continued oversight of legislative instruments which can effect changes in access and eligibility criteria is a crucial function of the parliament, and should not be watered down under cover of a so-called technical amendment. I also noted with interest that the department of education informed the Senate committee that they were prepared to recommend to the minister that the following be included:

An express statement that, to remove doubt, the power in proposed subsection 48(2) is not intended to permit the determination of prescribed events in extrinsic materials, and that prescribed events may only be determined expressly in the Regulations.

The former minister for education did issue a replacement explanatory memorandum to the bill. Unfortunately, what that said is ‘trust us’. It said:

... the power proposed in subsection 48(2) is not intended to permit the creation, determination or variation of prescribed events by extrinsic materials ...

If that is the government’s intention, I would say to the new minister that it should accept the opposition’s amendment to remove all doubt because, I am afraid to say, the parliament and the Australian people have learned time and time again that this government is not to be trusted. So if the department’s advice is right and if the previous minister’s intentions are as set out in the change to the explanatory memorandum, I hope we will have the new minister actually accepting Labor’s amendment. Of course, at this stage of the debate we do not know whether we are going to get this change from the new minister, but I hope she will seriously consider the issue that I have set out today because it is an important matter.

Taken as whole, unfortunately the bill will enshrine a much diminished set of options for student income support. It is important that we recognise that this is against the backdrop of this government’s record of complete policy failure in this area. We have not had any attempt by this government to improve financial support for students. As I have said, the other provisions of this bill attack the role of the parliament as a watchdog, and for that reason as well we find the nature of the current bill unacceptable. So we would certainly not be able to accept the bill in its current form. I look to the new minister to look at Labor’s amendment and make sure that we can protect the oversight role of the parliament in the way that we are setting out that it could be done.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

I rise this morning to speak on the Student Assistance Legislation Amendment Bill 2005. This bill was originally introduced in 1993 to establish a loans scheme that students could take up voluntarily. Eligible students would be able to take up a loan by trading the income support that they would otherwise have been receiving. For every $1 they traded they would be able to receive a $2 loan. Over the life of this scheme some $2.48 billion has been lent to students.

It is important to look at this policy and at the time when it was introduced to reflect on the potential for the scheme to survive and whether it was good policy or policy that was really failing taxpayers and the students themselves. It was introduced at a time of very high unemployment, particularly high youth unemployment, in this country. It was at a time of very high interest rates in Australia. You, Mr Deputy Speaker McMullan, without reflecting on you personally, would recall that at that time under the Labor administration official interest rates hit something like 17 per cent and that many people in business, particularly small business, and farmers were paying up to 25 per cent for their money. The official unemployment rate at that time was something like 11 per cent and there were some one million people on dole queues around Australia. I think that in many ways the scheme was introduced to address an unemployment situation rather than the real needs of students. In other words, the administration of the time, the Labor government, was trying to hide unemployment by offering loans through students voluntarily trading their income support; they could trade every $1 they were receiving in income support for a $2 loan.

The result is that the government has ceased this policy, a decision certainly reflected in the take-up of the scheme over time, because at the end of the day, no matter how you look at this policy, it does not remain today good policy for students or taxpayers’ dollars. As I understand it, if you look at the government actuary’s figures on the level of debt of those students that still remains, some 84 per cent of something like $2.48 billion in original loans would perhaps have to be written off or dealt with in some way as a bad debt. Advice that the government has received shows that, as of 30 June last year, some $1.36 billion is unlikely to ever be repaid. It would not be responsible for the government to continue this program that would allow students to amass and accumulate debt that they have no capacity to repay in the future. That is why the scheme should be and has been suspended.

I want to touch on another element of the bill—and the opposition spokeswoman on education, the Deputy Leader of the Opposition, spoke of this—to do with some of the minor technical amendments to the Student Assistance Act 1973 that refer to the regulations that apply to non-statutory Abstudy and the Assistance for Isolated Children Scheme. The Assistance for Isolated Children Scheme has been an outstanding success. The basis and very policy of it, which has been supported by both sides of parliament since about the early 1970s, was to provide support for those students who can qualify under the scheme as being geographically isolated without the need for an income or assets test. That income support gives those students an opportunity to access education. That is the whole principle behind the assistance for geographically isolated children. It is support for those children to gain access to education at the primary and secondary level. After the 2004 election, increases in the allowances under the scheme were provided by this government, delivering on an election commitment.

It was the now Minister for Defence but at the time Minister for Education, Science and Training, Dr Nelson, who saw the need to ensure that we were providing that much needed assistance to young students who are geographically isolated in supporting them to gain access to education. I want to thank him for having listened so well. I represent a large part of Queensland and many people in my electorate—not just people on the land but also people who work for councils, live in small communities and working-class people—have to send their children away from the place where they reside just to gain access to basic primary and secondary level education. I know the increases that we made post the 2004 election have helped many more families financially support their children as they go away, as they have to, to gain basic access to education. I know that Minister Julie Bishop, who has been to my electorate as the Minister for Ageing and is now the minister responsible for education, understands this issue, and I am sure that she too will be a good listener on issues relating to those students who live in geographically isolated parts of Australia.

The Isolated Children’s Parents Association is a wonderful organisation that advocates on behalf of all those people who have children in a situation where they are growing up in a community which is geographically isolated from access to education. They appreciated not only that support for the assistance for isolated children but also the distance education allowance that we made available at the time, and also the funding for school term hostels. Many school term hostels are where students from geographically isolated parts of Australia go to in a town reasonably close to where they live so that they can gain access to primary and secondary education. Of course, many of those hostels have small enrolments, obviously because they are in fairly isolated parts of Australia, and the problem they have come across is the issue of viability—of being able to run the hostels in a sustainable way, given the need to make sure that the students are well looked after while they live away from home and that the facilities they are in are modern and have home tutors who live in and provide meals and support in both an educational sense and an emotional sense when those children leave home, often for the very first time.

Those areas that we increased funding for and recognised after the 2004 election are a direct result of the minister at the time, Minister Nelson, listening to the concerns of the Isolated Children’s Parents Association and people like me and others who represent large rural communities where so many people, particularly students in this case, are geographically isolated from very basic access to education and have to leave home just to gain that access to education—in other words, being able to go through the front gate into a school. Those are the very criteria that govern the very successful Assistance for Isolated Children Scheme, and the same applies to Abstudy for those children of an Indigenous background.

