Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker Scott. I acknowledge you were in continuation and look forward to hearing the rest of your speech sometime soon. I rise to speak on the Social Security and Other Legislation Amendment (Income Support for Students) Bill 2009an important reform for regional and rural Australia and areas such as the mid-North Coast of New South Wales, where there is not a bricks-and-mortar university presence. Ours is an area with some of the lowest income levels, with some of the lowest lengths of stays in education and with some of the highest unemployment rates by comparison throughout Australia. So we are very sensitive to any reform in this area. Many aspects of these changes to Youth Allowance and trying to broaden the base for access to government payments to get students to university and help them stay at university—the broad suite of reforms that we are seeing—are genuinely pretty good. We are seeing increases, for example, to parental income tests. That is good. Measures such as the start-up scholarship are good. The actual amount of Youth Allowance is also increasing. That is good.

I sincerely hope that in areas such as mine, which are generally areas of lower socioeconomic status, and where traditionally students have remained in education for shorter periods, this reform package talks to the community and we do see some significant changes in those lengths of stay in education. If that happens, I think we will see those census figures on unemployment and income levels also change as a direct consequence of people being much more engaged for longer in the education system. That is the good news.

There are elements of concern, as we have heard many speakers in this place talk about. I certainly hope that the government keeps an eye on those issues of concern and also looks very closely at what I hope is a good report by the Senate Standing Committee on Rural and Regional Affairs and Transport. The report of its inquiry into rural and regional access to secondary and tertiary education opportunities is expected to be released later in the week. I hope there is nothing suspicious or sinister about this bill being introduced before the release of the Senate report. I will take it on face value that there is not, but as the process moves forward I hope that the minister and the executive take good note of that Senate report. From anecdotal reports, they have been doing some good work throughout regional and rural areas such as mine. I have faith that that report will be a good one, and therefore the challenge is for government to take up the recommendations as they are presented.

I also want to raise the outstanding concern that I continue to have about this package. I hope that, either via response from the minister or through some ongoing oversight of this reform, the government keeps a close eye on the issue of the workforce criterion for 30 hours of work a week, which is a substantial change to the independence test to receive Youth Allowance. This has been raised by many students. To their credit, they have been incredibly well organised over the last six months in responding, advocating and lobbying on the issues in and around this reform package, but this issue in particular remains outstanding. For regional and rural students, particularly in high-unemployment areas, I hope the government keeps an eye on the effects of this change from 15 hours a week to 30 hours a week. It is a concern that has been raised constantly since this reform package was announced. In areas of high unemployment, accessing 30 hours of employment a week can be difficult even if you want to. That does not necessarily mean that someone is not independent. It may mean that, in the closed economy of a regional or rural community, 30 hours of work a week is difficult to get for some 18-, 19- and 20-year-olds. I encourage the government to keep an eye on that reform. I can certainly understand the reason the change is being made and the argument that no-one wants people adjusting their behaviour to demonstrate a need to access government support. However, this shift from 15 hours to 30 hours of work a week to demonstrate independence has caused genuine concern in regional areas where there are comparatively higher unemployment rates than in some of the metropolitan areas. Those rates are well above state averages in most of the states of Australia and certainly in New South Wales. I ask the government to keep an eye on that.

I will not speak for long on this because I think, to their credit, the government have taken note of a lot of the concerns that I and my community have had since this announcement was made and, where possible, made some changes. I, along with two incredibly engaging advocates from the mid-North Coast, met with the minister along with several other members of parliament. We saw some changes made and they were good. That process was certainly appreciated. I finish, therefore, by congratulating those advocates on the ground. Within 48 hours, these young year 12 finishers and first-year employees were on the phones, getting organised, setting up Facebook sites and setting up a national network of people concerned about the impacts, particularly on some gap year students, of these reforms. The three musketeers from the mid-North Coast—Heidi Pett, Laura Bereicua and Jess O’Callaghan—ran an absolutely brilliant advocacy campaign. When 18-year-olds mount such a campaign, I would happily invite anyone who rips into young people and says they are no good or are layabouts to come and talk to me. I will introduce you to these three very engaging individuals and I am sure they will restore your faith in the generations to come. A big congratulations to those three in particular. There was some leadership from the Port Macquarie community, particularly from those three, in getting the 18- and 19-year-olds of Australia organised. As a local member, you cannot help but be proud to see people advocating and lobbying in a very professional way for their interests, their colleagues’ interests and their community’s interests—and, ultimately, the national interest. Congratulations to all involved in the campaign.

