Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

The Social Services and Other Legislation Amendment Bill 2013 is cause for a great deal of concern for the Greens because of the many provisions it contains. Therefore, while I cannot say that we will be opposing all of it, we will be opposing most of the schedules. However, there are a few that we could support, and that of course will need to be dealt with in the Committee of the Whole.

The issues contained within this bill are significant and have significant implications for students, pensioners, low-income families and the not-for-profit sector. The bill seeks to undermine at least two major pieces of reform from the previous parliament, by repealing the reforms in the National Gambling Reform Act 2012 and delaying the implementation of the long debated and consulted-over Charities Act 2013. It is completely inappropriate to seek to pass so many different and complex issues through what is really one omnibus bill, particularly as there has been totally inadequate time to consider these major amendments, and we will be moving to make sure that we can vote on each of these schedules separately. I also want to point out how disappointing it is for stakeholders to have less than a week to contribute to the Senate inquiry, particularly given that most of these measures are not time sensitive and are extremely important amendments because they have ramifications. It is particularly important that they be looked into.

There are some aspects of this bill that we can support: namely, schedule 8, parts of schedule 9—I say 'parts' because we do not support the changes to the indexation of the childcare rebate, and my colleague Senator Hanson-Young will be talking about that particular issue—schedule 10, schedule 11 and schedule 12. I have already circulated in the chamber amendments to schedule 9, separating out the indexation of the childcare rebate from the family tax benefits provisions.

However, there are significantly more aspects of this bill that we do not support, particularly the university cuts, the gambling repeals, the freeze on the childcare rebate, the delay of the implementation of the Charities Act, the changes to the family tax benefit rules, extension of income management and the changes to pension portability. As you can see, this wide range of issues significantly impacts across a range of portfolio areas. There are four of us in the Greens who are dealing with these issues, and I know it is the same for other parties. The extent of our concerns can be found in the fact that there have been contributions to three separate committee inquiries because the range of these provisions crossed so many areas that they had to be subject to three Senate committee inquiries. I will leave it to my colleagues to raise the issues specifically related to the areas of gambling, the childcare rebate and the university cuts, and I wish to speak particularly about charities, family tax benefit and income management.

When it comes to the issues around charities, the Greens strongly oppose the government amendment that delays the implementation of the Charities Act for nine months. The definition contained within the Charities Act does not introduce any significantly new concepts; rather it codifies and consolidates the growing body of charity case law into a single act, which provides greater clarity and certainty to charities. As a result, it clarifies that working on activities such as housing and Indigenous issues can form a charitable purpose. It also enshrines in legislation the freedom to advocate and makes explicit that advocacy is a legitimate charitable purpose, provided that advocacy is not in aid of a specific candidate or political party. This directly reflects existing case law, particularly the AID/WATCH case and the subsequent tax ruling TR 2011/4, in a way that reduces ambiguity for charities in understanding how advocacy may fit within their charitable purpose. Refining the definition of a charity has been on the political agenda for over 10 years, and the passage of the legislation earlier this year was overwhelmingly welcomed and accepted by the charity and not-for-profit sector.

The charities who spoke to the committee inquiry into this bill were caught completely unawares by the government's intention to postpone the implementation of this bill. Slipping this amendment into this huge omnibus bill at the eleventh hour is completely inappropriate. None of the submitters to the inquiry could point to a clear reason why the government would defer the implementation of this act. Given that one of the stated aims of the government is to reduce red tape on the charities sector, delaying the implementation of the Charities Act is completely contrary to that goal. Submitters pointed to the significant legal costs that charities face in trying to understand the charities case law. The Charities Act will reduce red tape and uncertainty in the sector, something the government claims to want.

The government would not treat business like this, so why has it shown such complete disregard to our charity sector, which is one of the biggest employers in Australia? As I said in this place the other day, if this were business, this would be on the front page of the Australian. The Australian Greens would be extremely concerned if the purpose of further consultation is to try and wind back the advocacy component of these bills. Undermining the role of advocacy will only put more pressure on charities who speak out about public policy. One of the biggest risks that charities face is the winding back of the DGR status for failing to operate within their stated charitable purpose. There were several attempts during the Howard government to undermine organisations such as the Wilderness Society by challenging their DGR status. If it is the goal to dismantle the legislative protection for advocacy, this is extremely disappointing and we will oppose it at every turn.