Whilst I am talking about the Assistance for Isolated Children Scheme, which is referred to in the bill, I just want to put on the record that I know that the Isolated Children’s Parents Association are also advocating the need for a similar scheme that will support students in gaining basic access to post-secondary education. It is a very real issue for thousands upon thousands of families who are geographically isolated from TAFEs, colleges and universities and, more recently since the 2004 election, from access to technical colleges for training in technical skills. There are many students from rural and geographically isolated parts of Australia who just do not participate in tertiary or post-secondary education. What the Isolated Children’s Parents Association have been to see me and many members on both sides of the parliament about is establishing a scheme that is similar in principle to the Assistance for Isolated Children Scheme—the AIC allowance—which will pay a basic access allowance that will support those students from geographically isolated areas of Australia in gaining access to post-secondary education. I know the youth allowance is designed to address this issue in many cases, but the problem for many families, particularly in extreme drought areas and those communities, is that for students to be able to gain access to the youth allowance they have to be independent. In other words, they have to work for 18 months after leaving secondary education before they can gain access to that support.

When they come back to parliament during their many regular visits to the House to see members on both sides I know the Isolated Children’s and Parents Association will be promoting, as will I, the idea of how we are going to address participation rates from students who live in geographically isolated parts of Australia. It is a very real issue for me and for other members who represent rural and remote parts of Australia. There are far too many young people who do not participate in post-secondary education because of the financial burden that it places on families who have to support their children when they leave home if they are going on to post-secondary education. The issue is not only the accommodation and food and living away from home allowance but also the cost of travel for those students to get access in the first place. For instance, if you are living in the very western parts of my electorate, the nearest town with a university is something like 1,800 kilometres away. For students to travel that distance, either their parents have got to drive them or they take a flight that services those communities twice a week. Families have to put the money up to that commercial operator at the beginning of the year to ensure that they have a seat on that plane so their children can leave home, go away and gain access to education. Many of these families are working people in those towns. Some of them are part of essential services: police, teachers, bank managers and so on. Of course, that is another reason we have problems attracting people into those rural communities: those families cannot afford the financial burden that will be placed on their family if they take up an essential job in their communities because they have to send their children away to gain access to affordable education.

It is a very real issue for me, as a member representing a very large rural community—there are other members of this parliament who will understand that—and I will be taking this issue up with the minister. I would hope members on the other side of the House would take a very serious look at this issue, because the participation rate in post-secondary education for students from rural and remote parts of Australia where they are geographically isolated and separated from affordable access to that education is a very real issue.

I support the bill before the parliament. I wanted to raise those issues in relation to assistance for isolated children and those students who are seeking support for post-secondary education. I know that we as a government will be looking at what more we can do. I commend the issue to the other side of the House, because it is terribly important when we talk about education and access to it that we canvass support from both sides of the House to address those who are disadvantaged by geography. It is incumbent on all of us to ensure that all Australian people have access to affordable education. I commend the bill to the House.

Craig Emerson (Rankin, Australian Labor Party) Share this | Link to this | Hansard source

The Student Assistance Legislation Amendment Bill 2005 closes down a student financial supplement scheme that was introduced many years ago. It does so formally through legislation, even though the scheme has been closed administratively by this government. On top of that, it makes the repayment schedule for those students or former students who had access to the scheme much more onerous. You have to wonder about the motivation of a government that allows a situation to occur whereby young people take out loans in good faith and then the government retrospectively makes that repayment schedule much tougher than the students had legitimately anticipated at the time when they took those loans out. Such is the style of this government that it has not hesitated to do that. Labor opposes such a nasty change to the legislation.

In addition, this legislation removes any requirement to reflect in regulations changes to the guidelines under the Abstudy and Assistance for Isolated Children schemes. This gives the government the capacity, on a whim, to reduce or in other ways to make tougher the arrangements for young people accessing assistance with living expenses while they go through university. I am quite sure that the motivation behind this is not to make it easier for those students, because this government has never made it easier for students seeking to get a good university education, other than of course those students who happen to be the sons and daughters of very wealthy Australians. They now enjoy privileges that were not available to them under previous Labor governments. They can buy their way into an Australian university even though the marks they might get may be lower than the marks that sons and daughters of working Australians may get.

The Labor Party considers that to be a disgraceful situation. It is a sign of the times. The ongoing Americanisation of just about every institution in this country is occurring under this government. What a shocking situation here in the 21st century when education, including a university education, is so vital to the prospects of young people that a government could change the arrangements such that those who have the money can jump the queue and buy a place ahead of better performing students who do not have the money. That is a true blue Liberal philosophy. It was the philosophy of the Liberal Party before the election of the Whitlam government—that is, that access to higher education should be determined by your wealth, meaning that the privileged had access and the underprivileged suffered.

The government has turned the clock back and, in fact, has made the situation worse for young people who do not have the financial resources. By removing a requirement to make changes to Abstudy through regulation as a disallowable instrument, this government is signalling that it is going to whack young people yet again.

Fundamentally, the government does not believe in a university education for working-class people and we have had ample statements from the government to that effect. Indeed, the former Minister for Education, Science and Training was very fond of labelling Labor members of parliament who believed in access to university education for the sons and daughters of working Australians as snobs.

Apparently, in the philosophy of the Liberal Party, you have a legitimate aspiration to go to university if you are from a family that is privileged but you do not have a legitimate aspiration to go to university if you are from a family that is not privileged. Those children, according to this government, really should go and get a trade. I see the Parliamentary Secretary to the Minister for the Environment and Heritage nodding to that proposition. It is indeed the Liberal philosophy. What a shocking situation we have here. The government has made a university education more costly for young people, and I again refer to those who are not from privileged backgrounds. It is quite happy to lock young people with talent who have worked hard out of a university education so that only the privileged may have access to it.

Some of the evidence that I will present here today confirms this to be so. For example, last year, for only the second time in 50 years, the number of Australian students going to universities fell. The early indications from enrolments in 2006 are that they may well fall again. Here we are in 21st century Australia where an education is the key to unlocking two doors, to prosperity and to a fairer Australia, and this government is presiding over a situation where there was actually a decline in entry into universities last year for only the second time in 50 years and in all probability again this year.

I also point to the fact that, since the change of government 10 long years ago, all of the enrolment growth in Australian universities has been by full fee paying foreign students. There has been no growth in enrolments by Australian students—no growth at all. It is almost beyond belief that a government could preside over such a situation where in the 21st century a university education is so important to a nation’s future, let alone the future of the students themselves. Deutsche Bank has released a report ranking Australia at the bottom in expected growth in university education. That Deutsche Bank report clearly shows, on the basis of its research, that access to university education is a very strong determinant of a nation’s prosperity and of its productivity growth. Yet this government has no commitment to Australian universities and certainly no commitment to a university education for those who do not have ample financial resources.

