John Williams (NSW, National Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by the Minister representing the Minister for Education (Senator Carr) to a question without notice asked by Senator Adams today relating to Youth Allowance.

I would like to contribute to the debate on the very important issue raised by my colleague Senator Adams today in question time; the issue being the government’s changes to youth allowance handed down in the budget on 12 May this year. Coming as you do from a regional and rural area in South Australia, Mr Deputy President, you would be well aware of this issue too. The point I make is that this is the hottest issue that my office has ever had to handle in my brief time in this chamber.

There are two problems with this change to the youth allowance. The first one is how the government has changed the goalposts halfway through the game. Those students who have taken a gap year this year have gone out and found a job. Some I know have sacrificed a scholarship after Centrelink advisers told them they are better off to sacrifice a scholarship, take a gap year and declare independence from their parents. They are the first lot that are going to be severely damaged, if I could use that word, in this change of policy by the government. The situation is simple. Instead of them just taking the gap year and earning a gross wage of some $19,500, from memory, the government has changed the rules so that they must work for 30 hours a week for 18 months. So, under these regulations, those students planning to go to university in March next year for the start of the term now do not qualify for youth allowance. As I said, the government has changed the goalposts halfway through the game. Those people are livid. The parents are annoyed. As you would be well aware, Mr Deputy President, parents want the best thing in life for their children. They want a good education for their children, to see them go through year 12 and take a gap year. For them to be constrained from attending university and carrying out tertiary study is a complete knockdown for not only the students but also the parents.

I would like to refer to a letter I received from a person involved in the public sector. This lady makes it quite clear on one issue, and I will read it out to you:

Parents and students are all angry that the Government has changed the rules halfway through the game. As all the students have deferred their courses already, and I have checked with two Queensland universities, they cannot defer a second time. As a result they will have to surrender their place and take their chances at a second round, no guarantees they will be successful in obtaining their original choice.

What she is saying is that those who have to defer again may not get back into the university or the studies which they have already applied for and been accepted for. She goes on to say:

It would also mean that these children will be out of study for two years if they are forced to attempt to meet the 18 month two year full-time employment. They all feel betrayed and discriminated against.

My writer goes on to say:

Secondly, it will affect rural students and families the most as it is the biggest strain on these families to send their children to university, the major cost being the accommodation component. These families are not affluent, as suggested in a recent Australian newspaper article.

In answering a question today, Senator Carr referred to those in a niche market—those living out on properties, many of whom have suffered drought since early 2002. Many parents have suffered the situation where there is no crop, where they have to buy fodder to keep their stock alive, where they get low yields with their wool and where they do not have the weaner cattle to sell off. These families are the niche market that the minister refers to. These are the ordinary people who wish to pursue a tertiary education. These are the future doctors and nurses, the future dentists and veterinary surgeons, the future lawyers et cetera. These essential services are required not only in the cities but in those rural and regional areas. I pay specific attention to nurses. With our ageing population, there is more demand for nurses, especially in aged-care facilities, let alone in hospitals and local medical practices. This is a really serious problem. How do we keep things going without enough nurses? I am sure this chamber is going to hear a lot more about this issue before the legislation comes into the Senate and we can get to work on correcting it.

Don Farrell (SA, Australian Labor Party) Share this | Link to this | Hansard source

I think I heard Senator Williams mention some reference to regional South Australia. Obviously it has been some time since he has been into regional South Australia, because the people I talk to in regional South Australia tell me that what they were concerned about in relation to the previous government’s position on the youth allowance was that they were required to establish the issue of independence. That issue of independence generally was established because those students took a gap year. In other words, they artificially gave up their year after secondary school to go out and establish that issue of independence.

The key fact about Labor’s policy in this area is that there are something like 100,000 students who can now qualify for the youth allowance and who no longer have to establish that issue of independence. In other words, they do not have to go out and artificially try and establish that they are taking that gap year. Under the measure announced in the budget, young people can no longer prove that they are financially independent from their parents by working part-time or by earning $19,500 a year and then receive eligibility to the youth allowance after 18 months. Instead, they need to work at least 30 hours a week for 18 months out of 24 months since leaving school.

In an article in the Australian on 3 June, academic Professor Bruce Chapman states that the wide-ranging changes to student income support represent the most significant reforms to the system in 15 years. So here is Professor Chapman saying that the reforms made by this government, the Labor government, the government that does not fake emails, are the most significant reform in 15 years. His conclusion is:

The result is increased fairness in a system established to allow greater access to higher education for poorer students.

So that is what the system is all about; that is what Labor is all about. We heard Senator Carr talk about that in question time.

This is all about establishing a fairer system of youth allowance—removing the artificiality of the gap year system and establishing a fair system for young people to receive youth allowance. Professor Chapman went on to say that, under the old independence criteria, students could receive non-means tested income support after taking a gap year, even though being employed for an exceptionally high wage for a short period of time by a family member or a friend. That is all about the artificiality of the old system. We are putting an end to that artificiality. We are providing the youth allowance to 100,000 people who previously would not have qualified under that independence system.

