Contribution to the debate regarding the Government's changes to Youth Allowance.
Date: 17 June 2009
I rise today to provide a contribution in this matter of public importance debate in relation to the changes to the youth allowance, but I want to put this debate in the context of the previous government and of the reforms that we have undertaken since coming to government. I also want to emphasise throughout my contribution, Senator Williams, that it is vitally important-but probably irrelevant to and disregarded by the likes of you and your colleagues-to provide your constituents with an accurate and holistic report of the changes. Once I go through and outline the changes, you will see that there will be a lot of benefits for people who come from rural and regional Australia. In fact, people who have contacted my office, whom we have personally rung and assisted, were not aware of the numerous other changes and benefits that are part of this package. So, if you are going to hold public rallies and answer queries from your constituents, you had better do it on a basis of knowledge-a total knowledge-of the changes and benefits in this package.
But let me put this debate in context. We had 12 long years of a coalition in government who just sat on their hands and took no action when it came to addressing student poverty in this country. That was a government that stood back and did nothing at all while we saw only 15 per cent of university students in this country come from a low SES background. That was a government that failed to act while, under their watch, regional and rural participation in universities actually declined. Yet today we see from the opposition-if I could be so bold as to suggest this as a senator from the Northern Territory-crocodile tears being cried on the other side of the chamber. They are only too happy to complain when we have a reform agenda in front of us, but they do not have-and have never had-a plan for addressing the welfare of our students. They have had no plan for ensuring that students from a low socioeconomic background or those from regional and rural Australia are able to afford to go to university. In comparison, since the election of the Rudd Labor government, we have tackled the issue of student poverty head on in a comprehensive and thorough manner.
Let me take you back in time. In 2005 I participated in the Senate employment, workplace relations and education references committee, and we tabled a report in our inquiry into student support measures. There are those who will remember former Senator Natasha Stott Despoja, who was quite passionate about this issue in relation to university students. In our report we were critical of the inadequacy of student income support. Among other things, the report found fault with the harshness of the youth allowance eligibility criteria, specifically relating to the age of independence and the parental income test threshold-two areas of critical comment by the Senate committee. These failings, the committee argued, both penalised those students who were in most need of financial assistance and had a detrimental impact on these students and their academic participation rates and success. That report was handed down in 2005. There was no response from the previous government-no changes, no action, no change in their policy direction and not even a plan to attempt to change it in the lead-up to the 2007 election. Yet they now have the audacity to sit on the other side of the chamber and complain about the changes that are being undertaken to student youth allowance and the benefits that will bring to students across the country.
The first action that Minister Gillard took when we came to government was to commission an expert panel, headed by Professor Denise Bradley, to undertake a broad review of tertiary education to try to assess the damage that was caused by the 12 years of neglect under the previous government. It is following the provision of this expert advice that we have now acted. The Bradley review, as it has now come to be known, is publicly available. That review exposed the untenable situation that the coalition had created, where those students who needed income support the most did not receive it, while students who did not need the support were receiving the payment.
It was found that the Howard government had created a situation where even students on the maximum benefit reported that the amount available was insufficient to meet basic living expenses. It was found that the purchasing power of student income benefits was almost half of average income support. But we have heard no plan from those opposite about how to fix the situation-not before the last election and not since the election. The level of youth allowance was so inadequate that it drove nearly 71 per cent of full-time domestic undergraduate students to take on work while studying. These students were working, on average, 15 hours a week-one in six full-time undergrads were working more than 20 hours a week on top of their studies. Despite the huge impact this was found to have on learning outcomes and the quality of the student experience, the Howard government had no plan to fix the situation. Bizarrely, while students from low socioeconomic conditions did it tough, the Bradley review found that 36 per cent of students who were living at home and were receiving youth allowance through having been considered 'independent' were actually from families with incomes above $100,000 and 10 per cent of those students were from families with incomes above $200,000. The Howard government had no plan at all to redirect student income support from those who had it and did not need it to those who did need it.
The Rudd Labor government, on the other hand, is opposed to the provision of welfare payments for the benefit of those who do not need them. That is why, after a comprehensive review by the expert panel, we have announced that the working eligibility criteria should be tightened to ensure that this sort of abuse of welfare does not continue. In line with the recommendations of the Bradley review, we have tightened the independence criteria so that it is a true measure of independence from parents. It is based on full-time attachment to the labour force-that is, 30 hours per week rather than part-time work over two years or earning around $19,000 over an 18-month period. Be very clear about this: time frame and the number of hours have not changed. There were, in fact, three options in terms of workforce participation criteria, and one of those is there.
