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Thursday, 11 September 2003
Page: 19828

Mr SWAN (10:09 AM) —The Family and Community Services (Closure of Student Financial Supplement Scheme) Bill 2003 and Student Assistance Amendment Bill 2003 are further examples of why this is a tired and mean-spirited government. That was very much demonstrated in the contribution from the member for Herbert. There were no alternative ideas, no creative contribution, no commitment to students and no commitment to our universities whatsoever. The Family and Community Services (Closure of Student Financial Supplement Scheme) Bill 2003 is a mean-spirited bill because it attempts to close access to the Student Financial Supplement Scheme without any replacement policy. That is the point. We know that there are problems with the supplement, but the government is closing it down and not putting in place any replacement policy for students to bolster their income. This bill will only increase financial pressure on a group of people who are already struggling. It is a tired government because, although the operation of the scheme may need a makeover, this government would rather abandon it completely than think creatively about improving its operations. That sums up the approach of the Howard government: tired and mean-spirited without any innovation or initiative. We need only to look at Minister Vanstone's recent handling of issues like the carer allowance and the ongoing family tax benefit debacle to see further evidence of that. I will expand on those matters later.

I would like to talk briefly about the student loan scheme, which was introduced by Labor in 1993 in response to a need for additional financial support to help students to undertake their studies. It is a voluntary loan product whereby students may bolster their income to help them better meet the costs of living and studying. There are two different types of supplement loan, depending on whether the student is in receipt of an income support payment, such as youth allowance or Austudy, or none at all. Those receiving an income support payment may trade in part of their entitlement in order to receive a financial supplement of twice the amount. This supplement is a loan that becomes repayable—albeit with very flexible repayment terms. Those who do not receive an income support payment but who do meet other means test requirements may obtain a supplement of up to $2,000, which is repayable—again, with very flexible repayment terms.

The scheme has proved to be very popular since its introduction, with between 40,000 and 60,000 students taking up the supplement each year. It is not for everyone, but clearly it serves a useful purpose for many students who require a greater income than the basic youth allowance or Austudy payment provides. In particular, it is a useful resource for those students who do not necessarily want to undertake unreasonable amounts of part-time work in order to keep their heads above water. Discussion about the merit of the scheme essentially falls into two broad areas. The first issue is the adequacy or inadequacy of income support payments and thus the need for some students to take out a supplement loan to meet their financial shortfalls. The second issue relates to the design of the scheme and the information provided to students who are considering taking out a supplement loan.

We all know that being a student is not easy, although I do not think the member for Herbert understands that. The current range of income support payments for students is not especially generous, particularly if you are aged under 25 and your payment depends on a means test of your parents' income. The parental means test for the youth allowance is punitive and restricts payments to students whether or not parents actually provide some financial assistance to them. We would all be aware that when the government introduced the youth allowance it increased the age of independence from 22 to 25. It is in circumstances like this that students often need to consider taking out a supplement loan. Accordingly, in its higher education policy, Aim Higher, Labor has committed to reducing the age of independence to 23. This will provide a substantial boost to many students and will mean that many may not have to consider a supplement loan in the first place. Many students would like the age of independence to be lower again. Whilst it does become progressively more costly to do that, Labor will consider reducing it further as the budget allows.

In addition to lowering the age of independence, Labor has also committed to extending rent assistance to Austudy recipients. This move will greatly assist older students who rent. I would challenge the government to dispute its merit. Despite these two measures and many other improvements that may be made to basic income support, there will always be a need for some students to obtain additional financial support. That is why Labor argues that the supplement still serves a useful purpose.

The financial supplement is not for everyone. Unfortunately, some students are not fully informed about the nature of the product before they take out a supplement loan. This is due in part to the poor materials provided by Centrelink. In particular, some students do not necessarily understand the impact of the trade-in amount and the fact that what was once an entitlement becomes a repayable loan. The booklet for the supplement makes the claim that the loan is interest-free. This is somewhat misleading, as, in the instance of category 1 students, the supplement amount repayable is twice the net amount that the scheme provides.