I turn briefly to income management. The application of income management in Cape York, which relates to schedule 2 of this bill, is quite widespread. While income management is meant to be applied as a measure of last resort, 25 per cent of those living in the welfare trial sites had been subjected to it by December 2011. Although an income management order is meant to exist for between three and 12 months, the average time for the basics card is 16.8 months. Clearly, income management orders are applied frequently and often extend beyond their original time period. While the Australian government argues that income management has been instrumental in improving school attendance, care and protection of children and community safety, there has not yet been any objective analysis of income management in Cape York to show that it has delivered on these outcomes. The continued application of a highly coercive program such as income management needs to be justified before the Australian Greens can support extending it in any guise. The report commissioned by the Australian government is unable to demonstrate conclusively that income management in Cape York has met its stated aims. On the weight of the evidence the Australian Greens believe that income management is a failed and expensive policy that the government is persisting with in the absence of any real justification. There are a number of other programs which are not coercive in nature, such as Centrepay, that can be used to help people manage their money better.

The Australian Greens support direct investment in programs in communities that address the underlying causes of the disadvantage rather than income management, which is expensive to implement and punitive. The money being spent on income management around Australia would be better invested directly into communities in order to provide specialist, direct programs to address things like financial management, education, better access to fresh food, a reduction in alcohol and drug abuse and better support for parents and people looking for work. Although people point out that the Cape York income management is different to other schemes, it is still punitive in approach and has not comprehensively demonstrated that it does increase the measures that the government claims it does and there is very little evidence to show the measures used there are more successful than measures used elsewhere.

I want to talk briefly about family tax benefit eligibility, which is another schedule in the bill. Raising teenagers is an expensive exercise—and anybody who is raising teenagers will know that—for low- to middle-income families in particular. Access to government support programs does play a significant part in the budgets of low- and middle-income families. However, the proposed changes to the family tax benefit eligibility will mean that some families lose access to this payment. There is clearly a cohort of families who will be affected by this measure, as demonstrated by the predicted savings outlined in the explanatory memorandum. This measure effectively acts as a penalty for 16- to 17-year-old children not enrolled at school or university or in the workforce. The Australian Greens believe using the threat of reduced family payments to motivate families to keep their children in education is counterproductive. It detracts from the purpose of family payments to ease poverty among children; it has not been demonstrated that making family tax benefits contingent on school enrolment has a positive impact on school attendance or transition to other forms of activity, particularly for that cohort of young people. Again, I will point out that, if you are a parent of teenagers, you will know how difficult it can be to convince them of a particular course of action. Rather it has been demonstrated through the application of other programs such as SEAM and welfare quarantining that the pressure on families that results from reduced payments can in fact act as a source of further dysfunction and negatively impact on family relationships. A more progressive and reasonable method would be to allow family tax benefits to continue until the child turns 18 or completes their final secondary year and becomes eligible for youth allowance.

In conclusion, this bill is a grab bag of social policy measures, few of which we can support but most of which we believe are deeply unacceptable. Government has combined these measures in order to ram through appalling changes, and we will not help facilitate this. We will not accept all of the measures just so that a few of those we accept will be passed. It has not given an appropriate amount of time for debate or consideration of these measures that have profound effects on many people in our community. Potentially, this bill affects millions of Australians. Although there are 12 measures listed, there are actually 13 because of the charities provision that was snuck in at the last minute as schedule 1A. There are 13 different measures here and some of the schedules have multiple effects, such as schedule 9, which contains the freezing of the indexation of both the childcare rebate and the family tax benefits. This, we believe, is symptomatic of the way the government holds in contempt, although it professes not to, the not-for-profit sector, social services and low-income families.

As I indicated, the Greens will be circulating amendments to this bill—I have already done so. We will be seeking to have the schedules dealt with separately in the Committee of the Whole so that we can express the will of the Senate on each of those particular schedules. We believe that there are some schedules that we can support, but we cannot support the vast majority of them. Therefore, we will be moving to allow a vote on each of the schedules separately.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

I had hoped to simply talk about the government's findings during the inquiries that we had on these bills, but I think there are perhaps a few misconceptions that I should first counter. Out of the 13 schedules for this bill, 10 were referred to the Community Affairs Legislation Committee. The other three, which were around education and legal matters, were referred to other committees which had the expertise to deal with those particular issues. I do not see what is so terrible, as Senator Siewert would have us believe, in referring matters to the committees that have the expertise to deal with them.

If you look at the complaints made by both the Greens and Labor about the time spent on these inquiries, you find that the schedules split into two types of matters. Some of them are matters that were proposed by the former Labor government. In their dying days, they discovered economy and found some ways to look for savings. But for their problems with who the Prime Minister was on a day-to-day basis, many of these provisions would already be passed into law. The previous government were unable to get a legislative table, schedule or program happening in a coherent way because they were so poorly organised at the time. That means that a significant number of these matters are coming to us now.