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

That is just rubbish.

Don Farrell (SA, Australian Labor Party) Share this | Link to this | Hansard source

It is not rubbish at all. What is rubbish is your fake email. That is what is rubbish. What I am saying, Senator Nash, is that we have established a fair and honest system of youth allowance. That is what we have established and that is what we are doing.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

You’re not making your computers available, are you?

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! Senator Marshall, I think you should give your colleague at least a chance to make his case without interjecting across the chamber.

Don Farrell (SA, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy President. This is all about providing a fair system of youth allowance. We have removed that artificiality, particularly where people were able to be employed for a very short period of time for a high wage by, for example, a family member. (Time expired)

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

I rise to discuss the motion that the Senate take note of answers given by Senator Carr. What an extraordinary situation we saw today, with Senator Adams asking questions about changes to the youth allowance scheme and the effect on regional students, and the government side of this chamber simply not knowing where the question belonged. It was quite extraordinary. We had a very specific question here on regional students’ access to education, and the Leader of the Government in the Senate was jumping up and down saying, ‘We are really sorry; we do not know where this question has to go.’ They do not even know where this particular issue belongs on their side of this place. It is absolutely extraordinary.

Given the nature of this issue and how important it is to regional students and regional families, this just shows the complete disconnect that this Labor government has with regional communities. I am happy to inform the other side of this chamber that indeed Senator Carr was the appropriate minister to respond on behalf of the education minister, and I say that because he was also the appropriate person to deal with this matter in Senate estimates, which I think, Senator Adams, was only a couple of weeks ago. Our view was that Senator Carr was responsible for this particular youth allowance issue two weeks ago, and maybe things had not changed.

This is an incredibly serious issue. I do not think I have ever seen representation as overwhelming as this from a particular group as I am seeing now. In the four years I have been a senator and the about five years I worked on and off in this building before that, I have never seen such concern from rural and regional families over a particular issue. What did Senator Carr call it in Senate estimates? When he was asked about people automatically qualifying under the scheme and what would happen, he referred to it as political hysteria. I do not think that the concerns of rural and regional families out there demonstrate anything approximating political hysteria. These are very genuine concerns about a serious issue. Regardless of the protestations from the other side, this is seriously going to affect those students taking a gap year at the moment. I know those on the other side would say, ‘Well, it is just ill-informed families; once they realise what the changes actually mean they will understand they are just as well covered as they would have been under the previous system.’ That is complete rubbish. The parents of the students who are writing in to us know about the changes. They are very well aware of the changes and what they will mean to them. But they have realised that under this particular criteria they are going to fall outside the net.

These are students who finished school at the end of last year and who in good faith and on good advice chose to take a gap year to qualify for the youth allowance under the $19,500 earning limit criteria. They were told by Centrelink, they were told by teachers and they were told by advisers that they should use this criterion to make sure they qualified to get that assistance they so desperately need. What do we see the Rudd Labor government do? They move the goalposts in the middle of the game. No matter what the Labor contribution has been up to now, they know absolutely full well that the students caught in the net are now in an invidious position—because the goalposts have moved, because that start date is going to be 1 January, they can no longer qualify for youth allowance under this criterion. They simply cannot do it. These are rural and regional families who, as my good colleague from Western Australia, Senator Adams, would know, have been suffering unbelievably from drought and debt for years and years and years and they simply want to make sure that they give their children the best possible start and the best possible access to tertiary education that they can.

What do we see from the Rudd Labor government? An absolute complete disregard for those regional students who, in good faith, embarked upon a course of action to qualify for the youth allowance under this criterion—an absolute disregard. The Labor line is simply, ‘Well, that’s okay; under the other arrangements they will fall under those measures and they will be catered for just the same.’ It is simply rubbish—they will not. Those rates will taper off. The $370 a week that they would have got under the youth allowance program under the previous arrangements simply will not exist for all the students currently on their gap year. The government should take responsibility for this and at the very least, amongst the other changes that need to be made, make sure that those gap year students from regional areas and from the cities wanting to go out to the regions are not caught in the net and that they fix this problem.

Dana Wortley (SA, Australian Labor Party) Share this | Link to this | Hansard source

I welcome the opportunity to respond to this debate on the motion to take note of answers given by Senator Carr. In saying so, I would like to point out to the senators opposite that by delaying the implementation of this measure, over 100,000 Australian students will be worse off. The Bradley review found that current income support arrangements were poorly targeted, with not all support going to those most in need. I would encourage those senators opposite to have a look at the Bradley review and the findings of that review. The government’s response to the Bradley review of higher education will ensure that student income support payments are better targeted and that more assistance is provided to those students who need it most, including rural students.