Further, the loan amount is indexed to CPI. Commercial loan products effectively factor indexation into their gross interest rate. In the case of the supplement loan, the effective interest rate over five years is in the order of 16 per cent per annum. This may be reduced if voluntary payments, which attract a repayment bonus, are made. Despite this, the supplement loan still compares favourably to commercial loans, particularly in light of the flexible repayment terms. Nevertheless, the material Centrelink provides to those seeking a supplement loan ought to be clearer and express in clear terms how the supplement loan compares to commercial loan products and what effective interest rates may apply. Accordingly, Labor has moved some amendments to address these concerns.

The government has argued that the scheme should be closed because many loans are not being repaid. Unfortunately, the government's assertions are very shaky. Information provided to Labor about loan acceptances and amounts outstanding indicates that repayments in excess of $500 million have been made. These repayments have resulted in the total loans outstanding being worth some $467 million less than the loan amounts issued. In other words, almost 25 per cent of the value of all loans issued has been repaid. This is equivalent to almost 50 per cent of the value of all loans which have matured. This does not point to a scheme that is under collapse. Nevertheless, improvements could be made.

Rather than axing the scheme, why does the government not reform the structure of the scheme to change the ratio of the trade-in to supplement amount so that it is more favourable and improves incentives for voluntary repayment? Unfortunately, these tasks are far beyond this tired and mean-spirited government which simply has not bothered to examine such changes. This is not surprising, I guess, given that Minister Vanstone is in charge of this portfolio. We have seen Minister Vanstone lurch from crisis to crisis ever since she was installed as Minister for Family and Community Services. Upon coming to the job, she said she would bring to the job the same vigour she used in her old job as minister for customs and excise. She is fond of blowing the trumpet about welfare cheats but she has shown no skill whatsoever in administering this very sensitive portfolio. For example, hardworking mums and dads now have debts of almost $1.2 billion in family tax benefits under her flawed family payments system yet she will not close loopholes that allow millionaires to claim these benefits. She is not concerned about it. This hard-hearted minister has not thought twice about stripping the carer allowance from some 30,000 families who are looking after kids with serious illnesses and disabilities.

I continue to ask myself what makes this minister tick. I found some answers in a feature article in the Age on 30 August written by Frank Robson. I would recommend this as compulsory reading for all members of parliament. It really does say something about the nature of this minister and the nature of her policy approach. In this piece, Frank Robson compares the minister to the queen in Alice in Wonderland, describing her as both `jolly and menacing'. In Alice in Wonderland, the Queen of Hearts is out there screeching `off with their heads' to anyone who displeases her. This is the same approach that Senator Vanstone takes to charities, it is the same approach she takes to parents who are caring for disabled children and the same approach she takes to anyone, for that matter, who seeks to defend themselves against her cruel onslaught. Frank Robson goes on to describe the Minister as `Roseanne the Rottweiler'. This is a woman who never forgives. There is a real insight into her policy approach in this article, where she talks about how she deals with her enemies. The article says:

Expanding on—

her approach—

at lunch, Vanstone admits that she never forgives. “But you don't have to cross the street to fix someone up. You just keep it in your memory ... and one day your [enemy] will lay open his belly, waiting for it to happen.”

That is the approach of Minister Vanstone. She never forgives and she is out there fixing up anyone with the temerity to oppose her mean-spirited policies. She has been out there stabbing the carers, the aged and the disabled. There is a consistent pattern here.

The interview that produced this article was conducted over five hours at lunch somewhere in Adelaide. Mr Robson said:

Lunch lasts almost five hours, and—far from holding back—Vanstone seems keen to confirm her reputation for being able to drink just about anyone under the table.

This minister is, of course, well known for her love of red wine. While she is taking $87 a fortnight off 30,000 families who are caring for profoundly disabled children or children who are seriously ill, off she goes to lunch for five hours. Let us say that would be a bottle of wine an hour—five bottles for five hours. I was down at Manuka the other day where I checked out a good wine, Elderton Command Shiraz, which costs $79 a bottle. Five times that amount is about $400. That is roughly what the minister pays a person on a disability pension per fortnight. So we have a minister who spends more on red wine at lunch than she pays a pensioner in two weeks.

