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Monday, 30 August 2004
Page: 26733

Senator STOTT DESPOJA (9:07 PM) —The incorporated speech read as follows—

I rise to speak on the Family and Community Services and Veterans' Affairs Legislation Amendment (2004 Budget Measures) Bill 2004.

This Bill provides the opportunity to tell the Australian public in the lead up to the election about the Howard Government's commitment to education and, particularly, through the provision of scholarships, to support students during their study.

The Prime Minister said yesterday that we need a good economy so we can spend more on health and education. Well if the economy is supposedly strong now, as Mr Howard keeps telling us, why are thousands of students living well below the poverty line; 70% of students are working around two days a week during the semester, existing student income support arrangements seriously inadequate; and, Government changes to the higher education sector 2005 will shift around $1.2 billion of university costs to students through increased fees over the next four years?

Why did the Prime Minister and the Treasurer also decide to spend $15 billion on tax cuts for high income earners (over 4 years) in the Budget just before ceasing funding for the Educational Textbook Subsidy Scheme, meaning textbook costs have increased by up to 10% since the first of July?

And, even worse, the Opposition who will be campaigning on health and education issues, supported those tax cuts.

I believe the Government, despite its rhetoric, fails to recognise the vital role higher education plays in providing people with the choice to pursue their dreams and make a valuable contribution to society.

The 2004 Budget, and this Bill which proposes the Budget measures, were both prime opportunities for the Government to invest in education. They have failed to take these opportunities and it will be yet another black mark against: the Howard Government's record on higher education.

Apart from providing an opportunity to talk about the Government's appalling record on student income support, this Bill actually gives us a chance to do something about it by expanding the scholarship provisions in the Bill.

As part of the changes to higher education passed last year, full fee-waiver scholarships were no longer counted as income under social security income tests, as were the new Commonwealth Learning Scholarships (CLSs).

As part of the 2004 Budget, Dr Nelson announced that he would exempt all scholarships that partly or fully waive or pay tuition fees from social security income tests. Fee-waiver scholarships are those where course fees are waived by university and Fee-pay scholarships are those where fees are paid on behalf of a student by a third party.

Schedule 1 of this Bill proposes to amend the Social Security Act 1991 and the Veteran's Affairs Act 1986 to this end, costing an estimated $2.7 million in 2004-05, increasing to $8.8 million in 2007-08.

These figures pale into comparison with the tax cuts in the Budget.

It is clear from these policy decisions that Dr Nelson understands the negative effects of supplementary income on student income support payments. By exempting the fee-waiver, fee-pay and Commonwealth Learning Scholarships from the social security income tests, he has removed any effect these scholarships may have on students income support payments.

Dr Nelson's budget media release about exempting the partial fee-waiver and fee-pay scholarships stated, “The Government wants to encourage this support for students. This initiative will ensure that ... these students will receive the full benefit of that support”.

But students will not be encouraged by seeing other students receiving a scholarship and maintaining full income support payments while their own income support is reduced by their non-Government cash scholarship and any attempt to earn more money legitimately results in further reductions in their income support.

The Democrats support the changes to the treatment of scholarships in this Bill, but believe they need to go further. The real funding burden in providing these fee-pay and fee-waiver scholarships will be borne by the universities who have to either fund these scholarships themselves or find someone willing to do so for them. Not only this, but for universities to be eligible for funding through the Higher Education Equity Programme they must, amongst other measures, offer University Equity Scholarships out of their own funds.

Many of the universities which have announced increased HECS fees for 2005, have indicated poor Federal Government funding as the main reason they had to reluctantly increase fees. Through the HECS increases however, many universities have committed to funding numerous scholarships for equity group students, over and above those provided by the Federal Government.

Why should universities be forced—through the possibility of reduced funding—to fund scholarships for students that will in turn reduce the student's reliance on Government income support payments? In effect, this is another backdoor cost-shifting exercise by Mr Howard that, like so many of his other decisions is detrimental for education.

The AVCC in their response to the Higher Education Equity Program review stated, “The AVCC is also concerned that the Government reduces students' income support payments where students receive scholarships from universities. Since the Government is to require universities to offer such scholarships from 2005, it should not be financially advantaged by universities doing so.”

The AVCC also state, “some institutions may prefer ways to provide financial support to students that extend beyond the traditional concept of scholarships.” The tight restrictions on scholarships are discouraging universities from offering scholarships for fear of not sufficiently enhancing the student's life or education.

