Mr LATHAM (4:54 PM) —I speak in support of the second reading amendment that has been moved by my colleague the honourable member for Jagajaga (Ms Macklin) to the Social Security Legislation Amendment (Youth Allowance Conse quential and Related Measures) Bill 1998 . This bill is designed to complete the administrative arrangements flowing from the introduction of the youth allowance. It contains some undesirable changes for students aged 25 and over. It is those changes that I will make the main focus of my remarks.

The bill establishes an Austudy payment in the Social Security Act that provides income support for students, moving legislative responsibility for students away from the DEETYA portfolio in line with the youth allowance arrangements. On 30 June this year it is intended that DEETYA will make its final payment to Austudy recipients. I understand that special transitional arrangements have been made and no-one should be out of pocket because of the change in administrative procedures, but students receiving Austudy may be out of pocket for other reasons.

Changes to the rate at which their entitlement tapers off once their income exceeds a certain level could actually leave students $73 a fortnight worse off. Currently, students can earn $6,000 of personal income, after which their Austudy entitlement reduces by 50c for each extra dollar earned. Under the new arrangements, only the first $80 of additional income is reduced at the rate of 50 per cent; after that the reduction will be 70c for each dollar of income. This change will reduce the point at which the Austudy entitlement ceases altogether from some $17,800 per annum in personal income to below $16,000. Similar provisions will apply to the income of partners of Austudy recipients, with losses of up to $68 a fortnight at a partner income level of around $25,000 per annum.

The arrangements are being brought into line with the rules currently applying to various social security payments, but this initiative, however, represents bad news for students already hard hit by this government's changes—students who are feeling the impact of the half billion dollar cuts to Austudy imposed by the government. These changes will also affect students receiving youth allowance payments, but they will impact more heavily on older students because the government has decided that rent assistance is not required once students turn 25. The member for the National Party seat who spoke earlier in the debate, the member for Mallee (Mr Forrest), and made the point about rent assistance really should have pointed out that the capping of that provision at age 25 is not going to benefit that large number of rural and regional mature age students who are seeking a higher education, seeking to advance their skills.

Any reduction in entitlement will not be ameliorated by the expanded availability of rent assistance—that is, the government is certainly taking with one hand much more than it is giving in rent assistance for students 25 and under. My office has not been able to obtain either from the minister's office or from the department information about how many students will be affected by the new tapering arrangements. Again we find confusion in the administration of the Howard government with regard to student income support. One assumes that we will know these things some time after 1 July, when these new arrangements cut in. Some students who began the academic year on the assumption of a certain level of entitlement throughout the year may discover halfway through that the rules have changed, that the goalposts have moved, and they are receiving less.

The actual means test will also be scrapped for these older students. It will be replaced by an income test involving gross, rather than taxable, income. This is a blunt instrument for judging a person's capacity to meet educational expenses. It is likely to result in some glaring anomalies. Fitting in with the requirements of the Social Security Act does not seem to me to be an adequate explanation for this change. There are some improvements that could be made irrespective of the argument concerning consistency. Perhaps it is an admission of failure by the government that it has been unable to competently design an actual means test.

When one considers the overall impact of the government's common youth allowance, the extra burden it will place on the parents of young unemployed people, the impact on schools of an additional 27,000 16- and 17-year-old students moving back into education and the penalties it imposes on students who work or those whose partners work, one can see that the government is not serious about helping young Australians complete their education and move into paid employment. Its real agenda is a winding back of the role of government, an abandonment of its responsibilities, which can only damage Australia in the future.

In the issues that I have raised about student income support there are some technicalities in this legislation which require the attention of the parliament and, one hopes, rectification by government ministers. Of the other issues that have been included in the amendment moved by the honourable member for Jagajaga there are some broader questions of policy which also need to be canvassed.

There is no doubt that this government's changes to Austudy have been part of regressive changes to post-secondary education in Australia. It is bad enough to see 21,000 university places abolished. It is bad enough to see $240 million cuts to TAFE. It is bad enough to see the introduction of $100,000 up-front undergraduate fees. It is bad enough to have seen the changes in the HECS regime which are acting as a disincentive for a whole generation of young Australians going on to higher education. Those things are bad enough, but on top of those things the impact of a half billion dollar cut in Austudy, a half billion dollar cut in student income support, is absolutely appalling.

