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Monday, 10 November 2008
Page: 10311

Mr COMBET (Parliamentary Secretary for Defence Procurement) (5:30 PM) —The Tax Laws Amendment (Education Refund) Bill 2008 will help to reduce significantly the cost of education for working families. It will also help to encourage investment by parents in school equipment for their children’s education. That, of course, means an investment in their future. Improving the education system is essential to improving the economic and social wellbeing of our country.

Before the last election Labor committed to implementing an education revolution, due to the poor performance of the previous government in this area and the long-term benefits of improving educational outcomes. Under the previous government, Australia’s investment in education was equal to 5.8 per cent of GDP. This placed us behind 17 other OECD economies in our level of investment in this area. Even worse, investment in early childhood education was just 0.1 per cent of GDP compared to an OECD average of 0.5 per cent. What a dismal performance by the previous government in that area! We were also falling behind our competitors, evidenced by the World Economic Forum’s findings that our science and maths education ranked only 29th in the world, behind countries like Singapore, France, India, the Czech Republic and Tunisia.

These results, bad enough on their own, are worse when you consider the economic and social benefits that education can have. Research has demonstrated that improvements in education have a direct impact on productivity and economic growth levels—and, of course, that is perfectly self-evident. But, as evidence, it has been estimated by Access Economics that increasing the workforce’s level of education by only 0.15 years would boost workforce-wide productivity by 0.62 per cent. It would also boost workforce participation by 0.48 per cent and economic growth by 1.1 per cent by 2040. Research by ANU economist Steve Dowrick has also found that an additional year’s schooling could boost productivity and economic growth by 0.3 per cent.

OECD research on education in 2006 demonstrated that, if the average level of education of the working-age population was increased by one year, the economy would be three to six per cent larger and the growth rate of the economy would be up to one per cent higher. As further evidence, a 2004 international study into literacy scores, human capital and growth across 14 OECD countries found that countries able to attain literacy scores one per cent higher than the international average will achieve living standards measured by GDP per capita that are 1.5 per cent higher than other countries. That is graphic evidence from a number of research studies of the importance of education in improving economic activity, productivity and therefore social outcomes.

The business community has also long recognised the value of education to the performance of the economy. In a report in 2006, the Business Council of Australia stated:

People with higher levels of educational attainment and skills have higher participation rates and tend to stay in the workforce for longer. Raising the average level of education attainment (and ongoing skill development) can also deliver higher levels of productivity.

Education also helps to create other social benefits. US academic Robert Putnam has conducted research into this area in particular and has shown that societies with a strong commitment to education can also enjoy higher levels of civic participation in community groups, greater social cohesion and integration, lower levels of crime and disadvantage, and a more equitable and trusting society. So there is ample evidence of the importance of education in economic and social outcomes and, in particular, in the pursuit of social justice. That is why the Rudd government has made education a central element of its program in government. It realises the economic and social importance of education and that is why the government is committed to a revolution in education.

In the May budget the government established the Education Investment Fund, which absorbed the earlier Higher Education Endowment Fund. The fund is budgeted to receive an initial allocation of around $11 billion to be spent on higher education and vocational education and training needs. This is an extremely important proposed investment, for the reasons I have described. In addition to this, the budget also provided $5.9 billion over five years for areas covering early childhood education, schools, higher education, skills and workforce development.

In the area of early childhood education, which is one of the areas I identified earlier as being critical to economic and social development, the budget contained the following initiatives: $534 million over five years to provide universal access to preschool, 15 hours per week for 40 weeks per year, for all four-year-olds by 2013; and $337 million to further improve quality of, and access to, early childhood education and care, particularly for disadvantaged children. These are Labor initiatives consistent with Labor values for social equity.

For schools, the budget provided $1.2 billion over five years for the digital education revolution to deliver computers and communications technologies to all year 9 to 12 students. To digress for a moment, in my own electorate, of Charlton this initiative is extremely important. Just last week I visited St Paul’s High School, a Catholic school in the electorate where about 217 computers are well in the process of being delivered. It has driven improved internet access and a wireless broadband service in the school, changed the shape and function of the library at the school and is demonstrably improving the delivery of education to students and their access to research tools. This initiative alone, in delivering computers to all year 9 to 12 students, will revolutionise significant approaches to education throughout our country.

