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Monday, 21 February 2011
Page: 654

Mr WINDSOR (4:14 PM) —There are a few issues that I would like to raise. Essentially, we are looking at two issues here. One is the substantive issue of youth allowance. We have talked about that a lot. In the previous parliament there was legislation that came in. I was involved in some of it, and I think the member for Sturt would remember that there were games played. The outcome that we are dealing with at present was not a perfect outcome. In fact, a deal was eventually done in the Senate. I think the member for Lyne has referred to it as ‘a dog of a deal’. I think most of us recognise that it was not perfect and that it was to address a certain sum of money rather than a sum of students. Nonetheless it did occur, and I remember quite clearly that the Minister for Education at the time and the current Prime Minister was trying to negotiate with one of the senators—who will remain nameless for this exercise, but I think most people who were closely involved at the time would know which senator I am talking about. I tried to negotiate a better outcome in terms of a regional package for students who were going to be disadvantaged, particularly that cohort of students who were going to have to leave home to find a job to prove that they were independent of their home so they could achieve an independence test for the youth allowance. That was a proposal of about $30 million which died in a ditch but would have got the support of government at the time had in fact, one particular senator seen the benefits to country students of taking on that regional package.

The youth allowance is an issue that all country members are very concerned about. There was also an issue—and I still think it is an issue—where city based students in particular use the independence test to obtain income and then live at home. They get the benefits of both worlds. There is no doubt in my view that under the Howard arrangements there was rorting going on in the system. On extreme occasions two fathers would exchange cheques for $18,600 to prove that their children were independently earning income over a period of time and, therefore, could access the public purse for assistance. I can remember—and I think the member for Sturt can remember quite clearly too—how there were issues of retrospectivity which have since been cleaned up. Because of the various constituency bases in here there were issues of city based children who did have the option of living at home and attending a university accessing the public purse to the same degree as a country child at Walgett, where they do not have a university and have to leave home to study. The member for Parkes, which includes Walgett, is sitting in front of me. So there are still inequities—and they were in the coalition’s argument as much as they were in the government’s argument at the time.

Before moving on to the second part of the issue I want to bring some members of parliament and the community up to date on what happened in the previous parliament. During the coalition years the income test for students had a cut-off point that started at $34,000 to $42,000. It was $34,000 at one time and $42,000 at another. Students’ family income, once it reached $42,000, started to decline in terms of the capacity of that student to access youth allowance. That is not saying it disappeared immediately; it started to move backwards. I was supportive of the then Rudd government in addressing that issue, because there are a lot of kids, country or city, who could not go to university because their parents were relatively poor. The $42,000 ramp-down figure was far too low. The emphasis changed slightly and was done to within a dollar figure rather than trying to address the substantive issue. The government increased the income test. I have had countless parents in through my doors and I am sure other members have as well. When the debate is solely about the independence test, when you refer them to their accountant the penny very often drops and they say, ‘Oh, I didn’t realise that; I didn’t realise that my child could obtain youth allowance at relatively high income levels.’

I will give some examples. For a family income of $80,000 with two students at university, if they had taken the year off to prove that they were independent under the old arrangements or even under the current arrangements, the family would get $28,000 annually. That is not $28,000 each; that is the assistance that the family gets. Under the family income arrangements, based on the $80,000 income the family would receive $21,300. The cut-off level for that family would have been $72,000 under the old arrangements. They would have got nothing. For a $100,000 income in the same example, that family would still receive $17,300 under the income test. That is not as good as being independent, because the family would get $28,000, but it is still a substantial sum of money bearing in mind that the ramp-down started at $42,000 previously. Even at $138,000 family income those two students, where one is in year 1 and one is in year 2, would have the first-year student get $6,250 because of the various scholarship arrangements that were put in place. They were not in place under the old arrangements. The second-year student would get $3,250 plus a small youth allowance. But even a dollar youth allowance allows you access to the Start-Up and Commonwealth scholarships. So even at that level that family would receive about $10,000 assistance by way of youth allowance based on income. The cut-off level is actually $139,000.

