Natasha Stott Despoja (SA, Australian Democrats) Share this | Link to this | Hansard source

The Student Assistance Legislation Amendment Bill 2005 legislates for something that has already been done—that is, the closure of the Student Financial Supplement Scheme, the SFSS. As honourable senators may be aware, the government first moved to close this scheme in 2003. The rationale that was offered at that point included a reduction in the number of people taking up the scheme and the level of debt as a consequence of taking up the scheme if you were a student.

I do not think the declining demand for the scheme should take anyone by surprise. As the Democrats consistently noted—in fact, from when this particular scheme began—the scheme was fraught with difficulty. It was first established in 1993. We found it a punitive and miserly measure that targeted vulnerable people in particular—that is, people from lower socioeconomic groups or rural and regional students; those who were already in financial straits. Without income support, those groups of people would have had little opportunity for pursuing further study, so it became an important crutch, if you like, for people who wanted to study and were therefore prepared to incur unreasonable levels of debt.

With the SFSS, students found themselves trading in $1 of their student income support for $2 of loan. The entitlement that was traded became part of the loan, leading to quick debt accumulation. Many students were not aware that they were actually trading their entitlement for a loan. A number of student representative groups, peak groups, in Australia rejoiced at the closure of the scheme because it unfairly penalised people already struggling with university costs, debts and, of course, university fees, and they felt that this was luring students to forgo income support to which they were entitled.

So the Democrats are not unhappy to see this scheme closed. When this was first announced in 2003, I was very up front about the fact that we did not think that this was an appropriate scheme and that it was not a fair one. Mind you, we were strongly arguing for other support measures to replace it. Nonetheless, my main concern was how we were going to look after the students who were already in the scheme—students who had those loans and required those loans for the duration of their degree.

The Democrats did not simply plan to introduce amendments, but, as I recall, I did introduce amendments. As I recall, I circulated amendments in this place in 2003. The intent of those amendments was to grandfather the students who were already in the scheme. As senators may be aware, the government saw the writing on the wall. Of course, this is pre the coalition-run Senate. That means that those of us on the crossbenches and in the non-government parties could have succeeded in passing the amendments to grandfather the students who were in that scheme. In fact, I remember having discussions with the Independents at the time, particularly Senator Harris, as I recall, who was also particularly keen to ensure the protection of the students and the families who were already affected by the loan scheme.

I am sure that many senators, like my office, had many phone calls, faxes, pleas, letters et cetera from families and individual students, pleading with us to ensure that this scheme, upon which they relied, would not be shut down. But the government saw the writing on the wall and decided to do what we are probably seeing a lot of these days, but, nonetheless, it still surprises me. In fact, the last time that I can recall it happening while I have had this portfolio, which is almost 11 years, was for the closure of NBEET, the National Board of Employment, Education and Training. Senators may remember how that was closed down in an administrative way—the board ceased to exist—before the legislation was passed.

So what did the government do this time? They closed it down administratively and now we are dealing with the legislation. I do not know whether it has escaped people’s notice but it is actually 2006 now—just a couple of years later. I am glad that the government have got around to it, because I was really looking forward to this democratic opportunity to debate, weigh up the methods and the process, and determine whether or not it is an appropriate thing to do. We lobbied the relevant minister. We made very clear to ministers, their advisers and others that we wanted to install a sunset clause in the legislation to protect the students in the scheme who, let us face it, effectively just had the rug pulled out from underneath them, but unfortunately that was to no avail. Although we recognised that the scheme was inequitable—I remember that one student financial adviser described it as ‘insufficient, mean and tricky’; that might be applied, too, to the process with which it was closed down—many students relied on the scheme to fund their study. To shut it down without offering anything in its place was a mean solution.

Senator Wong made reference to some of the statistics. They are pretty alarming, but they are worth putting on record so that government members understand what they did. In the last year of its operation, nearly 40,000 students applied for and accepted an SFSS loan. Many of those students were from traditionally disadvantaged groups, more than half were woman and 15.2 per cent were listed as recipients of the single parenting payment. Those are the types of people who were being disadvantaged by the sudden closure of the scheme, without any replacement, grandfathering or other forms of support.