I hope the changes we have seen so far are good, and I certainly hope it is not the end of the road. The Senate inquiry into regional and rural students is important. I hope the government remembers that and does not just put the report recommendations on the shelf but tries to include as many of those recommendations into the finetuning of this reform package as possible. In an overall sense, I think it is a pretty good package and will hopefully engage more students from the mid-North Coast in tertiary education in the future.

Tony Windsor (New England, Independent) Share this | Link to 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.

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

Madam Deputy Speaker, I seek leave to continue my remarks.

Leave granted.

I thank the Minister for Social Inclusion for granting leave. I rise to continue my speech on the Social Security and Other Legislation Amendment (Income Support for Students) Bill 2009. Like the member for New England I have real concerns about the impact that this bill will have on students from rural Australia. I will continue where I left off last night. I found it rather ironic that this legislation has been introduced by the Minister for Social Inclusion because this bill will exclude so many rural and regional Australians from realising their dreams of attending university and completing a bachelor degree, a masters or even a PhD. That is a great tragedy for so many students and young people doing exams right now as they finish their secondary education.

What this bill will do is essentially force students who want to qualify for independent youth allowance to work some 30 hours a week, which is only 8 hours short of the maximum 38-hour working week under award conditions. Currently, a student can prove independence by fulfilling one of the three criteria: working full-time for a minimum of 30 hours a week for at least 18 months in two years, or working part-time for at least 15 hours for two years since leaving school, or earning in the 18 months since leaving school 75 per cent of the maximum wage A level, equalling some $19,532. The proposed changes push for the removal of the second and third of the three criteria I have just mentioned, a move the federal government claims will ensure that income support is available only to those who most need it while excluding approximately 27,000 prospective claimants and saving the government over $1.8 billion over four years. So in many ways this is not about the students from rural and regional Australia that the member for New England spoke about prior to my address; it is about a savings measure.

I know that we have had the Bradley review, and there are recommendations in that and some of those have been welcome in this bill, but I still have real concern for the young people of rural and regional Australia. I know that the changes have met with outrage. When the budget came down it was only a matter of a week and there was shock right across Australia. My office—and I am sure that most offices, including offices from the other side of the House, I might say—have been inundated with phone calls and emails, with stories about how this would affect students who have taken a gap year or who are in year 12 at the moment and have had the rug pulled right out from under them. They had plans about the gap year and this was really the first issue that had to be addressed.

I think the member for Lyons mentioned some of the comments on the Facebook, and I am sure that the minister, who probably has a Facebook, would have had some comments placed on hers. Young people are venting their anger, and I know that in my electorate they are. There is a group called the Bring Back the $18k Gap-Year Youth Allowance Eligibility Criteria. It was set up by the National Union of Students and has almost 11,500 members. Another group, named Keep the Old Youth Allowance, has more than 4,000 members. It is on the wall of that Facebook group that someone has perhaps best summed up this piece of legislation:

K.rudd needs a reality check, seriously.

These are young people, students, who use this technology—and what great technology it is to send a message. Young people are using these technologies and K-Rudd certainly, as it goes on, does need a reality check, because he and his education minister—and I welcome the minister in the chamber at the moment—talk about an education revolution and yet by handing down this legislation they are single-handedly destroying a future at university for many rural and regional Australians.