This is a government that always regards education as a narrow cost off the budget, a cost which is more worthy of cutting than areas like defence which have been quarantined on the Commonwealth outlays envelope. This is a government that sees education as no more than a cost. The Labor Party has a very different approach. We want to see education as an investment, the very best investment we can make, in Australia's future. For that reason the Labor Party is interested in strengthening the student income support arrangements and we will be producing policies to that effect in the next election campaign.

It is very important to make sure that government regards student income support as an investment rather than a cost. With adequate investments in young Australians, to see them through to the completion of their degrees and TAFE qualifications, we make a very good judgment about Australia's future. On the government budget, you actually save money if you get people through with adequate student income support, if you get them graduating, moving into good jobs and good careers.

If we do that for an increased number of young Australians, they will have less reason and less cause to draw on public sector budgets in the years ahead. They will have less reason to draw on unemployment benefits; less cause to draw on the whole range of social security entitlements that they might need to access if they do not have educational qualifications. As I get around the country and talk to people about these issues of education and employment it is sometimes said, `Well, it's good to educate young people, but where are the jobs?' We need more jobs for young Australians, but I can give this guarantee to the House and to every single member that if a person has a poor education they are far less likely to get a job than someone with a good education. A country with a poorly educated population is less likely to succeed in the global economy than a country that is well educated.

The Minister for Immigration and Multicultural Affairs (Mr Ruddock), who is at the table, nods. Why then would the minister be part of a government that made education and training the number one target for funding cuts, while at the same time it was quarantining defence spending? Why would the minister be part of a government—the only government in the Western world—that has introduced a higher ratio of military to education spending? Why would he be part of a government that does those things if he thinks that education is a good investment in Australia's future? These things are important to place on the parliamentary record, and I think the minister in his quieter moments might even concede that they are true. The important thing in this debate is to recognise the good argument for strengthening student income support, because if we do that, in the longer term we also make sounder financial management for the Commonwealth budget. It is also a very good argument to simplify these arrangements. I thought the Commonwealth ombudsperson, Philippa Smith, summed it up well when she said that you basically need a PhD these days to understand how the Austudy scheme works, it is so complicated. It has been so tightly targeted and overadministered.

There comes a point in public administration and bureaucracy where you cannot cater for the sort of diversity that is now in our society—income support for students, the diversity of the relationship they have with part-time work, with their study, with their courses, with their location and with their parents' income level. It is a whole plethora of diversity among students around Australia.

We have tried to devise a scheme over the years that caters for that diversity with extra categories of payments, extra targeting, and extra cut-in and cut-out points. It gets to the situation where it is an administrative nightmare. The government found that with the actual means test—one of the most horrific experiences that students had to go through when trying to access some basic income support.

So you can overadminister these things, and you can overtarget. One of the goals of the Labor Party in policy development is to try to simplify these arrangements, because everyone knows that a public law which cannot be understood by the public is not a good law. That is the point we have got to with Austudy; it cannot be understood by the average student. Perhaps even the average parliamentarian cannot understand the complexity of the scheme. The member for Moore (Mr Filing) knows what I am talking about. It is a very, very complex scheme, and we need to do things to simplify the arrangements.

The third plank in Labor Party ideas in this area is flexibility—to provide some sort of moulding capacity whereby students can take a bigger bundle of entitlements and use them according to their own circumstances. Instead of well-intentioned bureaucrats trying to cater for diversity with new categories, targeting, and cut-in and cut-out points, we would allow students to cater for their own diversity by moulding their entitlements according to circumstance, that is, bringing forward entitlements if that is where students need the income support to get through a hump in their study arrangements without doing so much part-time work, or deferring the arrangements if they want to place greater emphasis on full-time study towards the end of their undergraduate or TAFE studies.