I raise those issues because a lot of parents out there think the only way to get youth allowance is through the independence test—the gap year plus the 30 hours a week on average and all the things that we are talking about in this piece of legislation. So we are very supportive of youth allowance, there is no doubt about that. There is a deal that has been done. It is not a review; it is an arrangement. It will happen; there is no doubt about that.

The other point that we have to be serious about is the constitutional issue. I am as emotive about youth allowance as anybody else in this room, but we have to have a parliament that can actually function. I congratulate the senator for bringing this bill to the parliament because it has highlighted an issue that will now be addressed. The crossbenchers have been very active over the last few months on that particular issue. That is a good thing and it will be addressed as of January next year.

I have sought independent legal advice. I think anybody who has taken the time to get some independent constitutional advice on this would see and there is no doubt in my mind, contrary to what the Senate have said—and they can say what they feel; I do not have a problem with that—that under sections 53 and 56 of the Constitution this bill is not a legal entity in terms of the capacity to deal with it in the House of Representatives. In this hung parliament, I signed a document that guaranteed supply to the government. Supply is the budget bills. If we go down this route, we are going to start to develop an arrangement which allows any of us to bring in a money bill, which I have a no doubt that this is in that it appropriates money not from the education infrastructure fund but from the social security administrative standing fund. It is an appropriation bill in any language.

If it is an appropriation bill, I would accept the advice of the clerks. I think all of us have the highest regard for the clerks in this parliament. We might question the Speaker from time to time. I do not terribly often, irrespective of which side of the parliament the Speaker is from. I think I have once. We must respect the judgment and the knowledge of the clerks in terms of where we sit in the House of Representatives. I have also sought other independent constitutional legal advice and it indicates to me at least that there are some issues here. This means of introducing legislation through the Senate and appropriating money from existing funds is inappropriate. What do we do about that? What have the crossbenchers done about it? We have attempted to recognise that there are these two issues, which are different issues.

One is a vehicle to achieve an outcome which Senator Nash should be respected and praised for. It is an outcome that should have been achieved a year or more ago, whenever the legislation came to the parliament. Now we find that, if in fact this bill did get up, it would be unconstitutional and the government would have no recourse other than to advise the Governor-General not to endorse it. So nothing would happen to the substantive issue that we are trying to achieve here in getting a better outcome for students in inner-regional areas. The way to overcome that particular problem is to come up with a solution that addresses the substantive issue. That is being done in conjunction with negotiations with the government and will come into play, as the member for Lyne said, from 1 July and will then be implemented on 1 January next year. That is a good outcome for what I think most of us are trying to achieve.

The other outcome is to go through the antics of this constitutional challenge arrangement about whether it is an appropriation bill from a standing fund ,and whether the Senate can introduce a private members’ bill that appropriates money, including the whole argument about whether it is money because the word ‘appropriation’ has not been mentioned in the bill. I think we have to go past that and recognise that it is an issue, maybe it is something that needs to be sorted out in a legalistic sense on another occasion, and distance the two issues from each other. We get the best of both worlds in a sense. We have stability in the way our system works. In theory—and I know the member for Sturt would not go anywhere near this particular example that I am about to talk about—you could run a political campaign based on waste and mismanagement and deficit budgeting, create the deficit and the waste and then accuse the government of a particular agenda.

Particularly in a hung parliament I think we all have some degree of financial responsibility. If we start this merry-go-round going—and I know it is a great issue—we can create chaos in terms of the economic circumstances in which we live and that can have ramifications far beyond university students into interest rates and a whole range of economic parameters that exist. I will be supporting the government on this particular legislation. I am proud to have been involved with my crossbench colleagues who have been dealing with this issue for some time now. I am proud of the arrangements that we have been able to negotiate within the parameters of appropriation and the parliamentary process to achieve a much better outcome for country students in the inner regional areas.