What message does this send to the youth of regional and rural Australia? Young people in non-metropolitan areas already are disadvantaged by the tyranny of distance. In order to undertake a degree they must move out of their home away from their family and set themselves up in a new city and a new place, buy furniture and textbooks and start paying rent. Many of these teenagers took a year off after high school to work so that they could qualify for youth allowance, which made it easier for them to move away from home and meet the high costs of setting up in a new town or city. The government’s changes to the youth allowance criteria, which are essentially retrospective, were a huge slap in the face to the some 30,000 gap year students who have taken 2009 off to make money in order to qualify for financial assistance.

After huge pressure from parents and students across Australia—and I acknowledge this—the minister made a partial backdown, which will help some of those gap year students. But there is still the criterion that applies concerning distance: as long as they live more than 90 minutes from a university by public transport. It is good news for the some 5,000 of the 30,000 students affected by these changes. Of course in my electorate of Maranoa we do not have a university. With the new boundaries it is 750,000 square kilometres in area, and I can assure you that we do not have too many public transport systems. Unlike the subsidised public transport systems in our capital cities where students can live at home and go to the sandstone or new universities and hop on subsidised public transport, we do not have those in Maranoa.

My electorate extends from Warwick, Darling Downs, and the Great Dividing Range right out to the South Australian and Northern Territory border. I was reading in today’s local paper, the Warwick Daily News: ‘Country kids’ dreams on hold’ about young people who want to return to the bush. I will share with the House one comment here from Bec, who says she believes:

… the changes may mean some students who put off further education might be lured by a steady income and unable to reinvigorate the study momentum.

She goes on:

I’m 18 years old so I want to get back into study and the workplace quickly. I don’t want to take two years off because I’ll be 20 when I start uni and about 24 by the time I finish.

This is not me speaking; this is a student from a country town in my electorate—no public transport there, no university within 90 minutes. It is more like a three-hour or four-hour drive. This is a young, bright person wanting to further her education.

Another young student, Hannah—and this is a very important point as well—says that the changes mean she will have to work 30 hours a week for 18 months or 15 hours for two years to be classed as independent from her parents so she can claim the payment. She says:

It just doesn’t make sense to make it harder, especially when there’s a shortage of doctors and pharmacists in rural areas …

Some city students turn up their noses at rural placements, rural kids will return to the country.

This is Hannah, who wants to study pharmacy. She is from a rural area and she would like to go back with her degree behind her into a country town and be a pharmacist. We have a great problem in my electorate in attracting people out into rural communities. It has been a great challenge getting professional people into my electorate. We have many workers on 457 visas, which is a visa classification allowing people to come into Australia and work in a geographic area in a particular profession or even in a blue-collar area.

I hope the minister is listening. This is a young person from a rural community who wants to go away and study pharmacy. She is from a rural area and she said:

Some city students turn up their noses at rural placements, rural kids will return to the country.

I hear that all the time. Minister, I am sure you have heard those sorts of comments. This is not the member for Maranoa speaking. These are people who know that these changes will disadvantage this family and might see this student deferring her education indefinitely—as the other young student said, she might not get the momentum to go back into study—and not going back into study. As I said, people like Hannah and Bec will return home. They will come back with their degrees in hand and they will bring those skills that we are short of at the moment. It is about training your own to come home. They will fill positions of accountants, lawyers, doctors and dentists—people we are short of in those professions out there. The member for Kennedy has just joined me.