Flexibility is very important. I have always been attracted to the ideas the member for Sydney (Mr Peter Baldwin) was advancing in his time as Minister for Social Security, that we cannot rely now on a welfare system and income support system that is purely residual and narrowly focused with one-off payments for specific purpose. We need flexibility, the moulding capacity of allowing people, using some of this advanced information technology, to take greater control of how they use their entitlements from government. I am interested in these things. I even decided to write a book about some of them, and that has been mentioned in the parliament earlier. There is plenty in there about education. I do not know where old Count Yorga, Dr Kemp, gets this idea that there is nothing in my book about education; it is all about education. He will say or do anything to make his point. I think he has got the wrong book. I will have to send him around a copy so that he gets back on track. Poor old Yorga, he does not really know what he is talking about.

The other point I make is that the Labor Party is interested and committed to progressively reducing the age of independence for Austudy arrangements. There was a debate about this recently in the Senate. I suppose it got caught up with all those political tactics they play in the other place, where the Democrats and Greens took the luxury—I suppose the Independents even try to do this from time to time—of promising the world, knowing that they will never have to deliver; promising the world but knowing they will never be in government to actually deliver. So they had all the ambit claims. The Labor Party moved its commonsense amendment, which is our policy, to progressively reduce the independ ence age, consistent with our very strong commitment to fiscal responsibility and surplus budgets in the first three years of a Labor government.

The other point in this debate relates to schools policy. There is no doubt that the Howard government is running down the capacity of schools around Australia to cope with the impact of the common youth allowance. Last year, the government had a cabinet document which also came into the hands of the opposition. It showed that some $140 million was needed to cope with the impact of the 27,000 students who would be coming back into our schools because of the common youth allowance. The Prime Minister (Mr Howard) made a statement earlier this year. Belatedly, the government has provided $40 million, so schools are still being short-changed by $100 million. For every existing student working hard and studying hard in Australian schools that is bad news because they run the risk of their school not being able to cater for the needs of the new students.

These are students often at risk of long-term unemployment, at risk of not valuing education—obviously students who would rather, by choice, not be at school. Those students have particular needs in the classroom that need to be catered for with specific government programs, which, from time to time, can be quite expensive. But, if we do not make that commitment and investment, we run the serious risk of the new students disrupting the studies of the existing students. Of course, that would be a tragedy for the school system.

I could not think of anything worse than a young Australian now in the classroom wanting to study hard and get ahead, use education as a springboard, do a good job and get a good career, finding that the capacity of their school to deliver such a service has run down because the Howard government will not fund the impact of the common youth allowance. So I would urge the government to make up for the shortfall of $100 million, even at this late stage with the bill and its impact kicking in on 1 July. Let us fund up our schools so they cater for every single student, whether coming back into the system or currently studying in our schools.

The Labor Party recognises that there are few, if any, jobs in the new economy for 16- and 17-year-olds without skills. There is no work available in some parts of Australia for unskilled teenagers. That is the truth of the new economy, the impact of the changing nature of work and the labour market. Government needs to respond by creating opportunity. We have no objection to the abolition of unemployment benefits for 16- and 17-year-olds, but government should never abolish benefits without at the same time creating opportunity in another area. Government should never use the language of reciprocal obligation simply to abolish benefits without also creating opportunity.

Our policy on this is to support the realities of the new labour market, support the fact that we want 16- and 17-year-olds to get a good education under their belt, but that can be done only if government is willing to fund up the needs of schools, TAFE and other training programs. The $100 million gap really is a black mark against the record of this government, a black mark that is so much a part of its approach to education funding—to look at it as a cost, to slash it more than other parts of the Commonwealth budget and, in the end, run down the opportunities available for young Australians.

I have tried to outline the concerns the Labor Party has about some of the technical aspects of this legislation and also give some outline to the principles we would adopt in the reform of student income support arrangements—strengthening the scheme, simplifying the scheme, providing greater flexibility as well as progressively reducing the independence age. On top of that, it is the responsibility of this government to act on its departmental advice, to drag out the old cabinet minute and concede that $140 million, not just $40 million, is needed to allow our schools to cope with the impact of the common youth allowance. I am pleased to support the amendment that has been moved by the honourable member for Jagajaga.