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Thursday, 26 June 2003
Page: 17636

Mr ANTHONY (Minister for Children and Youth Affairs) (10:37 AM) —I move:

That this bill be now read a second time.

The Student Financial Supplement Scheme is a voluntary loan scheme whereby eligible tertiary students trade in income support in return for a loan, on the basis of a $1 trade for a $2 loan. The money traded in becomes part of the loan, all of which is repayable.

The Student Financial Supplement Scheme is not delivering good outcomes for students or Australian taxpayers.

The bill amends the Student Assistance Act 1973 to reflect the government's decision to close the Student Financial Supplement Scheme on and from 1 January 2004 in respect of ABSTUDY students while a separate bill will amend the Social Security Act 1991 to close the scheme for other tertiary students.

The closure of the Student Financial Supplement Scheme is in response to increasing levels of bad and doubtful debt and reduced take-up of loans. The Australian Government Actuary has estimated that some 84 per cent of total loans may never be repaid.

The Student Financial Supplement Scheme was introduced in a climate of high youth unemployment, high interest rates and when few commercial loan packages were available to students.

The take-up of the Student Financial Supplement Scheme has declined over the years and since 1 January 2000, rent assistance has been payable for full-time students in receipt of the Abstudy Living Allowance.

The repayment provisions of the Student Financial Supplement Scheme will continue to apply.

The bill also makes a minor technical amendment to the act by inserting an express provision to permit the incorporation of an instrument `as in force or existing from time to time' for the purposes of section 49A of the Acts Interpretation Act 1901. This will eliminate the need to make new regulations under the act whenever guidelines for the non-statutory Abstudy and Assistance for Isolated Children schemes are altered.

I commend the bill to the House and I present the explanatory memorandum to the bill.

Debate (on motion by Mr Snowdon) adjourned.