Census data from 2006—only three years ago—shows us that the rate of students between the ages of 17 and 22 from Maranoa undertaking some form of higher education is 16.9 per cent or about 1,558 students. Not quite 17 per cent of young people from the electorate of Maranoa go on to further education post their secondary education. It is an issue that I think the member for New England raised. It is about how we are going to address the post-secondary education participation rate for students from rural and remote Australia—that is, for people who do not have a university within 90 minutes of where they live. They have to leave home. Their parents cannot afford to subsidise them to go to university without some financial support from the Commonwealth government. The ICPA have repeatedly raised with me the issue of a post-secondary access allowance. This is an issue that I acknowledge I championed when we were in government, and I will continue to champion it for the reasons that Hannah and Bec outlined as reported in the Warwick daily paper today. The issue is the fact that they have to leave home to gain access to a post-secondary education. There is not a university within an hour-and-a-half’s drive, except on the very fringe of my electorate near Toowoomba. They have to leave home to gain access to that education.

This bill will make some improvements. I acknowledge that, and I acknowledge that the minister has addressed the issue for those on a gap year currently—but it will not help those who want to do it in the future. Minister, I urge you to listen to the recommendations that may come from the Senate inquiry into this issue. If there is one thing that we in this place should be ensuring it is that we support students who want to go on and who should be encouraged to go on to post-secondary education. Too few from rural Australia do go on, but if we continue down this path—and it has been there for far too long—fewer and fewer people will bring the professional skills that we so desperately need in rural Australia.

We support students with a basic allowance if they have to leave home to gain access to a basic primary and secondary education. But once they have completed that secondary education there is not a basic allowance without an income or asset test. There is one in secondary and primary education, which I know previous governments supported and which this government continues to support and must continue to support, for those geographically isolated students. It is an issue that we must look at, Minister, for those who have finished their formal secondary education and are geographically isolated. To ask them to do two years work in the workforce to qualify for a youth allowance is nonsensical. As the local paper reported, Bec said she will get out of the habit of studying in those two years. She may remain in the community, put off that education and never return to further education.

As I said, there are some good elements in this bill but I know that the overriding negatives will have disastrous consequences for so many young people in rural and regional Australia. I do encourage the minister to listen to the recommendations of the Senate inquiry. I also urge the minister to support the amendments that have been put forward by the coalition. I certainly encourage the minister to rethink the changes that will save $1.8 billion. When you put a price on education for young people who are going to be denied it because of this legislation and these changes, $1.8 billion is not a lot to put towards supporting young people, particularly young people from rural and regional Australia who want to go on to further education and gain professional qualifications in order to return to our rural and regional areas, where we are so short of professional people. We are in desperate need of them. I would urge the minister to rethink the proposed changes.

Julia Gillard (Lalor, Australian Labor Party, Deputy Prime Minister) Share this | Link to this | Hansard source

in reply—I thank members who have spoken on the Social Security and Other Legislation Amendment (Income Support for Students) Bill 2009. In the way of these things, the quality of contribution has varied. But there we have it; that is our great parliamentary debating system at work.

I say to the last member who spoke, who gave a contribution that I think mirrored some of the things said by many opposition members during this debate, that I agree with him. I agree that the legacy of the Howard government for disadvantaged kids from country Australia is a truly shocking one; I agree with that. I agree that the legacy of the Howard government is that kids in his electorate do it tough. This government, piece by piece, bit by bit, is delivering an education revolution to make a difference to just that.

I would ask the member to reflect on the fact—which he knows, as I know—that disadvantage starts in the early years. This is a government that is investing in the early years to make a difference to disadvantage. The Howard government was the government that had us coming at the back of the class in the OECD. I think the member would acknowledge that this is a government investing in disadvantaged schools to make a difference. Under the Howard government no-one even bothered to ask for a list of disadvantaged schools, so disconnected were they from the reality of education today.

Nothing was done by the Howard government to put the best teachers in front of the classrooms that needed them the most. Nothing was done on a national curriculum. Nothing was done on the question of school leadership. Nothing effective was done on the question of literacy and numeracy. Then higher education was the subject of cutbacks, so people from the member’s electorate could not get opportunities in universities. We put universities on a growth path. The Howard government never bothered to try to work through the issue of how to get universities to enrol more people from low-SES backgrounds, including rural and regional backgrounds. The Bradley reforms delivered that.