So, if you want to talk about the change in hours or the length of time, you are wrong. That has not changed. We have invested the savings-$1.8 billion over the next four years-in expanding eligibility by increasing the parental income test. I do not hear you talking about that, Senator Nash-
And we are bringing down the age of independence-and you do not talk about that either-and creating new scholarships. That is the third thing that you do not talk about when you try to discuss this issue. You want to focus on one aspect, not four aspects. This will mean that parental income will now be the primary measure for eligibility. So, in fact, what your parents earn and their threshold will be the primary measure. For many students, this means that they will no longer have to prove their eligibility for youth allowance by working. I would have thought that is what you would want to achieve, because more students than ever will be eligible for youth allowance automatically under the raised parental income test.
This reform will allow 67,800 young people to access income youth allowance or ABSTUDY to support their participation in post-compulsory secondary education, vocational education, higher education, Australian Apprenticeships or a combination of activities. In addition, 34,600 existing recipients who currently receive a part payment will receive an increase in their payment-I don't hear you talking about that either, Senator Nash-often to the full payment rate. Those who have worked full-time and are independent of their parents can still access support in this way.
Under Labor's system, a family from the bush with two kids at university, who might be aged 17 and 21 and living away from home, will now be able to automatically receive some support if they have a family income up to $139,388. That is up from the previous cut-off, for this type of family, of around $75,324. That is a major increase in the eligibility criteria for parents' income. But I do not hear the coalition talking about the benefits and gains from increasing the threshold. Under our new system, families who receive one dollar of student income support will be entitled to the entire Student Start-up Scholarship, worth $2,254 for each year-not once but each year-the student is in university and is eligible for student income support. This new scholarship is equivalent to an increase in payments of around $43 per week.
Under existing arrangements, a young person on youth allowance or ABSTUDY is considered to be dependent on their parents until they turn 25, unless they establish their independence through other means. The package of student income support reforms will progressively lower the age of independence to 24 in 2010, 23 in 2011 and 22 in 2012. So we will lower the age of independence to ensure that the age of independence accurately reflects when individuals become independent of their parents.
These reforms are a major achievement. They will increase access to student income support and provide stronger and more equitable assistance for the students who need it most, including students from low-income backgrounds, those from rural and regional areas and, of course, Indigenous students. Of course, what this whole issue does is to remind the electorate what a mess the coalition left us with with regard to student support and tertiary education. You sat on your hands for 12 long years and did nothing to address the situation when it comes to supporting students who try to study.
The Nationals will have you believe that these reforms disadvantage regional and remote students. However, they clearly have not read the detail of the policy. The changes actually provide for more regional and remote students to be able to access Youth Allowance. But the other side does not want to hear about the good news and the positive changes in this. They just want to focus on a single issue without looking at the whole package.
A 75 per cent discount will now be applied to the parental income test when considering business assets, including farm assets. I do not hear them talking about that part of the package. 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. In addition, more regional and remote students will now be able to apply for the new relocation scholarship. The relocation scholarship provides $4,000 in the first year and $1,000 in subsequent years. In comparison to the old Commonwealth accommodation scholarship, the relocation scholarship represents a 28 per cent increase in the number of accommodation related scholarships that will be available to students living away from home.
After years of neglect, the coalition have prepared a range of half-baked amendments to our policy before the legislation has even entered the Senate. The coalition aim to delay the implementation of the new saving measures for a year and will pay for this by slashing scholarships for 146,600 needy students. They also want to create a targeted scholarship pool for rural and regional students, whose scholarships would only amount to a small portion of the money they intend to rip out of scholarships for all students, regional and metropolitan alike.
The coalition is leading a concerted misinformation campaign, which has caused much anxiety for students who are undertaking a gap year and their families. They suggested students who are currently working and who might previously have been hoping to access Youth Allowance under old workforce participation criteria-that is, earning about $19,000 over 18 months-will now no longer be able to access Youth Allowance. What you do not tell many of the students is that, in some circumstances, many of those students who are currently in their gap year will not need to work any more, because they will automatically become eligible for Youth Allowance under the changes to the parental income test.