Here we are debating time after time the reasons for the slump in Australian productivity growth, which from the beginning of 2004 not only slowed down but actually turned negative and has been stuck in reverse gear ever since. For well over 1½ years this government has presided over negative productivity growth. Productivity growth as a result of reforms, including reforms to the university system of Australia implemented by the previous Labor government, was around 2.05 per cent per annum for the best part of 10 years. This was record-breaking productivity growth surpassing all countries of the Western world except Finland but including the United States. So we had a record-breaking decade of productivity growth, but the Productivity Commission, in examining the sources of that productivity growth, found Australia to be in almost the unique situation that the accumulation of skills, which had accelerated through the 1980s, slowed down in the 1990s following the election of this government. The accumulation of skills in fact detracted from productivity growth because of this government’s very low level of commitment to investing in skills and investing in higher education.

We also have the incredible record of being one of only two OECD countries where increases in private investment in university education have not been complemented by increases in public investment in university education as a share of gross domestic product but in fact have substituted for it. So, as other countries are investing in their universities, including both public and private investment, in Australia this government has presided over a situation where there is more private funding going into universities but which has not been matched at all by public funding but, instead, has substituted for it. That private funding overwhelmingly is coming from the students themselves, and it is the calculation that they are now making that has led to the situation of declining university enrolments by Australian students. When they have a look at their prospective HECS debts and when they consider their living expenses and prospective returns from a university education, prospective students are making the calculation that it is just not worth it.

Australia has become one of the most expensive places in the Western world to study and to get a university education. There is a clear pattern here, and that is that this government does not believe in our universities and in university education for anyone but the privileged. The government allowed universities to increase HECS fees by up to 25 per cent, and now all Australian universities have done so. They are cash starved universities—starved of cash because the government refused to properly index its grants to universities—so they have to seek other funding sources, and they are seeking them through full fee paying foreign students and also full fee paying Australian students.

The government has lifted the limits on the proportion of Australian students who can be full fee paying, and of course universities are responding in a predictable way: they are saying that they would prefer full-fee paying Australian students over those who are on HECS. That means that we are going to move more and more to an American system of very costly university education—and, as I indicated, we are already one of the most expensive places in the world.

Abstudy is a very important part of the calculation that Indigenous students make when deciding whether they will go on to university. With this legislation we have the situation where the government, prospectively, is going to make it a lot tougher for those students. Labor is very proud of its record in providing financial assistance for people to go to university. This government seems equally proud of its record of denying financial assistance to students wishing to go to university.

I will go now to one of the most bizarre turns of events that occurred in 2004. The then education minister, who was absolutely besotted with and determined to spend all his time on voluntary student unionism, had realised, upon the introduction of FEE-HELP, which is a loan scheme for full-fee paying Australian students, that there was a fundamental flaw in that loan scheme. That flaw is that it is capped at $50,000. As a result of increases in university fees for full-fee paying students, many courses cost, over the term of the degree, more than $50,000. It does not take a genius to work out that those students who do not have independent financial resources—that is, who are not independently wealthy—could not afford a full-fee paying place when that cap was set at $50,000.

Jon Faine, on radio station 3LO in Melbourne, interviewed the then education minister about that. The education minister agreed that this $50,000 cap was highly inequitable, it was highly regressive and it would prevent a significant number of young people who were not independently wealthy from going on to university. He seemed quite confident that he would be able to get the cabinet to remove that cap. But, as on so many other things, the minister failed and that cap is still in place. He is one of the greatest, most vocal critics of that $50,000 cap, and yet it is still in place—so ineffective was the education minister in his own portfolio.

Professor Bruce Chapman had a look at the impact of these arrangements and concluded that they were highly regressive, highly unfair. He pointed out what most people know: the benefits of university education flow to the broader community. In the 21st century, when higher education is such an important determinant of productivity growth and future prosperity, of course there is a strong case for public investment in universities. This is a point that is well and truly acknowledged by the architect of the HECS arrangements. It is understood by the government but rejected by the government, because it considers that most of the money going into the university system must come from full fees or from HECS charges, which have been increased by up to 25 per cent.

The philosophical divide between the coalition and the Australian Labor Party is evident in issue after issue after issue, but no more clearly evident than in regard to access to Australia’s universities by the sons and daughters of working people. The government considers that they should not have a legitimate aspiration to a university education. Labor considers that, fundamentally, in a decent and productive society, those students who work hard and who have talent but who nevertheless do not have high wealth should have such access to a university education.

This legislation again highlights the arrogance of the Howard government after 10 long years in proposing the removal of any requirement to vary the terms of Abstudy and the Assistance for Isolated Children Scheme be the subject of a regulation, which is a disallowable instrument. The government wants to make those changes itself, at its whim, and make life harder for recipients of Abstudy and the Assistance for Isolated Children Scheme. Such is the arrogance of this government after 10 long years. It is certainly time for the Australian people to have a fresh look at this government and make the judgment, which all people will make in 2007, that this government is arrogant, that this government has been in power for too long, that this government has run out of puff and that there is a very desperate need for a change of government—which will occur in 2007.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for Northern Australia and Indigenous Affairs) Share this | Link to this | Hansard source

Firstly, let me thank the member for Rankin for his contribution on the Student Assistance Legislation Amendment Bill 2005. I sat earlier this morning and listened to the member for Jagajaga, the shadow spokesperson, give her speech in this second reading debate. I was attracted to many aspects of that, and I will come to those in a moment. I also heard the member for Maranoa make his contribution. I must say that, oddly, there were some aspects of his contribution that I was quite supportive of, but I hope he reads his contribution and reflects upon it, in terms of not only this legislation but his government’s own position on education, particularly for those people who live in geographically isolated communities and other communities in rural and remote Australia where educational access is an issue.

I note that, in his contribution, the member for Maranoa referred to the need to provide access to affordable education for students, regardless of where they live. I am personally very attracted to that proposition. My electorate, the seat of Lingiari, covers all of the Northern Territory, except Darwin and its immediate environment around Palmerston. It covers 1.34 million square kilometres. It has a very widely dispersed population, and the issue of education is high on the agenda of the community.

Whether people live in small Indigenous communities spread, as they are, widely across the electorate, whether they live on Christmas Island, which is part of the electorate, or the Cocos (Keeling) Islands, whether they live in a small town like Borroloola, Tennant Creek or Alice Springs, or whether they live on a pastoral lease in the Northern Territory, education is high on the list of concerns that people have.