Against this track record of neglect it has fallen to this government to make a difference for country kids—for rural and regional kids. This bill is doing just that. This bill, the Social Security and other Legislation Amendment (Income Support for Students) Bill 2009, amends the Social Security Act 1991 to implement a key aspect of this government’s landmark reform agenda for higher education and research after a decade of neglect. It has fallen to us to revitalise Australia’s university system, to put it on a growth path and to make a difference for the most disadvantaged students. This bill contains the government’s response to the recommendation on student income support from the Bradley Review of Australian Higher Education.

Student income support and other financial assistance is critically important to getting financially disadvantaged students into higher education. The measures contained in this bill ensure that student income support payments are better targeted and will provide more assistance to those students who need it the most. These reforms must be passed if we are to open up our university system to young Australians from disadvantaged backgrounds, something the Howard government cared nothing about and that we are acting on. We know from statistics that the Howard government’s legacy is a track record of failure.

To those opposition members who have participated in this debate, somehow assuming that under the Howard government there was some sort of Nirvana for country children, I point to the following statistics—the crushing reality that ought to require them to reconsider their position. Under the failed old system of student income support—the Howard government system—the participation of low-SES students languished at around 15 per cent, against a population share of 25 per cent. Participation by regional students at university fell to 18 per cent, against a population share of 25.4 per cent—underrepresented and going backwards under the Howard government’s student income support system.

Even some Liberals have finally been prepared to say that the system they created has failed. I refer to the contributions of the member for Casey when he was the shadow education minister, who at least had the courage to pan the former government’s scheme, in a speech a little more than a year ago, when he said about the Howard government’s student income support scheme:

… it has become too easy for students from affluent backgrounds to qualify and too difficult for students from modest backgrounds …

He was right. He further noted that the current system:

… particularly disadvantages many students—particularly those from the country—who have to leave home to study, and has resulted in a situation where record numbers of students … defer their studies with many of them taking a year off to earn money to qualify for independence for Youth Allowance and possibly not returning.

He was right about that—a good perceptive criticism of the circumstances the Howard government had left regional and rural students in.

Under the current system the parental income threshold for students to access support as dependents has become so low that many students have thought that the only way to gain access to student income support is to qualify as independent youth allowance recipients. This has often caused them to delay their studies for a year, potentially not returning. Many of these young people are not actually financially independent of their parents. The Bradley review found that as a result of the current independence test youth allowance is being accessed by some students who are living at home in higher-income households.

For example, the review found that 36 per cent of independent students living at home were from families with incomes above $100,000 per year, 18 per cent were from families with incomes above $150,000, 10 per cent were from families with incomes above $200,000 and three per cent were from families with incomes above $300,000. Yes—you heard that right: government dollars going to kids who live at home in households that earn more than $300,000 a year whilst the participation rate of poorer students and country kids is going backwards. Someone had to fix that disgraceful situation. The government has made the sensible decision, in view of this track record of failure and inequity, to tighten policies—

Opposition Members:

Opposition members interjecting—

Julia Gillard (Lalor, Australian Labor Party, Deputy Prime Minister) Share this | Link to this | Hansard source

The disgrace I refer to is the fact that the two opposition members at the table were participants, as ministers, in a government that watched country kids and poorer kids go backwards, go out the back door whilst they cheerfully made sure that kids who lived at home in families with incomes over $300,000 per year got precious taxpayer support. That is the record of the Liberal Party members sitting at the table—a disgrace. We are fixing this disgrace. We have made the sensible decision to tighten the current workforce participation criteria for independence in line with the recommendation of the Bradley review, and we are redirecting funding into a massive suite of reforms.