The other matters all fall into the category of election promises made by this government. So it is scarcely true to say that no-one had heard about these ideas until a few days ago. Every matter here was canvassed by the now government during the election campaign, and I look at things like the move to take the impost off employers of having to pay parental leave to employees who are on leave. Despite the best efforts of the Labor government to force that onto employers, there is no coherent reason why that should be the case.

Looking through the amendments, which we were told by the Greens were not urgent, is interesting. If you look at the 13 schedules of the bill, three of them are due to start on 1 January 2014. One of them is due to start the minute schedule 5 starts on 1 January 2014. So four of them are due to start on 1 January 2014. If they are interested in orderly government, I would have thought we would require a certain amount of timeliness in the passing of legislation by this house. Three of the measures are due to start on 1 March 2014. Again, it would seem quite sensible for those measures, all of which have been discussed in some depth in various forums within the parliament, to be passed as soon as possible. There is no reason why any of these bills cannot be put through today.

We certainly hear the objections of people such as Senator Xenophon, who has been a great champion in the area of gambling reform, but we would make the point that there is nothing in the schedule that we have developed that (a) was not something we took to the last election or (b) raises a need for concern. We are simply giving the states and territories the jobs that the states and territories should always have. Labor governments may try to develop a centralised nanny state, but that is no reason why we should follow them.

I want to speak briefly so that we have a chance to get to a vote, hopefully, on this legislation, but I will just single out, for example, the opposition of both the Greens and the Labor Party to the development and imposition of an interest charge on students who owe money to Centrelink for loans. These are not people who just automatically owe the money. This is an interest charge for people who refuse to enter into a repayment scheme with Centrelink. If you look at the quantum of this, according to Department of Social Services officials during the inquiry that we held, there would be $72 million covered by this particular measure. There are 33,000 debts owed by 22,000 people. So some of these people are in fact repeat offenders in this area.

We were advised by the department that all students are told about the status of the loans they have and what to do about the repayment of them once they are in work and leave whatever studies they were undertaking. So there is no reason for students not to know that they owe taxpayer money back to the government. We are talking about people who are asked to start paying this back when they have a job. If they agree to enter into a repayment scheme with Centrelink, they are not charged interest. The interest charge only applies when people refuse to engage in paying back money that we loaned them so that they could do their studies and get a job. It is not unreasonable to expect that people will pay that money back. But, of course we have the Greens position and the Labor position whereby they want to offer all the carrots and never, ever suggest that there would be a stick because—goodness!—that might lead to some savings. And the Treasury has suggested that we would save over $33½ million over three years just by introducing that one measure.

There are many small measures covered in this bill that would lead to significant savings immediately for the government. Some of them were even savings that the Labor Party, in its dying days as a government, discovered would lead to savings and were going to introduce themselves if they had got their act together. That did not happen. But there is no way that anyone can claim that any of the measures in this bill have not been well rehearsed and well discussed. There were over six hours of hearings held into any aspect of this bill that the Greens and the opposition wanted to look at, and given, as everybody has said, that almost every area in this bill has been dealt with significantly in previous inquiries, hearings and consultations there is absolutely no reason why this bill should not be passed today.

Ursula Stephens (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I too rise to speak on the Social Services and Other Legislation Amendment Bill 2013, and I am pleased to have the opportunity to do this and to reflect on the range of provisions that are in this bill. It includes everything from gambling reform and income management in Cape York to changes to our social security system. It is what we call an 'omnibus bill', with a range of different measures in it, and they need to be considered measure by measure.

The first measure relates to gambling reform, and we have had many, many debates here in this chamber about the important and serious issue of problem gambling in this country. For too many Australians, gambling can be incredibly destructive. From our previous inquiries we know that it affects around five million Australians, including friends, families and employers of people with a gambling problem. So the social cost of problem gambling in this country is estimated to be around $5 billion, and that social cost comes in addition to the almost $19 billion which is lost annually by gamblers around Australia. Those figures come from 2008 and 2009, so it could actually be even more by now. That is a huge burden for Australian families, and the Productivity Commission identified in its 2010 report:

The significant social cost of problem gambling … means that even policy measures with modest efficacy in reducing harm will often be worthwhile.

In 2012 Labor introduced measures to help protect people whose problem gambling was hurting them and their loved ones. They were meaningful reforms aimed at tackling problem gambling. The bill before us removes all of the measures contained within the National Gambling Reform Act that would help problem gamblers. Despite this, Labor continues to support meaningful measures to tackle problem gambling in our communities. As a party we will need to revisit this issue to determine the best way forward, together with stakeholders across the community, and we have revisited the issue. That is certainly what we intend to do, and what the shadow minister has foreshadowed she will be doing.