As the member for Rankin pointed out, as a result of the government’s attitude to, and its policies on, higher education, we have seen a drop-off in student numbers as reflected in the enrolments for last year. The affordability of education is of grave concern, particularly for those of us who live away from metropolitan centres—and even there it is cause for grave concern as well.

We heard the member for Rankin refer to the issue of full fee paying students and the penchant of universities, because of their need for funding, for full fee paying students so that they can provide the resources required to run their institutions. I had a conversation with a person only last week whose son or daughter was applying to go to university this year. They had achieved a TER score of around 93.8 per cent—a very good score—and had applied to go to Melbourne university. When that person did not get a first round offer for the course, they received a second round offer. When their parent rang the university, they discovered that the second round offer required full fees to be paid. The second round offer was conditional on the student paying full fees. I understand that this is not an isolated occurrence. It has happened at more than one university, but this instance was a major cause of concern to that parent and no doubt to the student.

This indicates that students with a very high tertiary entrance ranking, as in this case, are unable to get their first course option. They are offered a second option at the same university, provided they pay full fees. That is unfair, it is unreasonable and it is un-Australian, but it is happening today in the contemporary environment and it has been brought upon us by the way in which the government has developed and implemented policies on higher education. This young person lived in a capital city. How much more difficult is it for people who live away from home, away from their communities, because they have to travel to a higher education institution? How much more difficult is it if they need the assistance of their parents, not only to provide them with accommodation but also to address the cost of their HECS? You do not have to be Einstein to work it out.

I note that the member for Jagajaga, in her contribution, talked about a report from the Melbourne University Centre for the Study of Higher Education, which was released in June last year. The report demonstrated that students from rural backgrounds are twice as likely as their urban counterparts to defer studies at university. The research was titled—and I am quoting from the shadow minister’s speech—The first year experience in Australian universities: findings from a decade of national studies. The research found that one in five students from rural areas deferred university compared to around one in 10 students in capital cities. On page 70 of the report—and again I am referring to the shadow minister’s contribution—it says:

The reason for this difference is … likely to be the greater need for rural students to accumulate savings to meet their additional costs of attending university ...

That is absolutely correct. I live in Alice Springs and I know for a fact that there are a number of students leaving Alice Springs on this very day to go to university—students who finished high school, not last year but the year before, and who worked all of last year to save money so that they could afford to go to university. It is not an insignificant cost. As this research has indicated, it is now almost a practice for people in the bush who come from isolated communities or rural and remote areas to defer their university studies because they know that, in the first instance, they cannot afford the cost. How much more difficult is it for them if they miss out on their first round offer, get offered a place on a second round and are told they have to pay full fees?

What does that do to their capacity to attend university? What does it do to their horizons in terms of where they might see themselves next year and the year after, or in 10 years, 15 years or 30 years time? How much more limiting must it be for them if they know that, to get access to a course in medicine, they will be paying hundreds of thousands of dollars in fees—fees they cannot afford? The answer is very simple: unless they get a scholarship, they do not go. And that is a direct result of the policies which have been implemented by this government.

The member for Maranoa spoke about the aspirations of young people who live in the bush to have an opportunity to get a higher education, yet he is part of a government that by their very policies have undermined the capacity of young people in the bush, in remote communities and in rural areas across Australia, to get a higher education. They have done it. In my case, there is a university in Darwin—Charles Darwin University—which has a small campus in Alice Springs. Batchelor college provides higher education courses and post-school TAFE courses for Indigenous students across the Northern Territory, but it is located at Batchelor out of Darwin. That is it. Charles Darwin University is severely underresourced because of cuts made to its budget over successive years by this government.

It is little wonder then that most of the students—I would say as many as 90 per cent; it may even be more—who aspire to go to university who live in Alice Springs leave Alice Springs. They do not attend the Charles Darwin University campus because of the limited number of courses that can be provided. They go elsewhere: Adelaide, Melbourne, Brisbane or Sydney—you name it. You will find students from Alice Springs go there because they do not have access to the range of courses in their home community that they would otherwise have if they lived in one of these major metropolitan centres. I can understand that, in part, because clearly a small town like Alice Springs will not have a campus the size of Melbourne university. But the bottom line is that those students, if they want to go to Melbourne university, are now confronted by these roadblocks, and the most significant of those roadblocks is the cost of going to university.

This government needs to address the problem. The member for Maranoa is in an important position to influence what the government does—and I wonder why other members of the National Party are not in here talking about this, but they are not. The very pathetic performance of the National Party in defending the rights of students from isolated and remote parts of Australia is to be condemned. We know that they are a diminishing power in this place. Despite the artifice that they have put up about how important they are to the coalition, the fact is that they are a diminishing power. They are diminishing because they are not representing the communities that they are supposed to represent. They are not representing the interests of the people in the bush with regard to education. They have failed miserably in providing higher education and post-school education services to people who live in rural Australia. Yet we see the member for Maranoa supporting this piece of legislation, a piece of legislation which has the potential to cause great difficulty for students in the future.

I am mindful of the contribution made by the member for Jagajaga and her reference to the Bills Digest, in particular the commentary on schedule 2, part 2 of the Student Assistance Legislation Amendment Bill which will allow the Department of Education, Science and Training broader regulation making powers under the Student Assistance Act. The Bills Digest points out that these amendments ‘will limit the parliamentary scrutiny of important aspects of obligations set out in section 48 and the connected penalty provisions, and can create a certain vagueness of the law which may be impermissible from a constitutional perspective’.

Section 48 is a provision relating to the reporting requirements of people receiving student assistance. But it also restricts the operation of the Legislative Instruments Act 2003 and allows DEST greater regulating power. Departmental decisions and guidelines may well replace regulations made by the parliament. The explanatory memorandum explains that this will remove the need for DEST to:

… make new regulations under the Act whenever guidelines for the non-statutory ABSTUDY and Assistance for Isolated Children schemes are altered.

As we heard again in the member for Jagajaga’s contribution, the Abstudy and Assistance for Isolated Children schemes have supposedly been removed from the scope of the bill. One wonders what we are doing. What are we doing? Whether the Abstudy and Assistance for Isolated Children schemes are affected by this legislation in the end, I do not know, but I think it is a worrying reflection and a major concern that the government intends to remove parliamentary responsibility and oversight on the making of regulations arising out of this bill.

