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Thursday, 11 September 2003
Page: 19820


Ms MACKLIN (9:30 AM) —I thank the shadow minister for family and community services for giving me the opportunity to lead this debate on the Family and Community Services (Closure of Student Financial Supplement Scheme) Bill 2003. It is primarily a bill about the government's desire to close a decade-old program which gives students the option to access additional funds to finance their studies through government provided loans. The Student Financial Supplement Scheme was introduced in 1993 to provide flexibility to students who were in need of extra cash to undertake their studies. It is entirely voluntary, and students can take up this option if they so wish.

The Student Financial Supplement Scheme has two forms. Category 1 loans allow students receiving income support to trade in $1 of grant for $2 of loan. This allows them to increase their income by up to $3,500 a year or $135 per fortnight, and provides options in balancing study with employment. Students who are ineligible to access income support and whose parents earn less than $64,500 are able to access a category 2 loan of up to $2,000 a year. The scheme does fill a vital need for students requiring additional income support and provides an extra option for students to suit their individual circumstances. The closure of this scheme, in our view, will not benefit a single student anywhere in the country, and it will penalise around 40,000 students a year who rely on this money to study.

I am sure many colleagues on both sides of the parliament have received letters from anxious constituents who have been sent letters by Centrelink informing them that if this bill is passed a vital source of income will be cut off. Many people who have contacted me have told me that without this income they will not be able to afford to finish their studies—that is how serious the closure of the scheme will be. Students are saying that they would be forced to leave university if the scheme were abolished. The very possibility that abolishing this scheme would mean that people could not finish their studies should stop the government in its tracks. This bill should not proceed for that reason.

Just the week before last I was in Brisbane and a female university student asked me to do whatever I could to save this scheme. She said to me that without the scheme she will not be able to continue her studies. She is a mature age student, she has a family, she has responsibilities and she will not be able to continue her university studies if the scheme is abolished—as the government wants to do. Of course, there are tens of thousands of people like this woman who are waiting on the outcome of this debate—tens of thousands of Australians who are not sure if they will be able to meet their living costs next year and continue their studies if this bill is passed.

A report on student financial assistance was done by the Australian Vice-Chancellors Committee called Paying their way, which was based on the survey responses from 35,000 students. That report found that students are very positive about this scheme. Some of the students who were surveyed about the Student Financial Supplement Scheme said:

If I was not able to receive the supplementary loan I would not be able to attend university.

That is pretty straightforward. Another said:

I could not have done this course without the assistance of an $8,000 government loan.

In summary, students are saying to the Vice-Chancellors Committee, the government and the opposition that the Student Financial Supplement Scheme makes a difference to students' lives. These students must have the chance to finish their studies without this vital financial rug being pulled out from under them. That is what will happen if this bill gets through. The best way of summing this up is that life decisions are hanging in the balance here—life decisions that will have a direct impact on the capacity of students to get a qualification, which of course will also affect their job prospects, skills and knowledge.

The bill, if it does get through the parliament, will deny thousands of Australians these opportunities. We certainly do not want to see people being forced to pull out of their studies as a result of this bill getting through. Labor will oppose the closure of this scheme and will not support this legislation. The Student Financial Supplement Scheme does fill a very important role for many students who we know are struggling to balance their studies with the demands of having to work to pay the daily bills that each and every one of them has. Under the Howard government, we do know that studying is becoming very tough for many students. It is reported regularly in the newspapers that poverty amongst university students has reached unprecedented levels as students are struggling to pay for the basics—food, rent, transport, books and fees. At many universities now we have soup kitchens or regular barbecues being set up by the student unions to feed hungry students. This is the reality for many students at university today. Students are under enormous financial strain because of inconsistent forms of support from this government.