For the senators opposite, let me point out a few things that they seem to have missed. The Bradley review found that 36 per cent of independent students living at home were from families with incomes above $100,000. It found also that 18 per cent of students in this situation came from families earning incomes above $150,000, and 10 per cent came from families earning incomes above $200,000. This government has accepted the recommendations of the review and has decided to take tough decisions to ensure that student income support is received by those who need it most.

The workforce participation criteria will be tightened and those savings will be invested in increasing access to income support for students who need it most by increasing the parental income test. This means more support for more students. More rural youth will qualify for student income support payments under changes to the age of independence. The package of student income support reforms will progressively lower the age of independence to 22 years by 2012 to ensure that the age of independence accurately reflects when individuals become more independent of their parents. It currently stands at 25 years of age.

We will also see changes to the parental income test which will reduce financial barriers for dependent rural students. About 68,000 extra dependent young people will gain access to youth allowance or Abstudy through a more generous parental income test threshold, and around 34,600 will receive a higher rate of payment as a result of the government’s changes to the parental income test.

We have already said the independence criteria will be tightened to better reflect actual circumstances, but rural students will be receiving additional income support. They will get additional help to this. Any university student who receives at least a part payment of youth allowance or Abstudy also receives a range of other assistance of particular benefit to rural young people and their families. There are other benefits attached to this, and I would like to highlight some of those. Rural students receiving youth allowance or Abstudy still have access to the higher away-from-home rate of payment as well as the remote area allowance, the fares allowance for up to two return trips home per year and other benefits such as the low-income healthcare card and the pharmaceutical allowance.

For rural students who are dependent on their parents, the family asset test applying to dependent youth allowance recipients takes account of current market values, net of business or farm related debt. This valuation disregards the principal family home and up to two hectares of surrounding land. The limit is currently set at $571,500 for most families and is indexed each year. Further, a 75 per cent discount is applied when assessing business assets, including farm assets. This means that youth allowance and Abstudy can be received by dependent young people from small business and farming families with assets up to the value of $2.286 million. Families in drought affected areas who are in possession of a drought relief exceptional circumstances certificate— (Time expired)

Judith Adams (WA, Liberal Party) Share this | Link to this | Hansard source

I rise to take notice of answers from Senator Carr, the Minister for Innovation, Industry, Science and Research and Minister representing the Minister for Education. This matter certainly has raised a number of issues and concerns today. I would like to inform those opposite that the youth allowance petition on the website of the member for O’Connor, the Hon. Wilson Tuckey, has reached 9,500 petitioners. This has blown the whole thing out of the water and, as my colleagues on this side have said today, this is one of the biggest issues for students living in rural and remote areas who wish to go to university. The Isolated Children’s Parents Association came to visit me the other day and their biggest concern was about how the changes to the youth allowance and the gap year are affecting their members.

As people who have lived and worked in rural and regional Australia, my husband and I put our two sons through university. At that stage, of course, there was nothing like a youth allowance to give us some assistance. I myself worked on the farm instead of working at the local hospital to put my sons through university, so I fully know how hard it is for people living in rural and remote Australia to educate their children, and there is nothing better for us to do than to give our children a good education so that they can then move on in the world. Without an education these days, it is very difficult.

As far as the petition is concerned, an enormous number of people have either rung or emailed my office, and I know that the member for Forrest, Ms Nola Marino MP, has certainly been inundated, as has the member for O’Connor. We live in very rural areas and really understand the way people have to work. With respect to the gap year, as my colleagues have said, students have their gap year so that they can be out there working to acquire the money they need so that they can be considered independent, because they have to move away from their homes to go to the cities to study. They have been put in a dreadful situation. I really did try to get the minister to say that the government would perhaps look at the situation, but obviously that is not to be. The minister made a comment about people being very rich. Because of the noise I could not hear exactly what he had to say, but I am amazed that he was so confused about the issue. I sat in Senate estimates and listened to Senator Carr talking about the $2.28 million, and he asked, ‘Is this too low as an assets threshold?’ The next thing he said was:

I just want to be clear about this. Are you trying to suggest that a family income—

He was then brought back by Senator Back, who said:

Chairman, with respect, it is not $2.268 million of annual income.

It is assets. I would just like to put this on the record. A farm—with the plant and machinery needed to put a crop in, if you are a cropping farmer—is usually worth over $1 million. Then there is the land and the stock that go with it. To people who live in the city, $2.28 million as an assets threshold might seem very, very generous. But I can assure you that for most farmers it is not. When you take the plant and equipment and land into account, they are asset rich on paper, maybe, but they certainly are cash poor. Students living in rural areas will have to try to acquire work at 30 hours a week when, most of the time now, they can work during seeding and harvest and earn the money they need. But from January next year, students will have to work 30 hours per week for 18 months in a two-year period after leaving school so that they can get the independent rate. As Senator Nash has said, as far as deferring a university place goes, universities will not defer for two years. (Time expired)