I have spoken before about these sorts of matters. But I read the Bills Digest with a great deal of interest and with a great deal of alarm. The commentary in the Bills Digest is worth reflecting upon. As the Bills Digest says, ‘proposed section 48(2) warrants further remarks’. It further states:

Section 48 of the SAA—

that is, the Student Assistance Act—

as it currently stands, creates an obligation to notify Centrelink when certain so-called ‘prescribed events’ occur. These prescribed events are currently set out in the Student Assistance Regulations 2003 (the Regulations) and include—

and it lists a number of things. It also states:

… provides that a notification under this section must occur within 14 days in accordance with the procedure set out in these Regulations.

To ensure compliance, there is a matching offence provision. Under that provision, a person may be liable to imprisonment for 12 months, unless there is a reasonable excuse for contravention of section 48. The Bills Digest also states:

Under the current regime, the Regulations enliven the obligation … are subject to parliamentary scrutiny and disallowance procedures—

as they should be. It goes on:

Under the changes proposed in this legislation, the Regulations can make reference to other instruments and written documents. These may not be subject to parliamentary scrutiny, but rather—

and the Bills Digest tells us—

may be an emanation of the will of the Executive.

What does that tell us?  It tells us that we might have changes made to the requirements and the obligations of students that will not come before this parliament. In the end, if they are not met, they may be punishable by up to 12 months imprisonment. I do not believe that is either fair or reasonable and we in this place should not contemplate it. Indeed, I think it is totally objectionable. We in this place ought to do all that we possibly can to ensure that the executive is not given this sort of power and that, in conjunction with the bureaucracy, it cannot come up with a new set of requirements that do not get the oversight of this parliament. It is already difficult enough for young people to get access and meet the requirements that they are required to meet under existing legislation.

I note, by the way, that I attended a Centrelink seminar on student assistance recently. I discovered, apart from a range of other things, that, if you are a young student wanting to claim youth allowance, the claim document is 36 pages long. I regard myself as someone with a reasonable amount of education—I have a degree, I have been a schoolteacher, I have been in parliament for a long time—and I found this difficult. I found it difficult because I cannot understand how it could come to pass that we are asking young people to fill out a form of 36 pages to get access to youth allowance. Imagine if you are from a family where literacy is an issue or where English is a second language and you get hold of a document like this which you are required to fill out to gain access to student assistance. Within this document it asks you—and this I found particularly interesting—to do and report on a number of things, including reporting whether or not persons of the opposite sex have stayed in the same premises as you for two nights or more and describing who those persons might be.

What are we on about here? This is a requirement in this form to attract youth allowance. Let me read it to you:

Do any people of the opposite sex regularly stay at your address?

Include:

• people who regularly stay at your address two or more nights per week.
• people who work away from home (e.g. sales, travelling, tourism, fishing, or mining industry, members of the armed forces, public servants).

I have to say I find it rather alarming that we should be invading the privacy of people in this way. I understand what it might be on about, but what a ridiculous proposition to put in a form of 36 pages for a young student trying to get youth allowance. Under this legislation, which will be changed today, other requirements could be put into documents like this which would go beyond the power of this parliament to scrutinise because they will not come here as regulations—they will be done by fiat by the executive and the bureaucracy. They could be requirements which, if not met, could be punishable by up to 12 months imprisonment.

What we should be doing here is ensuring that all Australians have access to affordable education. Instead we are seeing pieces of legislation such as this which in the end will limit opportunities for people, and we are seeing policies implemented by this government which are removing the opportunity for young people, wherever they might live, to attend university and other institutions of higher education. What we need to do is provide more opportunities, not fewer. What we need to do is make university and higher education more accessible, not less. The only way to do that is for this government to review its policies and practices and provide greater resources to people who live in the bush in particular. I invite the member for Maranoa and other National Party members to call on the government, as I am, to provide more money for people in the bush for education.

Chris Bowen (Prospect, Australian Labor Party) Share this | Link to this | Hansard source

The primary purpose of the Student Assistance Legislation Amendment Bill 2005 is to shut down a loans scheme for tertiary education students that the Howard government closed administratively in December 2003. Labor opposed the closing of this scheme administratively, and we will be opposing this bill—just as we opposed a similar bill which was introduced in this House in October 2003.

The Student Financial Supplement Scheme was introduced in 1993 by the Keating government to provide flexibility to students who were in need of extra cash to undertake their studies. The Howard government did not proceed with the bill to scrap the Student Financial Supplement Scheme, as it could not muster the numbers in the other place. This bill is a consequence of the government achieving a majority in the other place. The government, as I said, then closed down the scheme, using its administrative powers.

The Student Assistance Legislation Amendment Bill 2005 amends the Student Assistance Act 1973 and the Social Security Act 1991 to make it clear that a student cannot apply for assistance under the Student Financial Supplement Scheme under either act after the commencement of this bill. Under this bill, those with outstanding loans from the now defunct scheme will only have them grandparented until 30 June this year. From this date the repayment thresholds and rates of repayment will be much more onerous than those under the previous scheme and those under which the loans were offered and accepted. The government is once again seeking legislative approval to dismantle this loans scheme, using its majority in both houses. This is an opportunity for some senators in the other place to show some of their new-found independence and stand up for students, particularly in regional areas, who are in need of financial assistance to stay viable as university students.

I was interested to hear the contribution from my colleague the member for Lingiari, talking about the particular needs of students in rural and regional areas. He is more qualified than I would be to comment on that. It is true that rural and regional students have two particular causes to be upset about this legislation. Rural and regional areas have two particularly big problems when it comes to tertiary education. Many regional areas still suffer from very high unemployment, and high youth unemployment in particular, and the availability of part-time work is not as rosy as the government would have us believe for university students. And of course many students from rural and regional areas move to capital cities to study, as the member for Lingiari quite rightly indicated, with all the associated costs of city accommodation and living.

As I say, this is a golden opportunity for Senator Joyce and Senator Nash to exercise some of their new-found independence and to stand up for students from rural and regional areas. Let them stand up for students who are being affected by the closure of this loans scheme and put the needs of rural and regional students—and not the needs of their coalition partners, the Liberals—first, as they say they will. The member for Lingiari pointed out that it is an opportunity for members of the National Party—an opportunity not for the National Party in its entirety but for individual members of the National Party—to show some of their independence and to stand up for rural and regional students.

Of course, it is not only rural students who are badly affected by the abolition of this scheme. The government’s rationale for the abolition of this scheme is that it was introduced in 1993, when there was high youth unemployment. It says we have low youth unemployment now and it is no longer necessary. I have a newsflash for the government: there is not low youth unemployment throughout every single part of Australia. There are places where youth unemployment is still very high, and I happen to represent one of them. The unemployment rate in the Liverpool-Fairfield area, the statistical district which covers my electorate, is 7.3 per cent, but the teenage unemployment rate is 17.4 per cent. Yet this government says this scheme is now unnecessary because it is easy to get part-time work. Come to Prospect and see if it is always easy to get part-time work. Of course some students get part-time work—they work very hard for it—but it is not always easy to find part-time work which matches the needs of your tertiary education.