The legislation also extends income management in Cape York. We have always been strong supporters of Cape York welfare reform trials, and I have had the opportunity to go and witness some of them in practice. After coming to government in 2007 we committed more than $100 million towards those trials, including the $24½ million in this year's budget. We have always been strong advocates for the work being done in the cape, and I am particularly proud of our government's work in that regard. In 2012 there was actually an evaluation of the Cape York welfare reforms, which made very interesting reading. It found that there had been significant and measurable gains in school attendance, parental responsibility and restoring local authority in leadership. It was a very empowering process, because the people in Cape York are working with local, state and federal governments and local organisations to drive genuine change across the cape.

The Family Responsibilities Commission, which is part of the Cape York suite of measures, has been at the centre of the welfare reform process, and its objectives are to rebuild Indigenous authority and to restore social norms by reforming incentives to support socially responsible standards of behaviour at the individual, family and community levels. In the first three years of those trials, half the population in the four Cape York welfare reform communities had direct contact with the Family Responsibilities Commission. So it has become a very significant part of each of those communities, and now a majority of people in Cape York support its role in their towns. That progress is very pleasing.

It is also important to note that the lessons that community and government have learnt from those reforms that have taken place in Cape York are being shared with other communities across the nation, communities that want to take the lessons and the progress that has been made in the cape and adapt them to their own circumstances—communities such as Groote Eylandt and Halls Creek. And this year a delegation from the NPY Women's Council also visited Cape York to see the measures and how they might assist them in the Central Desert. So we are seeing that there is Indigenous ownership of this kind of welfare reform, and that is translating very much into community action in those communities.

The bill also makes a number of changes to our social security system. Senator Siewert has been through most of those in terms of the evidence that was provided to the committee last week, so I will not go through those. There are changes made to the rules of Australian working life residence. Australian working life residence rules operate to determine how much of the age pension a pensioner can receive if they travel overseas for more than 26 weeks. So, if a pensioner spends less than the specified Australian working life residence period in Australia before going overseas, they receive only part of the pension and are still subject to means-testing. The reform reflects the principle of shared responsibility, that the retirement costs of a person should be shared fairly between the countries where a person has lived or worked during their working life. In such cases there is also an expectation that a person, through periods of time living or working in another country, will be eligible to receive a pension from that country. So Labor is definitely supporting that measure.

The legislation also makes changes to the Pension Bonus Scheme. In 2009 the Labor government's pension review found the Pension Bonus Scheme did not encourage older Australians to remain in work. The review also found that pensioners thought the scheme to be too complex and inflexible. So back in 2009 the Labor government closed the Pension Bonus Scheme and replaced it with a more targeted and effective seniors work bonus to encourage older people to continue working. Thousands of age pensioners who are working part time or in sessional jobs are better off now because of Labor's work bonus for pensioners. Many senior Australians choose to undertake seasonal work, so Labor's work bonus has enabled many age pensioners to keep more of their fortnightly pension when they work in this way. The work bonus allows age pensioners to earn up to $250 a fortnight from employment without it being considered income under the pension test. This is on top of the income-free area. When we closed the Pension Bonus Scheme, however, we left it open for people who qualified for the Pension Bonus Scheme before 20 September 2009 but who had not registered by that date. These people were able to backdate their registration if they had been working since then and had not received the age pension. This legislation brings to a close late registration for the Pension Bonus Scheme. From 1 March 2014 people will no longer be able to register for the Pension Bonus Scheme. Eligible people can still register for the scheme before that date. Again, that is a sensible proposal and we support it.

I turn now to the measure in the legislation which extends indexation clauses on higher income thresholds for family payments and family supplements. Labor believes in a strong family payment system that reflects the needs of modern Australian families. When we were in government we made responsible decisions over a number of budgets to better target family payments. We did this by targeting assistance to low- and middle-income families who need the most support. In the 2009-10 budget we announced a number of indexation pauses on higher income thresholds. We believe that to be a very sensible reform to limit the growth in family payments at the top end and make them sustainable for the future. Today in this bill the government is seeking to extend those pauses on higher income thresholds and we support the measure.

The legislation also makes changes to the rules for receiving payments overseas and enables changes to limit the amount of time that people can be overseas and retain access to Australian payments. Currently, families living overseas can continue to receive family and parenting payments for up to three years. This legislation amends that to a maximum of 56 weeks, and Labor supports that measure. The legislation also extends deeming rules to account based income streams. This was a measure proposed by Labor in April this year and we will support it again today.

The government has several other amendments and measures in this bill, some of which Senator Siewert has spoken very passionately about. The first of these is the proposal to charge interest on certain welfare debts. While Senator Boyce was a bit sceptical about why that would be stressful, the students already on income support who would be caught by this measure are receiving Austudy, youth allowance and Abstudy and are already doing it tough trying to meet the costs of their education. We see this as a very mean-spirited reform and we will oppose it. People on welfare benefits are already pretty vulnerable and they do not need further punishment. We believe they need support. We have heard the government's arguments about that.