The budget also delivered a number of other things consistent with the objectives of the government. This included: $2.5 billion over 10 years for trade training centres in schools; $577 million to improve literacy and numeracy outcomes for students; $62 million over three years for the National Asian Languages and Studies in Schools Program; and $20 million to establish a National Curriculum Board. All of these initiatives in schools are designed to help assist in lifting the year 12 or equivalent attainment rate—that is, the participation rate of students in year 12 or its equivalent—to 90 per cent by 2020. I recall throughout the Hawke and Keating periods in government, when the lifting of the participation rate of students to year 12 was made an objective, what a significant contribution that made to the improvement of educational outcomes in this country. You need to identify these targets in order to try and lift that rate. It is particularly important for a lot of young teenage men in the area that I represent that we get them through to year 12 and improve their educational outcome.

In the area of higher education, the budget provided the following: $500 million to help universities upgrade and maintain teaching, research and other student facilities; and $626 million to reduce the cost of studying maths and science at university and to reduce HECS-HELP repayments for science and maths graduates who undertake work in a related field. Boosting the number of students in maths, engineering and science disciplines at university is critical to our economic future, and the government has targeted this area in an attempt to ensure that we achieve a greater number of graduates. In my own portfolio area of defence procurement, this is the area more than anything else that is restricting the capacity of Australian industry to deliver capabilities for the future. It will be extremely important within the defence industry alone that we address the shortfall of graduates in these disciplines.

In the area of skills and workforce development, the budget included $1.9 billion to deliver up to another 630,000 training places over five years. This was recently augmented in the Economic Security Strategy too, with funding of $187 million to create an additional 56,000 new training places this year. All of these initiatives which I have detailed are helping to lay the foundation for the government’s long-term economic reform agenda through the boosting of education. It should not be said by anyone in the community—and certainly not by those opposite—that the government are not serious about pursuing the education revolution that was part of our election platform.

The education tax refund is another extremely important initiative, particularly for the parents of school-age children. It is the subject of the bill that is before the House. The education tax refund will provide additional relief for families facing rising cost-of-living pressures. Under the plan eligible families will be able to claim a 50 per cent tax refund for up to $750 in educational expenses for each child at primary school. That represents a maximum refund of $375 per child. The second leg of the plan involves a 50 per cent tax refund for up to $1,500 in education expenses for each child at secondary school—a maximum refund of $750 per child.

As the Treasurer outlined in his second reading speech in relation to this bill, eligible expenses will include very important things that are ordinary expenses to support children’s education. They include laptops, home computers, printers, paper, education software for computers, the establishment and maintenance of a home internet connection, school textbooks and associated materials and trade tools. It will also include the purchase, lease, hire or hire-purchase costs of those items. The tax refund will be available to parents who are entitled to family tax benefit part A and have children in primary or high school. It will also be payable to those who would be eligible for family tax benefit part A in respect of a child but for the fact that they or the child are in receipt of another payment such as youth allowance or disability support pension.

The tax refund will apply to eligible expenses that are incurred from 1 July 2008. One of the things that I and, I am sure, other members of the House have been doing is to encourage all eligible parents to save their receipts so that they can claim these expenses when they complete their tax return. Those families who are not required to lodge an income tax return will be able to access their entitlement by filling out a separate form that will be available through the Australian Taxation Office.

This is a significant initiative. It is valued at $4.4 billion and it is estimated that this will affect over 1.3 million families, including 2.7 million students. In my own electorate of Charlton, I know that many families have taken an interest in this initiative. They are working very hard to put their kids through school and they deserve as much assistance with education costs as they can get. Given the socioeconomic standing of many of the families in my electorate, many of them will be eligible to claim the education tax refund. We have made sure that parents, through the schools, are aware of this by ensuring that the parents and citizens groups advertise the education tax refund to all of the parents at each of the primary and secondary schools, and I have been liaising with all of the principals of the schools in my electorate as well.

Recently we have done an electorate-wide mail-out to ensure that people are aware of their entitlement to this and other initiatives that the government has taken, particularly in view of the initiatives announced as part of the economic strategy to combat the effects of the global financial crisis. Given the recent economic events and the budgetary pressures experienced by people with schoolchildren. I know that this is a very welcome initiative in the electorate. I have a very strong belief in the importance of education, and I am very proud to be part of a government that has taken this initiative. I commend the bill to the House.