The Vice-Chancellors Committee report Paying their way found that between 1984 and 2000 the proportion of university students who work during semester increased by nearly 50 per cent, from around one in two students to nearly three out of four. And we are not talking about a few hours here and there to earn a bit of pocket money. These are serious commitments of time, with the average student working just under 20 hours a week during semester and nearly 27 hours a week at other times. Not surprisingly, over three-quarters of students working during semester report that it is having an adverse impact on their studies.

It is not only the Vice-Chancellors Committee telling us this. Research that has been commissioned by the Department of Education, Science and Training confirms these very worrying problems. Managing study and work is a report completed by the University of Melbourne and it is another report the minister decided to sit on. He sat on this report for most of last year in an effort to avoid scrutiny on this issue. The report found that nearly half of the students involved in the study described themselves as being under a lot of immediate financial pressure. A third of them said they had seriously considered ceasing their enrolment at university in order to earn more money, and a quarter of students indicated that they chose their classes to suit their work commitments rather than the other way around.

Whenever I go to universities and talk to students about the issues that confront them, they constantly tell me that many of them are unable to cope with the daily difficulties of trying to combine earning money to meet their costs of living with their study commitments. They feel ground down by what can only be described as the never-ending struggle to find enough money for food and rent. At the University of Adelaide a few months ago, a very bright young law student told me that the most pressing issue in her life was not her studies but finding the money to pay the bills. She enrolled in courses that fitted her work schedule, cramming her classes into one day so that she could work the rest of the week—four days of full-time work—leaving her barely any time, let alone energy, for doing her studies. I met another student, also from Adelaide, studying for a double degree in management and finance. This is a particularly tough story. This young student is doing the right thing by his mother. His mother looks after two of his brothers, one of whom is intellectually disabled. He is trying to do his university course while juggling part-time work and trying to do everything he can to help his mother by paying for board and his other expenses. These are the students that desperately need additional financial support. They do not need to lose a scheme that provides some help to them.

All of us know that we should have a student support scheme that enables young people to focus on their studies to make sure that they are able to learn and acquire the skills that will help them become the business community leaders of the future. We do not want them falling asleep in class. How many times have we been told by university lecturers that the direct result of students being under so much financial pressure is that they miss classes and fall asleep in class because they just do not have the time to fit in the amount of paid work they need as well as sleep? While it is reasonable to expect students to do some part-time work—and I do not think anyone would say that was not reasonable—we cannot expect them to work to the point of exhaustion or to take jobs that are compromising their studies. The picture is very grim for those students who are finding it difficult to make ends meet. It is having a serious impact on the quality of their education. This is certainly not a recipe for high-quality, rewarding learning or teaching.

It is no wonder that the number of Australians starting a degree has dropped for the second year in a row. This is a very serious state of affairs for a country that wants to build its future on a highly skilled work force. Between 1995 and 2000, Australia had the second lowest increase in the rate of enrolment in universities in the OECD. Only Turkey performed worse. What an achievement by this government! This year alone there was a drop of 4.7 per cent in the number of Australians starting a university degree. You would think that these figures would be a wake-up call to the government, but instead the government wants to increase the financial burden on students. This government wants to make it even harder by reducing options such as this scheme that help students manage their living costs.

In contrast, Labor have announced that we will keep this voluntary scheme and will extend existing systems of financial support to relieve the burden on students. We will be moving substantive amendments to this legislation when it gets into the Senate to give effect to two important elements of Labor's higher education policy, Aim Higher, our $2.34 billion plan for universities and technical and further education institutes. There are two particular amendments that we want to move in the Senate. We intend to move amendments, firstly, to extend rent assistance to Austudy recipients and, secondly, to progressively lower the age of independence for students on youth allowance from the current age of 25 years to 23 years. These substantive amendments will also maintain the Student Financial Supplement Scheme and require the government to provide students considering a loan with meaningful information about the effective interest rate on loans. We want to make sure that students are fully informed in the decisions they make about the scheme.