Another measure in the legislation is the extension of the freeze on indexation of the upper limit of $7,500 on the annual childcare rebate. Labor will oppose this measure as well. We have been strong supporters of increased support for Australian families struggling to meet the costs of child care. When we were in government we increased the childcare rebate from 30 per cent to 50 per cent and we increased the annual cap from $4,354 to the current limit of $7,500. While we proposed the savings measures that are in this legislation, the fact is that the savings were to go directly to support the $300 million Early Years Quality Fund. As the government have put a freeze on this fund, they are left with no justification for pursuing $100 million in cuts by freezing indexation to the upper limit of the childcare rebate, so we are not supporting that change.

The Paid Parental Leave scheme change proposed in the legislation, seeking to remove the role of employers in administering paid parental leave and giving that function entirely to Centrelink, is one we have great concerns about. Since its introduction the scheme has been administered in part by employers. When we designed the Paid Parental Leave scheme the employer role was included in order to help employers retain their skilled staff. It was also a way of enabling people, especially women, to remain connected to work and their careers while they were taking time out of the workforce to have a baby or to adopt a child. But, as the scheme progressed, we listened to business and understood that in tough economic environments small businesses needed to be able to devote their scarce time to adapting and thriving in a changing economy. That is why, for the 2013 election campaign, we adopted a position of allowing businesses with fewer than 20 employees to streamline administration and to have Centrelink make the payments to employees on parental leave. We believed that to be a very sensible balance between the need for employees on parental leave to maintain a relationship with their employer and the need to give small business the option of having their paid parental leave administered by Centrelink. This legislation today takes it a step further, completely abolishing the role of the employer in administering paid parental leave. Our view is that that does not strike the right balance.

Another of the measures before us today that I have not mentioned yet is the eleventh-hour inclusion of the postponement of the implementation of the Charities Act 2013 from 1 January to 1 September 2014. This is quite an extraordinary move by the government, taken at the eleventh hour, as I said, and with no explanation except to say that it would allow the government time to consult charities law experts on winding back the ACNC and the possible establishment of a national register.

As I said the other night when I was speaking about this, this is a nonsense. This has been going on since the Howard government introduced the Charities Bill after the inquiry in 2001. We have had nearly 20 years of debate, starting with the Industry Commission in the nineties, about how charities should be governed in Australia, how we can strengthen transparency and governance standards and how we can actually build community trust and confidence in our charitable sector, which is now one of the largest employment sectors in Australia.

But this government, in trying to slip this one in at five minutes to midnight, is creating some very serious unintended consequences in this amendment bill, the first of which is to do away with the four particular definitions of charity that were included that are not in the common-law definition. This has been thrashed out across the world and across Australia and New Zealand for the last 10 years. The definition that was finally achieved in the Charities Bill is one that has come from Australia's best charity law experts, following a very significant charity laws conference that was held in Queensland in 2010.

The consequence of not including the Charities Act to enable it to begin on 1 January is very important. The first consequence is that, if there is a natural disaster such as the bushfires or floods that we have seen over several summers, we are creating exactly the same problem that we tried to address after the Victorian bushfires, because of those community organisations that lost community assets but did not have any kind of deductible gift recipient or tax status. They are small community organisations with assets, and there is no legal capacity to provide money to them from philanthropic funds, whether they be public philanthropic funds, funds raised by a national campaign or private philanthropic bodies. Philanthropic bodies, under the law, cannot give to an organisation that is not registered with the ATO and the ACNC for DGR status. That is the first problem.

The second problem that we had to deal with was the issue of Indigenous organisations which are based around family groups and which would not be perceived, under the current legislation, as being wholly of public benefit. That is a reality in many remote communities in Australia, where a large family and clan based organisation does not meet the requirements under the current arrangements for deductible gift recipient status. We need to fix that. There are many organisations trying to work with those communities who cannot actually engage and get their own tax-deductible considerations correct because of this anomaly.

The third is the issue of advocacy, and we have canvassed this—the notion that promoting a change in government policy, advocating for government policy change, is a legitimate role for not-for-profit organisations seeking DGR status. Political activism is excluded from the definition, but there are organisations such as environmental organisations, preventive health organisations and arts based organisations which are looking to advocate for change in government policy. That is a charitable purpose under the Charities Act. We will eliminate that right again in this bill.