Students in my electorate go to a range of universities. Some of them go the University of Western Sydney. Many others of them go the University of New South Wales, the University of Wollongong, Macquarie University or the University of Sydney. But there are particular travel needs. I know of students in my electorate who attend the University of Wollongong and drive two hours a day to get there because that is the only university which offers the courses they wanted to pursue. They need to balance that with part-time work, and many of them do, but it is very hard to find part-time work which matches the needs of your tertiary studies.

This scheme which the government is abolishing had some flexibility about it. This was not only about grants and it was not about giving students and easy ride; it was about providing them with some flexibility, giving them a chance to balance their tertiary studies with their part-time work and with their other commitments. After all, we are encouraging young people to undertake tertiary education. We are meant to be going down the highroad of high technology and higher education and encouraging young people to go to university, yet this government is abolishing this scheme which provides the flexibility for tertiary students. Under this scheme which the government is abolishing, students were able to receive income support and to trade in $1 of grants for $2 of loans, increasing their income by up to $3,500 a year. That may not seem a lot of money to us, but it is a lot of money to a struggling university student. $3,500 a year can make the difference between continuing studies and having to give them up. That is the reality.

As I say, this provided options in balancing study with employment. Students who were ineligible to gain access to income support and whose parents earned less than $64,500 a year were able to access a category 2 loan of up to $2,000 a year. The scheme did fill a vital need for students requiring additional income support and provided an extra option for students to suit their individual circumstances.

This bill not only closes down this scheme but also increases the repayment thresholds for people who already have loans under the existing scheme. For somebody on an income of around $44,000, for example, the rate of repayment will move from two per cent of their taxable income to 4½ per cent. For somebody on $65,000, the rate of repayment will shift from four per cent of taxable income to 7.5 per cent. I simply make the point that these are not the conditions that were agreed upon when these loans were entered into. People entered into these loans with an agreed rate of repayment. The government are by legislative fiat now doing something which they could not do administratively. They could close down the scheme administratively, but they could not increase the rates of repayment administratively, and now they are doing that. For some people, that will be quite sustainable. Some people will not have problems with those increased repayment rates, but others will. These new thresholds are in line with the repayment thresholds of the government’s new loan scheme, the Higher Education Loan Program, otherwise known as the HELP scheme.

It is worth noting that the impact of the abolition of this scheme is not just that students have had to take on more part-time work or a second or third part-time job. I stress that the government might want us or the public to believe that this is about forcing students to take a part-time job so they pay their way through university. In many cases it is about forcing students to take on a second or a third part-time job to pay their way through university. They are already doing one job, already struggling with that, already working at McDonald’s or Pizza Hut or doing some tutoring at university. In some cases they are now being called upon to take a second or third job.

There is ample evidence to suggest that the impact of the government’s policy is that there have been people who wanted to study, wanted to increase their skill levels, but have been unable to because it has simply been financially unsustainable. When the abolition of this scheme was mooted in 2003 the Australian Vice-Chancellors Committee commissioned a report entitled Paying their way, which surveyed 35,000 university students and found that students were very positive about the scheme and that the scheme was necessary for many individuals to stay at university as well as supplementing their income from part-time work.

Another study also supports this, and this is not a study done by the Labor Party or done by the Vice-Chancellors Committee. This is a study commissioned by the Australian government, by the Department of Education, Science and Training. It is a study which the then minister sat on for some 12 months and refused to release. I could understand his reasons when I looked at the results. This report shows that a third of the respondents seriously considered ceasing their enrolment at university in order to earn more money, and a quarter of students indicated that they chose their classes to suit their work commitments rather than the other way around.

This bill is symptomatic of the government’s approach to higher education generally. Under the new FEE-HELP loan debt scheme, student debt will blow out to $3 billion by 2008-09, with up to 60,000 students incurring such a debt. These FEE-HELP debts are all about contributing to the payment of full fees, which might be as high as $210,000, as in the case of a medical degree at the University of Melbourne. I note that the existing legislation allows up to 200,000 students to access FEE-HELP places, with the government’s Senate majority allowing it to push these figures higher if it so desires. Of course, the national HECS debt has risen to over $13 billion. The government is cashing in from students and families to the tune of an additional $839 million over the next four years with the recent 25 per cent increase in HECS.

In 2003 the then Minister for Education, Science and Training—now the Minister for Defence—said this:

What that means in real terms is that the HECS charge for most courses in most universities will not change at all.

Of course, he could not have been more wrong. Never has student debt been as high and as large a burden for students as it is now. And never has it had the effect on living standards that it is having at the moment. Forcing students to take loans that are the equivalent of small mortgages is the reality that this government has forced upon people in the tertiary education sector. That is the reality. The government is forcing people to take mortgages to pay for their higher education.

Australia already has 60 university degrees which now cost more than $100,000. Let there be no misunderstanding: Labor introduced HECS and it is one of our proudest achievements. It is appropriate that people who benefit from tertiary education make a contribution to the cost. What is completely inappropriate is this government introducing punitive rates of repayment and punitive fees—including fees of up to and over $100,000 for over 60 university degrees around the country.

The accumulated national HECS debt in 2005-06 is a staggering $13.3 billion. The average graduate owes the government nearly $10,000. Departmental figures indicate that 91 per cent of students actually owe up to $20,000. Following the recent spate of across-the-board 25 per cent increases in HECS fees, students commencing university this year are paying up to $30,000 or more for their university degree compared to a decade ago. The Howard government’s HECS hikes mean that medical students will pay more than $30,000 extra over the course of their degree, law students will pay an extra $20,000, and engineering students will pay $16,000 extra.

It is little wonder that we have seen quite a remarkable phenomenon in the last few years: the number of people starting university in this country has actually fallen. In 2002, 251,845 Australians commenced a university degree; by 2004, that figure had dropped to 239,115. Between 1995 and 2000, Australia had the second lowest increase in the rate of enrolment in universities in the OECD. The good news is that we beat Turkey; we actually achieved more than Turkey. The bad news is that the rest of the world beat us.

This is this government’s contribution to higher education. It is a turkey of a policy, and this government should be ashamed. It should be ashamed because, to succeed as a nation, we need to be encouraging people to pursue higher education—whether it be through universities or TAFEs, whether it be traditional academic subjects or more trades based subjects. We need to be better trained as a nation. And this government’s contribution to our economic growth and to the betterment of our tertiary sector is to reduce the number of Australians who are able to start a university degree. We are, I believe, the only nation in the developed world that spends more on its private school sector than on its tertiary education sector. I say that not to highlight how much the government spends on private education, but to highlight how little it spends on tertiary education.