The abolition of this scheme without the grandfathering of those already relying on it to facilitate their study had, I think, such a mean impact. It did affect the ability of some students to finish their degrees and courses. People told us that it put their study in complete doubt. So the bill now officially brings to a close a scheme that has already been ditched. Still we hear nothing about potential replacements for this measure. Look at the budget last night. Where is student income support? I should not be so naive as to even ask that question. In the last decade it has not been there. There has been nothing on student income support. It is bad enough that the skills shortage was not addressed and education was not really invested in. There was nothing for schools. Higher education—what a joke! As for raising the FEE-HELP cap—please—that is just more debt for students! There was no student income support, although we know that it is one of the key measures to facilitate participation in higher education for lower socioeconomic and other disadvantaged groups. This is just another example.

I think that student income support in this country is in an appalling state of neglect. That has been caused by successive governments, but at least the Labor Party in the nineties was trying to achieve some changes, albeit not enough. But the last decade has just been absolutely appalling. In fact, if senators are interested or if they have any doubts about the appalling state of neglect, just look at the Senate inquiry that the Democrats initiated—the first income support inquiry that looked solely at student income support. Look at some of the statistics contained in that Employment, Workplace Relations and Education References Committee report and listen to the stories that students, advisers and others told. Probably we heard most of the extremes, whether it is students being forced to work in the sex industry or, as I heard at the committee hearing in Adelaide, students being used as guinea pigs for medical experiments in order to earn some money.

We listed the anomalies and punitive measures that actually exist within the current system, such as Austudy recipients not being eligible for rent assistance. This is one that still staggers me. Why on earth is it that if you are on the common youth allowance you can access it, but you cannot if you are on Austudy? When I have put this to people, including people high up in government, no-one has come up with a rationale. Even at the committee hearings, no-one gave me or the committee a convincing reason for it. I still hope that maybe in next year’s pre-election budget we might see some action on this. Another issue is the part-time postgraduate scholarships in relation to taxation.

It was reported that students who are single and over the age of 25 who are ineligible for rent assistance are eking out an existence on a payment that is effectively 49 per cent below the poverty line. Economic survival has usurped academic success as the main object of many students. The committee report says:

The result is that many students find themselves in a precarious financial situation, struggling to provide themselves with the basic necessities of life.

What does the government think—that living below the poverty line for students is somehow a rite of passage? Is it some sort of outdated romantic notion of students studying at university today—that it is about eking out an existence? Do they think that is what you have to do to earn your degree?

The vice-chancellors do not agree with that archaic image. The vice-chancellors—and, as I often remind people, they are not the most radical organisation—have been at the forefront of the arguments for reform of student income support in this country. They are worried about the statistics that show how many students are missing classes, tutorials, lectures and study time as they have to work to support themselves because of the lack of income support, the paltry amount of income support and the inaccessibility of income support in Australia today. Many students are spending hours off campus working in part-time jobs. The committee found:

They are working longer hours than before to the detriment of their studies and their overall experience of university.

I would add that the National Union of Students recently found that almost one-third of part-time students work more than 16 hours per week. It condemned the state of student income support under the current government. The report goes on to say:

The committee believes the financial situation of many students under the policies of the Howard Government is grim, and that the evidence presented to the committee during the inquiry shows that it has deteriorated even further over the past few years.

In addition, the potential impact of the introduction of so-called voluntary student unionism is going to have a hugely deleterious effect. What did we see in the budget last night? We saw the cheap, sell-out, transitional fund—$81 million or whatever it is. Well done, Family First! That is great. That is putting families first. What a cheap sell-out! I think there was also a $10 million scheme for small businesses to encourage them to set up on regional campuses that may be adversely affected by the impact of voluntary student unionism. Mr Acting Deputy President, I misled the Senate. Remember, that transitional fund relates mostly to sporting and recreational facilities on campus. It is not about other issues. So students are in for it yet again. I start to think it is about a rite of passage now. I do not believe that those government ministers who got their education publicly funded necessarily believe that that is what the next generation should have or deserves.

Severe rules on eligibility for student income support have prevented many students from accessing it at all. The inquiry found that the parental income test threshold is too low. It is not keeping pace with wage increases and, indeed, the cost of living. This valuable report comprehensively and thoroughly examined the sector. It examined the issues, particularly the shortcomings of student income support. Despite the fact that the government had representatives on the committee who concurred with the recommendations—remember, there was a majority signing-off on these recommendations—and despite the fact that the government members signed off on the recommendation that rent assistance be extended to Austudy recipients, the government has done nothing. The committee recommended that a costing on this measure should be undertaken and completed before the end of 2005. Well, we missed that deadline. Then again, if you look at the rate of progress, it has only taken 2½ years to close down a scheme that has already been closed down. Maybe we are working in dog years.