We on this side of the chamber have deep reservations about many of the measures that are very unrelated that have been cobbled together into this omnibus bill and introduced here in these last days of the parliament. We believe that there is a much more sensible way to go about this, but we know this is very ideologically driven. This is part and parcel of laying the way for the Commission of Audit findings. We are going to see a massive number of cuts across the board for portfolios which are all going to be dealing with the issues and the fallout of these kinds of measures. The government is pushing this through. The opposition are not supporting all of the considerations that are in these measures, and we will be voting accordingly.

Lee Rhiannon (NSW, Australian Greens) Share this | Link to this | Hansard source

I support the comments of my colleague Senator Rachel Siewert in the way that she outlined both the serious problems with what the Social Services and Other Legislation Amendment Bill 2013 intends to do if it is passed and also the process by which it has been brought forward here. I want to particularly address the issue of start-up scholarships and what the government plans to do with those. Converting these scholarships to loans for university students is just one aspect of this bill that, if adopted, would really result in inflicting hardship on many disadvantaged people. It would increase student debt by about $1.2 billion over the forward estimates.

We already know that student debt has risen by about 30 per cent over the past six years. We already have a problem here, and the government would further compound it. Part of the plan of the federal government to push higher education costs onto individual students really needs to be named for what it is. It is a way of government cutting costs and piling hardship onto people who have a right to go to university and who can contribute enormously to our society, but we know that many of them will be turned off when they start thinking about the debt that they could well incur.

This idea of converting student start-up scholarships to loans was originally a Labor plan. We remember back in April—it was a Saturday—when the former minister, Dr Emerson, brought forward a plan to cut $2.3 billion from the higher education budget, and $1.2 billion of that $2.3 billion was to come from these start-up scholarships being converted to loans. It is good news that Labor has dropped that damaging policy. For achieving that, I pay tribute to the strong community campaign, which has been strongly backed by the Greens, the National Tertiary Education Union and the National Union of Students, and many other organisations have been very vocal and active and have certainly helped bring some change. It is change that we need to continue working for, to ensure that this bad policy does not end up in law.

The clear message here is that we should be working to decrease student debt, not increase student debt. When I have been engaging with people who work in the sector, various university academics and also management, they have shared many worrying stories about what this can mean for students and what is already happening. Again, I have to say at this point how disappointing it was that the inquiry into this aspect of the bill was so rushed. But there was some useful information that I wanted to share with senators because it helps highlight the level of hardship that will result if we go down this track.

There was a report out in July by Universities Australia on students living in poverty and struggling to cope with increasing debt—again, something that signals the real problems that we should have with this legislation. If this $1.2 billion is effectively cut from the higher education budget, it will impact on about 80,000 new students from next year. The policy will drive up student debt even further, particularly—and this is certainly the theme of what I am talking about today—putting more and more of the burden on those who are disadvantaged. The report from Universities Australia estimates full-time students will graduate university with an estimated debt of more than $37,000. The government's damaging cuts will increase that debt by an average of $8,200 or 22 per cent for every student on youth allowance.

For the Greens, this is very troubling. It really is going in the wrong direction to again put this burden on students. In some of the stories I have been told I have heard about students missing classes because they are worried about where they are going to get their income and are looking for second jobs. There are even stories about sometimes going without food or adequate accommodation, which we know clearly impacts on their ability to study.

This is something that the Greens have looked at within specific areas across the country. In the work that I did with my colleague Adam Bandt, the member for Melbourne in the House of Representatives, we identified that in his electorate these cuts will affect an estimated 3,500 students enrolling in the University of Melbourne next year. It is projected that the debt increase in that seat alone will be almost $30 million over the next four years. Again, we have to look at the national figure of $1.2 billion down to specific areas like Melbourne with $30 million over the next four years and then consider what that means for students hoping to start their careers. There has also been some useful and timely information from the National Tertiary Education Union that is worth considering in the context of this debate.

It is worth pausing at this point and putting this in the context of the government's own policy on higher education. They do give great emphasis to accessibility and equity when you dig down into some of the documents. But what we have here in how this policy has been put forward is a real failure to address the affordability of university. That has largely been ignored. If people cannot afford to go to university then that accessibility and equity that so many people in public life pay lip-service to when they come to speak about higher education is not a reality. But we need to ensure that it is a reality.

As I said before, the cost of education and student debt has been increasing, and the government subscribes to the view that students are not averse to debt and that it is not going to impact on their decisions about their higher education pathways. This is something that I heard many times when Labor were in office and now we hear it from the coalition. There is increasing research that is showing that that generalisation about the impact on students is really quite misleading. There have been some very useful studies done in this area. One that I would like to refer to was undertaken in 2003 by Dr Kerry Carrington and Angela Pratt into high school students' assessment of the impact of the cost of a university education. Some of these figures I found very alarming, particularly because of the views of young women. The report found that 41 per cent of lower socioeconomic-status females reported that they believed cost may make university impossible for them. Interestingly, the young men in this study who believed that came in at 34 per cent, compared with the 41 per cent I mentioned of young women. Similarly, 43 per cent of females surveyed from lower socioeconomic backgrounds believed their families could not afford the cost of supporting them through university.