The AVCC's recommendation on this matter was `... universities' scholarships that provide students with financial support should not be treated as income for the receipt of Government income support benefits”.

The Democrats support the AVCC's view and we will ask the Government to expand the scholarship provisions in this Bill to ease the financial strain on students receiving Austudy who are living 35% below the Henderson poverty line and are not eligible for Rent Assistance.

The Democrats have discussed this proposal with the higher education sector and have received strong support from Vice-Chancellors, students and university staff for our amendments to exempt university equity scholarships from the social security income test.

Both Backing Australia's Future and this year's Budget have failed students from poorer backgrounds. A recent report from The Age newspaper detailed the worsening equity situation over the past eight years of the Howard Government, where there has been a decline in the proportion of poorer students admitted to the `Group of Eight' universities, as well as those participating in `high-end' courses.

Earlier in the year, it was revealed that the participation rates of students from low socioeconomic status backgrounds has remained around 15% for the past decade when we know adequate student income support is one of the best ways of improving this participation rate. These figures show the failure of the Coalition's higher education policy to provide affordable and accessible higher education to all Australians. I think we are fortunate that the figures are not worse considering the Government's record.

The Prime Minister increased the age of independence and tightened the parental income test for income support, pushing students off income support. He closed the Student Financial Supplement Scheme placing an additional burden on those students who were relying on the Scheme to complete their studies. He discontinued the Educational Textbook Subsidy Scheme causing the price of textbooks to increase by up to 10%.

To make things worse, there has been no thorough examination of student income support measures for over ten years. An inquiry into these matters is both crucial and long overdue.

After several years of trying, I am proud that earlier this year I was able to initiate the first Senate inquiry to look solely at the issue of student income support. Evidence submitted to the inquiry so far raises two long standing issues—the impact of students working to support themselves while studying and the impact of those earnings on income support payments from the government.

Many students who work to support themselves at university also qualify for income support from the Government. Estimates of students' living expenses, from the University of Melbourne, show that students on Youth Allowance or Austudy cannot survive without supplementing this income, through paid employment, a loan, a scholarship or other means. However, income support payments are reduced or withdrawn completely when the student, their partner or parents earn over certain amounts of income whether that is income from university discretionary scholarships or employment. For example, students can only earn $118 per week before their Austudy or Youth Allowance is affected.

In general, scholarships are given to talented people to enable them to commit to their studies and develop their talents. While this benefits the individual, it also has a broader purpose which contributes directly to our community. So why then does the Government recognise this benefit by exempting some scholarships from the social security income tests but not all? This situation needs to be addressed urgently and this Bill offers a great opportunity to do this.

I have been working for accessible and equitable education ever since I entered Parliament and I will use the Senate inquiry into student income support measures to uncover more evidence about why the Government continued to avoid the long-standing issue of student income support, after they had clearly identified the problem and push for meaningful reform.

Unlike the Government, the Democrats have long acknowledged the importance of student income support measures in increasing the participation of students from low socioeconomic status backgrounds. Exempting university scholarships from social security income tests would help ease the burden on the many students living below the poverty line.

The Government has not been willing to increase student income support payments, so the very least they can do is allow universities to support disadvantaged students without their income support payments being reduced. The Government and the Opposition (from their preliminary indications that they will not support the Democrats' amendments) have missed a great opportunity to show their commitment to students.

Students should not have to wait until the ALP is in power for delivery on a promise of improved student income support. If the ALP decide today to support the passage of this Bill it will mean that even if they win Government, thousands of students will have to spend at least another year living below the poverty line and losing income support payments when they are granted a university equity scholarship. That is not good enough and I'm sure students won't be happy with this outcome.

I have said repeatedly that education should be based on a student's brains not their bank balance. Excluding students from education because of their socio-economic status is wrong. It is time to do something about it.

Australians looking to attend university in the coming years can not trust Dr Nelson or Mr Howard to keep fees down and bring back education that is accessible for all. They have already shown their preference for tax cuts and defence spending over investing into the future of our country through higher education.

The Democrats will not oppose this Bill but will be seeking to have it amended in the committee stage, to demonstrate that it is always a good time to amend bad policy and to show our commitment to improving student income support.

1 Ensuring fair access: future arrangements for the Higher Education Equity Programme, AVCC, June 2004, p. 12.

2 Ensuring fair access: future arrangements for the Higher Education Equity Programme, AVCC, June 2004, p. 12.

3 Ensuring fair access: future arrangements for the Higher Education Equity Programme, AVCC, June 2004, p. 13.