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

No, they have the numbers!

Natasha Stott Despoja (SA, Australian Democrats) Share this | Link to this | Hansard source

They have the numbers now, says Senator Wong. It is true. But, even with the numbers, is there any consideration left for process and convention in this place? My goodness! In the last round of estimates I asked the government what they were doing about the inquiry recommendations, only to be met with pretty much a non-response. What a difference extending rent assistance to Austudy recipients would make! A recent study found that more than half the part-time students surveyed would prefer to be in full-time study if their finances permitted, and a third believe a lack of government support is preventing them from studying full time. The study also revealed that part-time students were more likely to come from lower socioeconomic backgrounds and tended to have attended public schools. Current measures of student income support are clearly inadequate to overcome seemingly more entrenched inequities in the higher education sector.

I remember, back in 1990, that the then education minister published A fair chance for all, as part of an overview of the higher education sector. It contained the principle:

The overall objective for equity in higher education is to ensure that Australians from all groups in society have the opportunity to participate successfully in higher education.

Well, let us look at the participation rates in the last decade. Equity groups have seen a decline in their participation rates. They have either declined or remained stagnant. For example, participation of students from lower socioeconomic backgrounds has fallen slightly, as has that of Indigenous Australians. That is understandable given the many cuts that have taken place, particularly to Abstudy since 2000. So much for this equity. Higher education has endured a barrage of attacks, funding cuts, cost shifting and cost increases. Everyone knows the litany of what has happened to education funding and support.

The National Union of Students released a report this year on the past 10 years in higher education, which contained a number of concerning findings. Accumulated HECS debts have risen from $3.9 billion to $13.2 billion during the decade. I mean, this is huge. The average student contribution to university operating costs increased from 14 per cent to 42 per cent, while the Commonwealth’s contribution has decreased from 61 per cent to 41 per cent. The student to staff ratios have increased from 15.6 to 20.7.

So, while this bill does very little that has not been already achieved administratively, it does once again highlight these issues and the government’s response to them, particularly to student income support. This bill contains, as has been acknowledged in the previous contribution, a potentially risky subsection that requires clarification. The proposed subsection 48(2) seeks:

... to eliminate the need to make new regulations whenever the Guide to Commonwealth Government Payments is altered.

However, this subsection may have the unintended effect of limiting the parliamentary scrutiny of changes to guidelines for Abstudy and the Assistance for Isolated Children schemes. Of issue here is the proposed new subsection 48(2), which relates to notifying Centrelink of a change in circumstances, for instance a change of course enrolment. It has been pointed out that the proposed change is unclear whether the term ‘notifying’ includes or excludes prescribed events, where ‘prescribed events’ refers to the reasons for notifying Centrelink, such as a change in circumstances. If ‘notifying’ does include prescribed events, then DEST may have the power to prescribe when, under which circumstances and how a person notifies Centrelink of a change of details. If ‘notifying’ does not include prescribed events, it is restricted to how a person may notify Centrelink. So there is concern that the department can change when or under what circumstances a person must notify Centrelink without this decision being subject to parliamentary scrutiny.

Given the possible punishment for those failing to meet these obligation—up to one year in prison—it is imperative that ‘prescribed events’ cannot be changed without parliamentary scrutiny. I notice that the government was concerned enough about this clause to issue a replacement explanatory memorandum to shed light on what the subsection does and does not do. However, the bill itself has not been changed to this effect. Unlike the actual legislation, the explanatory memorandum and the clarification made in it is not binding. So we believe the clarification should be included in the bill to make this explicit.