Again, these decisions are very significant and this can really turn young people away at that critical stage of making that all-important decision about going to university. Remember, the people we are talking about here, these young men and women, in the main are from families where nobody has been to university. It is the first time anybody in their family has made that step. It is a big one. They need to be confident that they are not going to incur massive debt. Many people from disadvantaged backgrounds and working class backgrounds do not want to start off life with debt, and these studies are reiterating that. The study concluded that women from lower socioeconomic backgrounds are more sensitive to the cost factors of education and consequently more debt averse than their male counterparts.

This doubt over the whole notion that students are not influenced by the cost of education has been taken up more widely. I want to make reference to another report, because I think we need to put to bed this notion that loading up students with a lot of debt really does not matter. This was research commissioned by the department of education in relation to the federal government's base funding review. This study was called The impact of changes to student contribution levels and repayment thresholds on the demand for higher education. It came out in 2012. The report forecast a reduction in higher education student demand—that is, the number of students—should government policy result in an increase of HECS debt. So there is very clear and very solid research that has been done in this area. The government may wish to claim that the proposed changes to student start-up scholarships will not impact on existing scholarships, that they will not determine their decisions about their future education, but there is more and more evidence that that position is really very deceptive.

It is worth looking again at examples of the different ways in which the HECS-HELP debt is playing out. A student eligible for income support enrolling in a five-year law degree commencing in 2014 who is not in a position to pay his or her HECS up-front will incur a HECS-HELP debt of about $50,000 in tuition fees. Should that young student also elect to take up a student start-up loan for the whole five years of their study they will incur additional debts of approximately $10,000 to their HECS-HELP debt. That means that this student, starting off on a law degree, obviously with great hopes of what their career could hold for them, would graduate with a debt of more than $60,000—in 2013 values—which is 20 per cent higher than the debt of a student who does not take up a start-up loan. This is clearly going to be a deterrent. It is very destructive both because it loads up students with debt and because of the fact that it can deter young people from even choosing to go down the path of obtaining a higher education degree

The provisions of this bill directly target students from disadvantaged backgrounds. We have clearly established that. The only students eligible to convert student start-up scholarships to loans are those eligible for some form of student income support in the form of youth allowance, Austudy or Abstudy. It is worth remembering that Austudy and Abstudy debts are targeted by the provision of the bill that allows for interest to be charged on these debts. So we see again that it is focusing on the most vulnerable cohort of students. That particularly means Indigenous students. That is a huge group of students who will be hit with this increased debt. We do not know how it will play out, but from the research from 2003 and 2012 that I quoted earlier you have to think that Indigenous students would form a large part of those young people who may be deterred from deciding to take on higher education.

The National Tertiary Education Union has concerns about the level of Higher Education Loan Program—this is what is often called HELP. Some students accrue HELP debts in obtaining a university degree. According to the latest budget forecasts, the number of students with a HECS-HELP debt will rise from 448,800 in 2012 to 555,300 in 2016-17. That is an increase of more than 106,000 students, or about 24 per cent. Over the same period, the average level of HECS-HELP debt per student is forecast to increase from $16,000 to $19,500, which is a 21 per cent increase over four years. That burden is being put on the people who are already doing it tough, people who have probably set out on their higher education course with not many people around them who have done similar study. Their brothers and sisters may not have set out on that; their parents may not have gone down that path; and they have taken a big step or they are thinking about taking the big step. Then they start doing the figures, and that is what they come up with.

The latest published data shows that Australian university students currently owe in excess of $26 billion in outstanding HELP debts. The NTEU estimates that the total level of outstanding debt is growing at a rate of some $500,000 per hour and will exceed $50 billion by 2016-17. That becomes very relevant for the Commission of Audit, which we know the government is using to push a very clear agenda. The government estimates that the total value of start-up scholarships will be $342 million over four years. It is interesting to see the referral of the securitising of the level of outstanding HECS debt to the Commission of Audit. It clearly highlights the importance of this level of outstanding debt, that it is a serious policy issue for all of us. The government apparently wants to look at it, but at the same time is ready to increase it mightily. The magnitude of this debt needs to be seen in the light of Commonwealth debt, which is in the order of $175 billion. So Commonwealth government debt is coming in at $175 billion and the government estimates that the total value of start-up loans will be about $342 million over the next four years. That is a very significant part of what we are seeing.