Mr Ruddock —Mr Speaker, I rise on a point of order. I do not wish to draw undue attention to the comments that the former shadow minister is making but I think it is a reflection upon a senatorial colleague. I think the comments are unreasonable and that they are traducing a person's reputation in a way that is certainly not related to the substance of the bill. I would ask that you direct the member to return to the content of the bill rather than traduce people's personalities.

The DEPUTY SPEAKER (Mr Jenkins)—On the point of order, I am sure that the honourable member for Lilley is aware of the requirement to have his comments couched in a manner that is not unparliamentary and to be careful that he does not, to use the minister's words, in any way traduce the reputation of the minister. I will listen carefully to the honourable member for Lilley and I am sure that he will continue to be relevant to both the bill and the second reading amendment.

Mr SWAN —Thank you, Mr Deputy Speaker. I am merely quoting the minister's own words in a discussion that she had over lunch. I am doing that in the context of the government's initiative in this bill to take away a supplement loan from struggling students. I am pointing out that her extravagant lifestyle and expenditure are completely at odds with the practice of public policy when it comes to taking $87 a fortnight off parents who are caring for disabled children, or taking away a supplement loan for struggling students.

In this profile piece, the author, Frank Robson, chronicles this double standard very clearly. I was simply pointing out that she spent about the same amount on red wine at that lunch as she provides to a pensioner in a fortnight. It is a double standard. It is not my problem that the minister cannot remember how many bottles of red wine she had at lunch.

The DEPUTY SPEAKER —Order! The honourable member will be very careful.

Mr SWAN —If you had one an hour, it would be five. That is about $395 in terms of Elderton Command Shiraz. The point is this: the minister is out there saying to struggling students and parents looking after disabled children that they can just go and eat cake. She has absolutely no idea about the daily struggles of families—people who are labouring under her family payment debt, people who are out there struggling to make ends meet—none whatsoever.

This article goes to the heart of the minister's policy approach, because it demonstrates how hard-hearted the minister is when it comes to vulnerable people in our community and that the minister has not got a shred of compassion for those people that are finding it hard to get by. She is quite happy to put her dog, Freddy, the weimaraner, into the Commonwealth car. She is quite happy to live high when it comes to her own lifestyle but not to provide some basic level of support for struggling Australians. It is just a pity that she cannot muster some sort of support for ordinary people in our community.

Because of this bill, students will suffer. There will be fewer options for financial support, and many students have contacted me to say that, as a result, many will abandon their study completely. We have put forward a credible alternative. Only modest changes need to be made to the supplement to improve its fairness. We have also put forward our proposals to reduce the age of independence and on the need to pay rent assistance to Austudy recipients. These are all positive measures and they contrast with the mean-spirited, tired and lazy approach of this government and, particularly, the minister responsible for this portfolio, Senator Vanstone.

She is quite happy to take away $87 a fortnight, or $2,260 a year, when it comes to the carer allowance, which has been paid to people who have not been blessed by Lady Luck in the lotto of life. Contrast that with a Prime Minister who spends $10,000 a night for a hotel in Rome, who has stocked up the Lodge with wine to the tune of $120,000 of the good stuff, who struts around the world spending extravagantly. And we come in here and constantly deal with bills which are taking away small amounts of money from people in substantial need.

This is a government that always finds it easy to spend money when it comes to the military, but it cannot find a little bit of extra money for people caring for disabled kids, for example. There was $300 million for the Solomons intervention and half a billion dollars for Iraq, but there is not $44 a week for the carer allowance. The point is that this government remains mean and tricky. When Shane Stone penned that famous memo about this government—`mean and tricky'—a more honest assessment was never given. It is mean and tricky. A leopard never changes its spots; this government remains mean and tricky, and it is increasingly heartless. That is what is at the heart of its social policy approach, whether we are dealing with income support, students or health. That is why the extravagance of this minister in her own personal lifestyle, as documented in the article by Frank Robson, just shows not only how out of touch she is with the daily struggle of Australians but also how mean and cold-hearted this government is.