Today in the House I will move the second reading amendment which has been circulated in my name. The amendment calls on the government to adopt four important policies: extending rent assistance to Austudy recipients, lowering the age of independence from 25 to 23, making sure that students have the option to take out a loan under the Student Financial Supplement Scheme, and making sure that students are fully informed of the conditions of the loan. I say to the government that it is extremely important that they do more, not less, to help students who are struggling to cope with mounting costs while studying by supporting the amendments which Labor will move in the Senate.

On this side of the House we believe that students need better support if they are to get the best out of their study and, of course, if our country is to get the best out of them. Currently, students who receive Austudy are ineligible for rent assistance. This means that students are forced to work excessive hours as they struggle to pay their bills and find time to study. Under the current system, an unemployed person who rents gets more under Newstart than a student in similar circumstances gets under Austudy. Somebody who is 25 years or over gets more government support if they are unemployed than if they are a full-time student. This is a serious disincentive to older Australians—not that a 26-year-old is really old—undertaking study and, in our view, sends perverse and very conflicting signals to students and to prospective students as well.

Not only are prospective students faced with the additional costs associated with their studies, under the current government arrangements they also suffer an immediate cut of up to $90 a fortnight in their income if they decide to transfer from Newstart to Austudy, when they particularly want to equip themselves with the education and skills that they need to succeed. Not only is this incredibly unfair on those Australians trying to get ahead, but it is certainly working against our national interest. We must create incentives for people to fulfil their potential, not do what these arrangements do—that is, put barriers in the way of people who are trying to make the most of themselves by financially penalising them.

We also have the absurd situation where two students sitting next to one another on the same course, with the same income and the same living expenses, receive a different level of financial support because one is 24 and the other is 25. I would like the government to explain to the 25-year-old in the classroom why they need $90 a fortnight less than the student next to them. Labor's amendment will make financial assistance fairer by extending rent assistance to Austudy recipients. This will benefit about 15,000 students a year at a cost of $70.5 million over four years.

We will be moving an amendment to lower to 23 the age of independence for students on Youth Allowance. As soon as this government was elected, it increased the age of independence for students on Youth Allowance to 25. We now find that far too many Australian families are feeling the strain of financially supporting their children well into adulthood while they are studying. This amendment will certainly ease that strain for tens of thousands of Australian families who are still supporting their children until the age of 25. It is absurd that the government expects parents to continue to support their children until they are 25 if they are studying. I do not think that anyone thinks that 24-year-olds are children any more.

Labor's amendment will put our Aim Higher policies into practice—that is what we will be seeking to do. We are seeking to convince the government that these are good policies that Labor has put forward in the interests of university students. I say to the government: have a serious look at them; consider the needs of university students and make sure that not only do we not close the scheme that is a part of this bill but also that we take the opportunity to extend further assistance to students who are in desperate need of additional support. Unfortunately, the government is seeking to withdraw options for students to finance their studies. That is what will happen if the government is successful in abolishing the Student Financial Supplement Scheme. By contrast, Labor is putting forward proposals that would see additional support provided to students to ease the burden and would make sure that going to university is in fact more appealing, more rewarding and more possible for those students who are under significant financial pressure.

We are still waiting to see the bill with the government's proposed university changes. We thought we might see it yesterday. We were told it was going to come out yesterday, but goodness knows where it is. Whether it is lost or whether the minister just cannot bring himself to introduce it because he has realised it is so shocking—whatever the reason is, we still have not seen this legislation. We know what the government want to do, of course. They announced it four months ago, even though they still have not got the bill into the parliament. The government want to increase the amount that can be charged to university students. They want to allow universities to increase their fees by up to 30 per cent. There has already been a massive increase in the HECS fees that the government charges to university students. If this gets through, a basic science degree at university will cost $21,000. Imagine as a 21- or 22-year-old starting your working life with a debt of $21,000. They also want to massively expand the number of degrees at university that cost the full amount. The Vice-Chancellor of the University of Melbourne came clean and said that a medical degree under this scheme of the government's would cost $150,000. I gather the minister, who has a medical degree, said that he would not have been prepared to pay $150,000, but he is more than happy to make it possible for other Australian undergraduates to face those sorts of debts at the end of their university education.