The introduction of this bill, as I have set out, will have a considerable impact on students, particularly those who are most disadvantaged. That is the key takeaway message from that aspect of this legislation. It really is going in the wrong direction. We should have had a new federal government that had the courage to put in place the clear recommendations from the two major reviews that the Labor government initiated—the Bradley review and the Lomax-Smith review—which identified that we needed a very clear increase in base funding. When the Bradley review first came down it identified that there needed to be a 10 per cent increase in base funding and that if that did not occur immediately standards would drop.

We are many years down the track. We have had a further Lowmax-Smith review making very similar recommendations. You can see from the government that they have no intention of following through on those clear recommendations. I acknowledge they were not inquiries by this government, but their recommendations are certainly highly respected and have been welcomed by the sector. They give clear advice on what a wise government, committed to ensuring that Australia is an innovative and well-educated nation as we move further into the 21st century, would do. This can only be achieved by having well-funded universities, where staff are able to take forward the very extensive work that they need to do in research and teaching. That injection of funding was absolutely critical. What we are seeing from the government is that they want to take us down the path of pushing more financial burden onto students rather than doing the right thing and ensuring that the government pay for it.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I rise to speak on the Social Services and Other Legislation Amendment Bill 2013. As we already know, this is a cobbled-together bill of various issues and various amendments to different acts. It is effectively 'the bill of bad surprises' for the Australian people.

There are really not very many good things in this bill. Of course, it is no surprise that the federal government has put them all in together, whether it is backflipping on gambling reform, ripping money away from students or, indeed, ripping money out of the pockets of parents with a freeze on the childcare rebate indexation. And it is being done in a way that does not give much time, much information or much notice to the Australian people that the federal government wants to act so recklessly on issues that impact directly on people's lives. It is only two weeks before Christmas and I assume that the federal government believes that people have clocked off and that no-one is really paying any attention to what is going on in this place today. It is all very unfortunate, because the money that will be ripped out of parents' pockets because of this piece of legislation is significant.

I want to talk specifically in relation to the freezing of the indexation on the childcare rebate. This effectively means less money going back to parents once they have paid their childcare fees. Most families will be really shocked and surprised that the coalition, who had previously not supported a freeze on the childcare rebate indexation is are now legislating for it and in a way that is sneaky; it is being done in a way that is trying to avoid scrutiny. The government would like this all done today, ticked off—and we can all go home. It is a case of: 'Oh well, those poor parents will find out sooner or later that they are not getting the rebate for their childcare fees.'

On a conservative estimate, the number of families which the freezing of the indexation would impact on is 150,000 across the country. That is a lot of families. That is a lot of the childcare hours. The government went to the election saying that they were concerned about the cost of child care, that they were interested in listening to the views and concerns of parents in relation to the cost of affordable and quality child care, yet here we are, five minutes to midnight, and the coalition is introducing legislation that they are trying to ram through the parliament that takes money away from families and makes child care more expensive.

The Greens will not be supporting this move. We will move amendments to this legislation to remove the freezing of the indexation, because it is wrong. Not only is it wrong because no-one had been told that the government wanted to do this; it is wrong because we know that childcare costs have increased by an average of seven per cent over the last couple of years and the freezing of the indexation of the childcare rebate will take the rebate back to the level it was in the 2008-09 financial year. It beggars belief that the coalition are happy to rip thousands of dollars out of the pockets of families in order to get this legislation through. It is all because the coalition have no means of revenue raising. They have a huge black hole. They are spending $11 billion on locking up children in Nauru, yet here in Australia they are telling parents that they are about to take thousands of dollars out of their pockets by freezing the indexation on the childcare rebate. What gall the coalition have! They went to the election saying that they would work hard to deliver affordable child care, and they have not delivered.

Bill Heffernan (NSW, Liberal Party) Share this | Link to this | Hansard source

Mr President, I rise on a point of order. You have not got your facts right. Last year there was $3 trillion in tax avoidance and transfer pricing; $3 trillion of tax avoidance on your watch!

John Hogg (President) Share this | Link to this | Hansard source

Senator Heffernan, you are arguing the issue. That is not a point of order.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I think it is absolutely appalling that this government want to rip thousands of dollars out of the pockets of families this close to Christmas, and they are absolutely assuming that no-one knows what is going on. They want to ram this piece of legislation through. What happened to helping parents afford child care? With a seven per cent increase in childcare fees across the country, taking thousands of dollars out of the pockets of families is unfair, and it makes you wonder: is Tony Abbott really the Grinch of Christmas?

John Hogg (President) Share this | Link to this | Hansard source

Order! You need to refer to people in the other place by their correct title. Senator Hanson-Young, you still have 14 seconds left on the clock.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

Another time.

Debate interrupted.