I understand that Senator Wong made a similar comment, and I note the amendment which she has circulated. I draw the Senate’s and the Labor Party’s attention to an amendment, which they may be aware of, which I circulated in this place on 2 March 2006, which seeks to do the same thing. I think we are both after the same objective. I have not worded my amendment—on behalf of the Democrats—the same as the Labor Party amendment because the advice that we received after initially considering drafting it in the same format was that it was still ambiguous and that this was the better way to draft it. Having said that, we can probably read the numbers. I am not confident that either one will be successful. We considered drafting it in a similar fashion but we had advice, mulled over it for a long period of time and decided that this is the amendment that we are proceeding with today. But I think we are pretty keen to achieve exactly the same outcome, and there may be some on the coalition side who have similar views—yes, crazy—about process, parliamentary scrutiny and clarifying things that may actually need clarification in law. I do not know—call me crazy, but we will see—if anyone will actually consider that. Nonetheless, this legislation will of course be passed. It is a travesty that it has taken this long. It is appalling how undemocratic the process has been. For it to take from 2003 to 2006 is pretty pathetic. We are moving an amendment; I foreshadow the amendment moved in my name on behalf of the Democrats to at least try and clarify what could be quite a deleterious aspect of this bill.

Amanda Vanstone (SA, Liberal Party, Minister for Immigration and Multicultural Affairs) Share this | Link to this | Hansard source

I would like to thank senators for their contributions, and there are a few points I think should be put on record. Senator Wong has apparently stated for the Labor Party that the most important issue is to ensure parliamentary oversight of eligibility and access criteria for student assistance. In response to that, it is important to say that the government has continued commitment to student income support. However, in this case, the concerns she has raised about this bill are based on a misunderstanding. The only instrument or other writing in question here is A guide to Australian Government payments. It sets out a statement of benefits and basic eligibility criteria. However, this instrument merely reflects details which are set out in the regulations. It is published quarterly for the information of the Australian public.

At present, every time A guide to Australian Government payments changes the department is required to amend regulation 5 in part 2 of the Student Assistance Regulations 2003. The current reference to the guide in those regulations is 20 September 2004. Right now, the reference is wrong and out of date. The current guide to Australian government payments—the one that applies to the Australian public—is in fact dated 20 March 2006 to 30 June 2006. Rather than amending the regulations every time a new version of A guide to Australian Government payments is issued, which is every quarter, the department seeks the flexibility to refer to any instrument or other writing as ‘in force or existing from time to time’ to save the requirement of this quarterly regulation change. That is the whole purpose of the government’s amendment: to avoid the obligation to amend the regulations every three months. You can clearly see that this obligation is now not fulfilled as punctually as required and this can therefore mislead the public as to the correct version of the guide in operation.

The purpose of the government’s amendment is not to hide new eligibility or access criteria. The government’s amendment has no impact on parliamentary scrutiny. As indicated clearly in the revised explanatory memoranda, prescribed events are all set out in the regulations. That is the principal purpose of the regulations and it is clear that there is no intention to depart from those arrangements—none at all. The government’s amendment is intended to avoid wasting departmental time and avoid any prospect of misleading the Australian public as to the most up-to-date version of the guide.

Labor’s amendment does not provide any assistance to the department; on the contrary, if it were accepted, Labor’s amendment would require the department to make a whole new second set of regulations. One set would relate to the procedures for notifying the department of a change of circumstances, which could refer to the other documents, like A guide to Australian Government payments, and a second set of regulations, which could refer to eligibility criteria and prescribed events. Quite the opposite of making it easier and simpler, it would get worse. There is no gain here for the Labor Party. There is no additional scrutiny of eligibility criteria and prescribed events. As is the case now, eligibility criteria and prescribed events would be set out in the student assistance regulations. There is no gain to the department, which wishes not to have to amend the regulation every three months. There is no gain for the public, who can be and are being misled by the reference to an old version of A guide to Australian Government payments.

The Australian Democrats amendment is similarly misdirected. Again, they do nothing to assist the waste of departmental time in amending the regulations every three months. Instead, they require that there be a second set of regulations. In this case, one set can relate to anything but prescribed events and can refer to or adopt other instruments or documents. Another set can relate to prescribed events. There is no gain for the Australian Democrats and, for the sake of clarity, let me go through it again. There is no additional scrutiny of eligibility criteria and prescribed events. As is the case now, the specific eligibility criteria and prescribed events would be set out in the regulations. There is no gain for the department because it still has the three-monthly problem and there is no gain for the public, who are currently being misled. It is just bureaucratic time wasting. We therefore do not accept either the Labor or Democrats amendments to the bill.

Question agreed to.

Bill read a second time.