As I say, we have seen the introduction by this government of full fee paying for university degrees. Full-fee paying students at universities across Australia can get in with entrance scores that are up to 18 points lower than normal HECS students. The Howard government has done nothing to regulate entrance scores for full-fee paying students. The maximum five-point difference rule in university entrance scores between HECS and full-fee paying students is an absolute joke.

Last year the then Minister for Education, Science and Training had some things to say about entry standards at universities. Dr Nelson, the then minister, warned university vice-chancellors to review their entry standards because some students, he said, ‘should not be at university’. He said, ‘It is obvious we still see in 2006 a significant number of people going into university who should not be. It goes without saying that the lower the tertiary entrance result, the less likely it is that the student is going to be academically equipped for the academic program.’ What a revelation from the minister! He and I are in the white heat of agreement on that. But where we do not agree is that it is quite clear that his policies have contributed to that problem. He was the one who introduced the policy that you can buy your way into university, despite the fact that you do not necessarily have the academic record to get into university.

Anthony Albanese (Grayndler, Australian Labor Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

The dumb but rich clause.

Chris Bowen (Prospect, Australian Labor Party) Share this | Link to this | Hansard source

The dumb but rich clause, as my friend the honourable member for Grayndler says, very appropriately. Dr Nelson is the one who said that you can study as hard as you like, but if you miss out on a degree by a couple of points in your HSC or your matriculation studies in your home state, bad luck, but if you happen to come from a wealthy family and you can stump up $200,000, then in you go—it doesn’t matter what your HSC result was. That is a matter of some shame for this government.

So we have this government abolishing a student loans scheme, replacing it with a much less satisfactory scheme, increasing HECS debts and introducing full fees. We now have 60 university degrees across the country which you can purchase for $100,000, but this government is abolishing a scheme which enabled students to supplement their income with small loans of $3,500 a year, but loans which were significant in allowing people to continue their studies.

Labor will continue to oppose this legislation. I call on senators in the other place to oppose this legislation. I call on them to show some independence from their Liberal Party masters, to stand up for their constituents in rural and regional areas and make a difference for the benefit of young Australians doing their best to further their education.

Brendan O'Connor (Gorton, Australian Labor Party) Share this | Link to this | Hansard source

I would like to associate myself with the comments made by the member for Prospect, the shadow minister for education, and others on the side of the House, in opposing the Student Assistance Legislation Amendment Bill 2005. This bill is, of course, similar to the one that was before this place in October 2003, but this chamber and the Senate have, quite rightly, rejected the contents because, as the member for Prospect quite rightly said, this scheme has provided sufficient sums—not by any means great sums, but sufficient sums—to supplement whatever income students had in pursuing their education. There is no doubt that, by closing down this scheme, things will only get more difficult for students.

I do believe it is important that we look at the way in which this scheme and, indeed, what will follow it interacts with what has been happening to HECS, and what has been occurring in the education system—in particular, the way in which people can now purchase entry into university. It is certainly true—the dumb and rich proposition; like a good pasta sauce, thick and rich—that we have a situation where we are allowing people in based on the content of their bank account and not on their capacities as a person to pursue a particular discipline in a university. It is an awful thing. More than 90 per cent of the people in my electorate have an income of less than $50,000 per annum in gross terms. I would not expect one constituent of mine to be in a position to be buying $100,000 degrees up front. This measure compounds what is clearly an inequity in the system. It further disenfranchises very bright students from low socioeconomic backgrounds. We on the side of the House, as we did in 2003, oppose the closure of the scheme.

Like the member for Prospect, I thought that HECS when introduced was a balanced scheme. There was enormous disquiet among people in imposing a fee upon students who had hitherto not or at least for a significant period had not been required to pay fees. We are aware, of course, that many in this place—on this side and on the government side of the chamber—effectively managed to get a free education. Many ministers, including the Treasurer and the former minister for education, who was the architect of this original bill, received a free education when they went to university.

When Labor introduced HECS there was some effort to balance obligations and privileges for our students. If you look at the amount that was to be paid and look at the threshold of income that a student had to reach before that payment was triggered, you see we had the right balance. We had the right balance because the income that triggered the payments to HECS was one that was close to the average weekly income. In 1997-98 in the first Howard term we saw a dramatic reduction in the threshold income. It went from $27,000 per annum to $20,000 effectively overnight, forcing students into a position of paying back a debt on an income that was 25 per cent less than the income in the previous year, placing people close to the poverty line—indeed, below the poverty line.

It is true to say that the government has corrected that trend and did so recently, but for those many years since the 1997-98 financial year, the students of this nation were placed in a very difficult economic situation and found it increasingly difficult to maintain their studies and actually live a reasonable life on an acceptable income. We do not want to be creating disincentives for our talented young people to further their education. We do not want a system that is based on money rather than merit. We want an education system that expands and encourages our best and brightest to participate not only to further and improve their lot but that of this nation as a result of skills gained.

I do associate myself with the comments of earlier speakers from this side of the House on this bill. The government is wrong in looking to abolish the scheme. The Student Financial Supplement Scheme was a voluntary loan scheme which allowed students to borrow money to increase their income while studying. As I understand it, for every $2 of a loan, students gave up $1 in Centrelink payments. Repayment was voluntary until 31 May of the fifth year after the year the loan was received. Students got a bonus on repayments during this period. After the five years repayments were compulsory when taxable income reached the level of average weekly earnings, which in the 2000-01 financial year was $31,639, and were then paid through the taxation system. We thought that was reasonable.

Clearly it would be better if students did not have to take out significant loans. However, it is now increasingly likely because of the increased cost of HECS and just higher basic living expenses. This loans scheme was by no means perfect. It was not a panacea for all the problems that students may have had in pursuing their education, but it did provide modest support, it was a reasonable and fair system and it did ensure that students maintained their education and continued with their studies.

I am aware that the Senate inquired into this matter as late as last year. Their report and the recommendations therein were clearly not considered by this government. The Senate inquiry to which I refer released a report in June 2005 which said many things, including the following:

... the system—

this is talking about student income support as a whole—

operates with various disincentives, inconsistencies and anomalies which penalise the students who are in most need of financial assistance. Students from households with low to modest incomes, from regional and remote areas and Indigenous students are hardest hit by these systemic failings.

