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Wednesday, 11 May 1994
Page: 593


Senator BOSWELL (Leader of the National Party of Australia) (12.10 p.m.) —I wish to address the Student Assistance Amendment Bill. At the outset I would like to say how grateful I am that this amendment on Austudy and the health care card will go through with the support of the Australian Democrats and, I suspect, the Greens—although I have not had any indication of that.

  This bill seeks to increase the scope of the Student Assistance Act which provides the legislative basis for the Austudy scheme. This bill will give a legislative basis for Austudy, Abstudy and the assistance for isolated children scheme, which are currently administered by government approved guidelines. The bill also provides for miscellaneous changes to the act, including extension of the debt management scheme and administrative charges to Austudy.

  Albeit assistance for the isolated children's scheme and Abstudy is very worthy, I will concentrate on Austudy. It provides eligible students with income support to complete secondary education and continue on to tertiary education. It is the largest student assistance program. In 1992-93 the Austudy bill came to $1.4 billion and assisted 466,676 students.

  In discussing the Austudy scheme I would like to address the very important issue of low income farm families and their lack of access to Austudy for their dependent student children. As a Department of Employment, Education and Training brochure states, without this financial assistance thousands of students would be unable to complete their education. This is certainly the case for many farm families which consistently have been denied Austudy, due to holding farm related assets over the assets threshold despite having low or zero income.

  There seems to be a widespread belief that because a farmer owns a farm worth over $734,000—with a 50 per cent discount of the net market value taken into account that amount is the Austudy asset limit—the family can afford to educate its children. This belief is difficult to reconcile with the fact that the average broad acre farm business profit for 1992-93 was $11,000—and only nine per cent of wool producing farms were in profit.

  In 1992 farm indebtedness to financial institutions stood at $15.878 billion. Many farm families struggle to get food on the table, let alone to have the money for textbooks, compulsory student union fees, uniforms and so on. In an attempt to remedy this inequitable situation, my colleague Senator Teague will move a very important and much needed amendment to the bill.

  The amendment, which the coalition has sought for some time, will serve to waive the Austudy assets test for all health care card holders. This amendment would be of enormous benefit to farm families which, despite having low or zero incomes—and in recognition of that are issued with health care cards by the Department of Social Security—fail to meet the assets test. This amendment would enable hundreds of rural students to complete their secondary and tertiary education, which otherwise would be impossible. In the last budget the government made a commitment to exempt all health care card holders from the assets test. Then, in callous fashion, it broke that commitment and in the process smashed the expectations of rural students which the government, with its budget promise, had built up.

  Numbers of students planned their studies for this year on the basis of information distributed by DEET. Their plans were cruelly shattered when this budget promise was revoked. Whether a broken promise or a bureaucratic bungle—to use Minister Free's phrase, `a spectacular administrative blunder'—the fact remains that hundreds of students had their study plans and hopes for the future thrown into turmoil as a result of the government's action.

  I would like to give a brief account of this spectacular administrative blunder because it would serve to illustrate the indifference of this government towards the plight of rural students. It shows a minister not on top of his portfolio and presents a department that has subsequently been revealed to be utterly deficient in its self-monitoring, accounting, record keeping and information technology systems.

  It is well known by now that DEET issued at least four documents last year which stated explicitly that health care card holders would have the Austudy assets test waived. This departmental material included a 1993-94 departmental budget kit highlighting changes that would affect DEET; a DEET press release heralding the changes in policy; and, most misleading for students, the Austudy application and guide and the 1994 Austudy guide to student finance. It was not one blunder; it was not two; it was four.

  I can understand the minister being embarrassed about the lack of support he got from his department. One thing I cannot understand is why the government did not go in and support the minister in his quest to bring forward Austudy based on the health care card assets test. It was a matter of serious embarrassment for Mr Free, and I believe it will probably affect his political career.

  At the estimates hearings I placed a series of questions on notice as to how the department could have issued such a volume of material if this was contrary to government policy. I have never received a satisfactory answer. DEET's bungling created a great deal of confusion for students who accepted the department's advice in good faith and accordingly made plans for their further education—plans that, for many, were shattered when the department belatedly realised its huge error and imposed the assets test on Austudy applicants holding health care cards on the arbitrarily appointed date of 7 February.

  To add further confusion, Minister Free's office issued a statement on 15 February 1994 to the effect that `the government wanted to honour its policy but, at this stage, is not clear whether it can', as reported in the Australian. If the government wanted to honour its policy, I cannot see any reason why it did not. Mr Free was once again left out on a limb, getting no support from the government.

  I asked a question of Senator Schacht, representing Minister Free, on 21 February in an attempt to put an end to the confusion. Senator Schacht read a brief from the minister which stated, in essence, that it was not the intention of the government to allow all health care card holders exemption from the assets test; rather, it was a budget measure to allow health care card holders to fast-track access to Austudy on the grounds that they had already met the means test administered by the Department of Social Security. Again, what Mr Free wanted was obviously not what the government wanted. Mr Free's brief also stated that he had ordered an urgent internal investigation into how DEET's quality control measures failed to pick up this diversion from the intent of government policy.

  Despite placing several questions on notice at estimates, I was never apprised of the findings of the urgent internal investigation. What was also never explained to me was what policy was being referred to in the minister's statement in the Australian that `the government wanted to honour its policy but, at this stage, is not clear whether it can'.

