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Wednesday, 11 May 1994
Page: 592

Senator MARGETTS (12.04 p.m.) —I would like to comment on the Student Assistance Amendment Bill, which has been touted by the lower house as a bill merely attending to some housekeeping measures for more effective debt recovery of overpayments. The bill gives a legislative basis to Abstudy and the assistance for isolated children scheme, and concerns itself with departments paying each other back for department mistakes and fraud, irrespective of which, the students and their debts are caught in the middle.

  The crux of this legislation is to tinker around the edges of recovering more money from students rather than getting to the bottom of why there is so much student debt, why students cannot pay back the money lost, and how the system disempowers them and increases their anxiety about their financial troubles. Students feel more powerless than ever in the education system with burgeoning debts from their direct education costs, such as books, guild fees and living expenses, let alone from the indirect costs of their HECS debts, Austudy overpayment debts and now bigger debts from the Austudy loan supplement. What is made worse about the latter scheme is that it is a far more attractive option to the poorest of students who do not have much of a choice between living on $130 per week or $160, so they are forced into this, which gives them greater hardship in the future.

  For them it is clear that a short-term benefit is worth taking up, even if it is not viable for them in the longer term. To give honourable senators an idea of the size of the debt which the government has increased yet again in the budget last night, an average student doing a three-year arts degree with HECS deferred payment and a three-year Austudy loan will have incurred a debt of $30,000. It is a pretty shocking debt for people to begin their life in the work force with, and they will probably not pay the loan off before they have children. Many students take on this loan scheme unaware of the consequences later down the track.

  The information that comes with the scheme is inadequate in explaining to students that they are trading in all their Austudy for debts, when they would be far better off with a greater rate of Austudy that they keep, which is supplemented rather than traded in by a personal loan. Calling the Austudy loan scheme a supplement is a misrepresentation of the word. Any genuine assistance to people with low incomes and assets should not make them compromise on receiving money from the government that they are entitled to.

  If the government is serious about debt management, it should look to reduce student debt. It can do this by raising Austudy to at least the Henderson poverty line, adding in a rent assistance component so there is parity between Austudy and the dole, and also reducing the age for the independent rate of Austudy from 23 years to 18 years of age. There also needs to be an inquiry into the charging of illegal fees on campuses. Students have reported to me incidences of paying fees to use computer equipment and buying their course outlines from their tutors, which is a ludicrous abuse of the system and a further expense for students.

  The government also needs to consider parity for recipients and non-recipients of student assistance in the area of tax deduction for self-education expenses. Austudy and Abstudy recipients already get this deduction for expenses over $250, and so should non-recipients.

  It is pleasing to note that this bill has made changes that mean Abstudy and assistance for isolated children recipients can have their decisions reviewed by the Student Assistance Review Tribunal and the Administrative Appeals Tribunal as Austudy decisions currently are. This method of review would be greatly improved by the Student Assistance Review Tribunal taking on the discretionary powers afforded by the Social Security Review Tribunal and making it consistent with other tribunals. It is also worth mentioning here that there is no formal review mechanism for HECS payments disputes. There is a strong argument in favour of setting up a HECS liability appeals tribunal based on the SART model.

  When the government concerns itself with recovering bad debts, it must recognise that only 72 per cent of debts are recovered and many students simply cannot repay them. For those who are perpetually studying or looking for work, and hence are swapping between the dole and Austudy, their debt should be cancelled after a period. On such low incomes it is criminal to take out $10 or $20, which is a lot of money to such people, to pay a debt that may not be their fault at all. Departments that continually harass low income people for money they cannot pay, which are nominal to department budgets and large amounts to poorer people, probably cost the department more in administration than they do in the amount gained from the recovery.

  The decreased chances of employment for new graduates has surfaced as another debt for government. The Australian Government Actuary has recently found that 16.5 per cent of students will never pay back their HECS debts because they will never earn above the average weekly wage required to start paying the amount back. Concerned community groups have spoken up on this issue. There is a strong belief that the government should consider cancelling the HECS debt after 15 years for women who generally do sporadic paid work and earn lower incomes than their male counterparts.

  All in all, the government will be perpetually looking at housekeeping issues in education until it looks at the bigger issues of how and why students are falling into more and more debt. It cannot resolve this until it tackles the necessity of giving students a decent amount of Austudy above the Henderson poverty line, bringing that into line with the dole by adding on a rent assistance component, forming an inquiry into the charging of illegal fees on campuses, and other real issues.