The report found that income support payments under Youth Allowance, Austudy and Abstudy are between 30 and 50 per cent below the poverty line, causing extreme financial hardship for increasing numbers of students and particularly Indigenous students. Clearly, the Senate committee thought that the combination of Youth Allowance, Austudy and Abstudy was not working, and therefore it made those comments.

There were many submissions made to the Senate inquiry. The submission made by the Australian Education Union quoted ACOSS figures. ACOSS compared the Henderson poverty line and social security payments for students, and their figures showed how student payments lie between 63 per cent and 82 per cent, well below the poverty line. So even now, for example, if the income provided by way of Youth Allowance or Austudy was the sole income of students—and I am not suggesting that would be the case in most circumstances—they would all be receiving an income below the poverty line. But as it is the case that the proportion of those payments is reducing, there is no doubt that, even with other forms of income, more students are finding themselves with an income below the poverty line.

Therefore, we are in a situation where students are going to opt out of education—regardless of their abilities, regardless of their capacity to further their education because of their academic excellence—based on economic considerations. Conversely, this government thinks we should be selling degrees, that we should put up shopfronts at universities and flog them off for $100,000. That is the reality. When the former minister for education turned up to universities, he should have just gone along with an ice-cream van and flogged off degrees like ice-creams for $100,000, regardless of whether those concerned had any capacity to pursue an academic career in a particular discipline. This is a government that clearly believes it is more important to be able to pay for a degree than to actually fulfil the requirements of a discipline at university. ‘Money not merit’ is pretty much the catchcry of this government: if you have money, you can get a degree.

Clearly, this loan scheme should not be closed. It was a modest but certainly a decent attempt to assist students in need. The Senate and the House of Representatives got it right in 2003, when they rejected a bill of similar substance. We on this side believe the legislation should not be pursued further. In reading some of the submissions made to the Senate inquiry, it is clear that students are doing it tough. For the life of me, I cannot understand why this government has such an enmity towards students. I cannot understand its pursuit of attacking students, knowing that in an economic sense it is a very vulnerable time for many of them. This is just another example of an insensitive, out-of-touch government not concerning itself with people who are doing it tough.

It will be the case that many students will survive this and go on to be qualified in their preferred area of expertise, but it will also be the case that, as a result of the combination of decisions made by this government in the area of education, many talented students will be knocked out of the system and we as a nation will be worse off as a result. Their personal ambitions will be thwarted and we as a nation will be worse off because, instead of encouraging people with talent, enthusiasm and academic excellence, we are saying to those who have difficulty in paying, ‘Too bad,’ and to those people who cannot qualify but who have the money, we are saying, ‘You’re welcome in.’

We do not want to see an education system in this country that favours people with money over people with merit. If that is what this government is about in the area of education then it has it entirely wrong. I think the people of Australia know that, I think the mums and dads who are trying to get their kids into post-secondary education know that, and I certainly know that the students of this country know that. That is why Labor opposed similar legislation in 2003, that is why we oppose this bill, and we certainly hope that the Senate does the same.

Ms Julie Bishop (Curtin, Liberal Party, Minister Assisting the Prime Minister for Women's Issues) Share this | Link to this | Hansard source

At the outset, I thank members for their contribution to the debate on the Student Assistance Legislation Amendment Bill 2005 today, particularly the member for Maranoa. I want to start by correcting some of the assertions made by the member for Jagajaga in her speech. She suggested that, while the Howard government had closed the student financial supplementary scheme in December 2003, it had failed to provide any other sort of student income in its place. That is just not correct. The member for Jagajaga has again failed to acknowledge the government commitment of more than $400 million over five years to provide more than 43,000 scholarships for university students.

This year alone more than 22,000 students from low socioeconomic backgrounds are set to benefit from the 2006 Commonwealth learning scholarships. This year’s $68 million worth of scholarships will provide new and continuing students with support for their tertiary studies. I will break that down. There will be 5,047 new students with a $2,080 education cost scholarship, 3,531 new students with a $4,161 accommodation scholarship, 7,529 continuing students with a $2,080 education cost scholarship and 6,518 continuing students with a $4,161 accommodation scholarship.

The member for Jagajaga suggested that students were forced into work to cover their upfront fees at university, including rent and transport. I remind the honourable member that, from 1 July 2006, university students will no longer be forced to pay upfront up to $590 in student union fees. This will put $170 million back into the pockets of students to determine what services, if any, they are willing to support. Finally, I remind the honourable member that, in the financial year 2004-05, the Howard government provided more than $2 billion in income support for full-time students.

In turning to the bill, I remind the House that the purpose of this bill is to amend both the Student Assistance Act 1973, part 4A, financial supplement for tertiary students, and the Social Security Act 1991 to ensure that these acts reflect the reality that the Student Financial Supplement Scheme was closed in December 2003. Under the old Student Financial Supplement Scheme—the SFSS—the Commonwealth Bank of Australia administered SFSS loans on behalf of the Australian government. Eligible students applied to the CBA for a loan of up to $7,000 per annum. This scheme was closed administratively on 31 December 2003 and no new loans have been issued since then. However, the Student Assistance Act 1973 and the Social Security Act 1991 do not reflect this reality, so the bill will remove the provisions pertaining to the scheme from both those acts. The bill will also amend both acts to provide for the alignment of the SFSS repayment thresholds and indexation with the Higher Education Loan Program under the Higher Education Support Act 2003. The bill will also apply the definition of ‘taxable income’ used under the HELP arrangements to the SFSS. The same repayment thresholds as apply to HELP will also apply and, for the financial year 2005-06, the repayment threshold is $36,184.

SFSS loan recipients earning below the minimum threshold will continue to be exempt from a compulsory repayment through the taxation system. Alignment of the two thresholds will simplify PAYG tax rates, which will reduce complexity for business, especially small business. While these changes will result in an increase in the thresholds at which the SFSS becomes repayable, that increase will be relatively small, will not have a major impact on graduates and will make payment administratively simpler for them. The bill will amend the Student Assistance Act 1973 to insert an express provision permitting the incorporation of an instrument ‘as in force or existing from time to time’ for the purposes of section 14 of the Legislative Instruments Act 2003. This will eliminate the need to make new regulations under the act whenever the publication—A guide to Australian government paymentsis altered. As indicated in the replacement explanatory memorandum for the bill, the power proposed in subsection 48(2) is not intended to permit the creation, determination or variation of prescribed events by documents other than regulations. In other words, prescribed events may and will only be determined expressly in the regulations. The bill also makes minor consequential amendments to the Taxation Administration Act 1953. I present the replacement explanatory memorandum and I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.