Parental income will now be the primary measure of eligibility. More students who previously had to prove independence and wait 18 months to receive support will now be able to access support automatically as dependants through the raised parental income test. Key elements of our changes include the fact that all students who receive youth allowance will receive a $2,254 start-up scholarship every year unless they are currently receiving another equivalent Commonwealth scholarship. This will benefit around 150,000 students next year. The parental income test will be raised so that families with two children studying away from home can earn more than $140,000 before their allowance is cut completely. The higher parental income test particularly recognises the needs of families whose children need to move away from home to study—and the member for New England referred to that. Over 100,000 students will benefit from either receiving the allowance for the first time or getting a higher rate of allowance.

Students who want to move to study may be eligible for an additional relocation scholarship—and the member for New England referred to that—worth $4,000 in the first year of study and $1,000 in each subsequent year. This will particularly benefit rural and regional students. From 1 July 2010 students will be able to earn $400 a fortnight up from $236 without having their payments reduced. The age of independence will reduce progressively from 25 years to 22 years by 2012, which will see an estimated 7,600 new recipients of the independent rate of allowance. The reforms to Youth Allowance will have consequential effects for Abstudy and in some cases Austudy.

Now let us have a look at who has endorsed these reforms and we find people who care about education. The Group of Eight universities has endorsed these reforms; the Australian Technology Network has endorsed these reforms; the National Union of Students said of our budget measures:

This is a big win for students, a substantial investment in future productivity and jobs.

The National Union of Students said on budget night:

Thumbs up for massive education funding, thumbs up for massive student income support.

Universities Australia, the peak university organisation, has lauded these changes saying:

Lowering the age of independence progressively from 25 years to 22, and ensuring student support can be claimed by more of those students who are truly in need is commendable.

This is a system that deserves the support of this place and of the Senate. Can I say, obviously in the transition to the new system there are a number of students who told us, while they liked the new system and they understood why we were changing the system, they were concerned that current gap year students who needed to move to study would be caught between the old and the new systems. After wide consultation the government announced a transition measure to allow gap year students, who completed school in 2008 and who need to move to study, until 30 June 2010 to qualify for independent status under the workforce participation criterion. This will be financed by delaying until 1 July 2012 the introduction of an increase to the amount of money students can earn from part-time work while receiving income support to $400 per fortnight. These were sensible changes that have been welcomed by students and the peak organisation of universities.

Unfortunately the coalition, presumably still wedded to its past track record of discriminating against country kids and poorer kids and favouring kids who live at home in richer households, has not as yet indicated that it will pass this bill in full. Inexplicably it has put forward amendments before the House that will permanently cut support to students to deal with what is essentially a transition issue. The coalition wants to delay the new independence criteria by a year for all students including those living at home, but to do this it wants to rip almost $700 million from scholarships by permanently—it is an important word, permanently—reducing the value of the new student start-up scholarship to $1,000 per annum, a permanent cut to the amount of money going to students. This will cost students on income support over $3,700 over a three-year degree and leave 150,000 students worse off. That is what the coalition amendments mean. Now, clearly, they need to be rejected on that basis.

I would also note that, whilst the coalition have put forward a fig leaf of $120 million for a rural and regional scholarship to try and disguise this permanent cut, there are absolutely no criteria attached to it. So how do we know the coalition will not be back to their old tricks of making sure that students in upper income households get this money, because that is the system that they used to operate in government and did nothing about? Students who are at the centre of these reforms do not support the coalition amendments. The National Union of Students has called these proposed amendments—and I quote—‘scabby and sloppy.’ That is the approach of the coalition in their amendments.

The government will not support these scabby and sloppy amendments. We will not support a $700 million rip-off out of scholarships. Clearly the coalition, after their track record in government, come to this debate with no credibility. We will press to have this bill passed not only here this evening but also through the Senate and it will be clearly to the disadvantage of Australian students, a disadvantage for which the coalition will be fully responsible, if they do not pass these Bradley inspired reforms in the Senate expeditiously. With those words I commend this bill to the House and I urge all members to support this bill in its entirety.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.