  If the policy was to fast-track Austudy payments for health care card holders, why would the government have difficulty in meeting that? Or was the policy actually that all health care card holders would be exempt from the Austudy assets test as explicitly stated in DEET's literature? What does seem likely is that at that stage the minister did not know what the correct policy was. During the debate on a matter of public importance concerning Austudy in the House of Representatives on 2 March moved by my colleague the shadow minister for schools, vocational education and training, Kevin Andrews, Minister Free's explanation of the bungle was that it flowed from a departmental misinterpretation of a budget decision and that the original budget decision stood unaltered.

  Clearly, the minister was laying the blame squarely on DEET for, firstly, misunderstanding the budget decision and, secondly, promulgating this misunderstanding through the community. Yet how is this assertion reconciled with the secretary's report, which I received in response to my estimates question? It stated that the budget kit and the Austudy application and guide were prepared in the branches responsible for these matters and were cleared up the line in the department, including the secretary.

  Minister Free and his office then cleared the documents. At least eight separate clearance processes were involved. The other material was cleared at branch level, in the department and by Minister Free. How on earth can Minister Free blame the department for this massive bungle when he approved all the department's publications? Maybe he, like his colleague, only read the cover and not the contents of these documents, because that is probably the only explanation that is available.

  Another important point to be raised is that according to that same secretary's report the Department of Finance expressed concerns regarding the use of health care cards when determining eligibility for Austudy as far back as 1 November last year. Yet the department took over three months to act in response to the advice of the Department of Finance. During this time, a meeting took place between Finance and DEET on 1 December 1993, when Finance raised further concerns about this matter. The secretary's report stated that it would be `necessary to apply an assets test to those health care card holders known to be farmers or other self-employed people.' However, DEET did nothing in response to these concerns. The report further stated:

This was not brought to the attention of anyone above branch head level. The assistant secretary concerned did not bring the issues to the attention of ministers.

The report stated:

Following the meeting of 1 December 1993, a circular was prepared for student assistance centres indicating that an assets test should be applied where it could be reasonably expected that healthcare card holders had not passed a similar assets test to that of Austudy. Although this was cleared with the branch head, it was apparently never sent.

One has to ask: why was this important memo never sent? The secretary's report further stated:

A more detailed circular was sent on 7 February. A public announcement was not made because only a small number of people were affected, but many people could become confused by believing that it affected them when it did not.

I do not know what a small number is, but up to 200 or 300 people could be affected by this decision. I would suggest that far more students were confused when official Austudy advice such as the application form and financial guides stated that possession of health care cards would mean exemption from the Austudy assets test. A public announcement would have gone some way to clear up the widespread confusion in the community over this matter. The secretary's report stated:

When this matter came to the attention of Minister Free he wrote on 15 February to the Prime Minister, the Treasurer and the other ministers concerned, but did not obtain an agreement to permit all healthcare card holders to be assessed for Austudy without an assets test in 1994.

Minister Free's understanding to secure such an agreement can be seen for what it is—a last ditch attempt by a minister to move himself from the mess created by his department and his office. According to Senator Schacht at estimates hearings earlier this year, 100 students had successfully applied for Austudy with the assets test waived. According to a departmental officer, 20 students were thought to be adversely affected when the government reneged on the department's commitment to waive the assets test from 7 February onwards. But one would imagine that more students than that could have been affected.

  I put several questions on notice in estimates in an attempt to secure an estimate of the cost of waiving the assets test for all health care card holders, but I have never been given answers. The fact now is that the assets test will be removed for families that are holders of the health card. It is clear that that amendment will be carried by the Senate. That amendment will go to the House of Representatives, where it will be presented. If the government does not give any support to Mr Free to stop a very embarrassing occasion taking place with this amendment being rejected by the House of Representatives and being sent back here, then I believe Mr Free has no option but to resign.

  We have already seen in the white paper that many children of farmers are going to be removed from jobsearch allowance and are going to be placed on a training levy. That training levy will be subject again to an assets test. Farmers' children will not be eligible for Austudy and they will not be eligible for jobsearch allowance at a time when the average indebtedness of property is massive and at a time when only eight or nine per cent of them are making a profit, with the other 91 or 92 per cent making a loss. Their children will not be able to get Austudy or receive a training allowance, so they have a double jeopardy against them. That is most unfair.

  We are told time and again by the government that it wants a clever country, that it wants people in training and that it wants regional development. What better way to develop this nation than having children from farms working as agricultural scientists and agricultural economists? They are going to be the future for regional Australia. If there is no farming in regional Australia, then there will be no regional Australia—the heart will be ripped out of this country. By taking Austudy away from farmers' children and then denying them a training wage, the government is ripping the very heart out of this country: it is to fly completely in the face of its policies on training. It seems that everyone else in this country can receive a training allowance or some form of jobsearch allowance under some program, except farmers' children.

  I do not know what Senator Sherry is going to do about it. I would suggest that he strongly urge that the government accept this amendment when it goes to the lower house, not only to support his colleague Mr Free but because it will be terribly embarrassing—


Senator Sherry —He is a very good minister.


Senator BOSWELL —I am not suggesting he is not.


Senator Sherry —I thought you were asking him to resign.


Senator BOSWELL —I said that he should have no alternative if he does not have enough support from his colleagues in cabinet to carry this amendment. He is letting his department down—or it is probably letting him down. But the people that he is letting down mainly are the rural children of Australia. The government will let them down also if the amendment is not carried.