Labor will of course not be agreeing to any of these measures that maybe one day the government will get around to introducing. We will do everything that we possibly can to prevent this government imposing further debts on Australian students and their families. Far too many senior secondary students are telling me that these fees will put them off going to university. None of us should kid ourselves that students are not put off by the idea of a $20,000 or $30,000 debt at the start of their working lives. They know what that means for them. They know how hard it will be to get a housing loan. Many raise such issues with me. In Launceston last week a young fellow talked to me about what it would mean to him starting a family. These are the serious implications that this government has to take responsibility for. They are the direct result of it continuing to hike up the fees that university students face. I cannot understand why we still do not have this legislation. It was announced in May, four months ago. The minister has had 18 months of consultation on the whole thing.


Mr Swan —Because he's embarrassed.


Ms MACKLIN —Maybe he is embarrassed. Maybe he had a look at the polling that was done by the University of Western Sydney that showed that half the people polled would take this into account at the next election. Maybe the government is starting to figure out that the people of Australia—actually the families of Australia, the mums and dads—want to make sure their children can go to university and not be loaded up with massive levels of debt, so maybe that is it. Maybe the government has realised how bad this legislation will be for Australian students and their families—we can only hope.

We have had one key Independent senator already signalling that the education minister's disorganisation and delays have jeopardised full consideration of the legislation before the end of this year. This is an extremely serious development. Each and every one of us knows that universities are in desperate need of additional funding, even if it is the limited amount of funding that is involved in the government's package. Let us at least try to get this limited amount of funding into universities, but at the rate at which the government is going they will not even get that. I notice the education minister is not even down to speak on this very important bill. It might be a family and community services bill but it is entirely about making sure that students are able to go to university and still pay the necessary bills that each and every one of us has to pay. So I would say to the education minister: `If you're serious about caring about students being able to go to university and continue their studies, get down here and defend what this government is doing, which is attempting to close an important scheme that has given students the option to continue their studies.' I would say as well to the minister, `For goodness sake, release the legislation on the broader changes that the government is seeking to make so that we can at least get the desperately needed funding into the universities.'

We want the money to flow to universities. We certainly will not agree to any increases in fees for students but we, like the universities, want to see the additional money getting to the universities to relieve some of the pressure that they are under. Surely, as I would say to the minister for education and the Minister for Family and Community Services, the fact that many students are saying—and I am sure they are saying it to government members, as they are to opposition members—that they will have to stop studying if this bill is passed should rouse some support from this education minister. I know he does not get out and talk much about higher education because he knows how unpopular his policy is, but even this minister should be roused into some sort of response to what will be a very serious problem if this bill gets through and the Student Financial Supplement Scheme is abolished. Minister, listen to what the students are saying: they are saying that they will have to give up their studies if they are not given the opportunity to take up loans as a result of this scheme; make sure that they can at least continue their education; have another think about the very serious implications of hiking up university fees because of the impact that it will have on students in the future and on their families, who of course try to do everything they can to support their students; and support the amendments which Labor will move substantively in the Senate. I certainly call on government members to support the second reading amendment which I now move:

That all words after “That” be omitted with a view to substituting the following words:

“the House rejects the Bill and calls on the Govern-ment to:

(1) maintain the student financial supplement scheme in recognition of the hardship faced by struggling stud-ents and their families;

(2) reduce the age of independence for Youth Allowance from 25 to 23;

(3) extend rent assistance to Austudy recipients; and

(4) provide meaningful information to students on how the supplement compares to comm-ercial loan products including the full range of effective interest rates applying to the supplement”.


The DEPUTY SPEAKER (Mr Jenkins)—Is the amendment seconded?


Mr Swan —I second the amendment and reserve my right to speak.