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Monday, 10 November 2008
Page: 10338


Mr CRAIG THOMSON (7:41 PM) —I rise to support the Tax Laws Amendment (Education Refund) Bill 2008. The bill will provide extra assistance to families to meet the costs of educating their children. This government proposes to introduce a 50 per cent education tax refund aimed at assisting families with children undertaking primary or secondary school studies to meet the costs of school education through assistance with certain education expenses.

You cannot talk about this piece of legislation in isolation—without talking about the education revolution. I want to spend a little bit of time talking about that and the alternative policies that were put by the former government. In last year’s election campaign the education revolution featured very prominently, with our now Prime Minister and all Labor candidates reaching a contract with the voting public of Australia. The people of Australia, including those on the Central Coast, knew that while our schools were good they could be doing better. People were fed up with our schools and our kids being used as political footballs in a corrosive blame game between the federal and state governments. We had a Liberal federal government at the time that had raised its hands in surrender over reforming our creaking, dated education system. They had gone down the easy road, opting to write media releases blaming state governments rather than embarking on any real reform in educational policies.

We had a lot of talk through the years of the Howard government but precious little action on education direction. The government did not strike up a national conversation about how our schools would teach children in a digital world or about the fact that Australia was slipping substantially in world standards in maths and science and that funding was not giving all Australian kids a fair go. In education the only reforms the Liberal Party seemed interested in were the so-called culture war issues. Instead of addressing a brain drain that was seeing our brightest go overseas and add to other countries’ economies and instead of properly resourcing our tertiary education systems to give our kids a competitive advantage in a globalised world, the Liberals shirked these challenges and instead reverted to their obsessions from their Young Liberals days—like voluntary student unionism and ideological positioning on how history is taught. In fact, the major contribution that the Liberal Party made to education in primary schools was in insisting that they had flagpoles. This is a government that was there for 12 years, and that was their contribution to the education debate!

Not surprisingly, due to their inaction, Australia was falling further behind in world education standards. The former government did an incredible disservice to a generation of young people and to our nation. Our scorecard during their term in office was nothing short of embarrassing. We were ranked 18th in terms of percentage of gross domestic product invested in education. Australian maths and science was ranked 29th in the world. Public investment in universities fell by seven per cent during the Howard years compared with an OECD average of a 48 per cent increase.

Imagine, for a second, instead of gold, silver and bronze medals, that the very best swimmers in the country were only reaching 18th or 29th in the Olympics. Australians would be outraged—and rightly so. We would demand that sports departments invest more in swimming programs from the earliest years. We would demand that our children be encouraged to become the best swimmers so that that would be a matter of national pride. We would not allow ourselves to lose a competitive advantage in swimming and slip behind the US, China and—God forbid!—the United Kingdom. Similarly, Australians are not happy with the way things are going in schools. They may not be worried because of statistics or because of any particular data, but when I speak to mums and dads in my electorate they tell me that more should and must be done.

In 2007 Kevin Rudd brought change to a debate that had been stale and too obsessed with ideological positions rather than with what was in the best interests of our kids and our nation. The Labor Party gave the common-sense argument that there is an undeniable link between the strength of our economy and the strength of our educational systems. In a time of greater economic uncertainty and upheaval it has become clearer that Australia must make real reforms to our education system.

We have promised to improve access to early childhood education; to ensure that our schools focus on achieving higher standards, greater accountability and better results; and to invest up to $1.5 million for high schools to create trade training centres in all of Australia’s 2,650 secondary schools and up to $1 million per high school to allow every Australian student in years 9 to 11 to have access to their own school computer, with the aim of lifting school retention rates from 75 per cent to 90 per cent by 2020.

Nothing strikes a chord more in my electorate than the issue of retention rates. In the electorate of Dobell, retention rates sit at a dismal 44.3 per cent. We are just over 30 per cent behind the national average, let alone the 90 per cent. What parents in my electorate are telling me is that without proper investment in education the kids from Dobell are not going to get an even chance or have the same opportunities as kids from richer areas. Therefore, keeping them in school is absolutely vital and that is one of the key parts of this education revolution.

We have also invested over $1 billion in providing an additional 450 skilled training places over the next four years to help lift the productive capacity of the Australian economy and fight inflation. We have encouraged students to study and teach maths and science by halving their HECS and halving it again if they work in those fields after graduation. And, to keep our best and brightest in Australia, we have doubled to 88,000 the number of undergraduate students receiving a Commonwealth learning scholarship and provided 1,000 new Future Fellowships for mid-career researchers.

In the broadest terms, we believe that the higher levels of knowledge, education and skills right across our population will lead to higher productivity, prosperity and social progress. It is a belief backed up by evidence. Figures from credible world organisations such as the OECD have shown a strong correlation between school completion and higher per capita gross domestic product. The current economic boom may be in the minerals and mining area, but we believe the next one will be built on our knowledge and skills—but only if we increase investments and ensure that investment is well directed.

As I have touched on, the government was elected last year with a central pledge to create an education revolution by raising investment, lifting standards and insisting on rigour from early years to PhD programs. The federal budget earlier this year delivered on those promises. The government’s major commitments comprise an unprecedented $19.3 billion in new investments to create an education revolution that aims to secure our economic future and create an inclusive society.

It is true that Australia ranks highly in terms of test results, but we can and should do better. Worryingly, there is evidence of slippage in our performance at a time when we know that standing still is equal to falling behind. One of the ways we can avoid this is by improving equity in relation to education. The best education systems leave no-one behind. If we continue with an education system that leaves people behind then the children of Dobell are doomed to the sorts of low-socioeconomic jobs that we currently have in my electorate. An education revolution is vital for seats like Dobell.

We need to recognise failure and address it. We need to have a similar psychology towards underperformance in our education and training systems. In other words, we must refuse to accept that low socioeconomic status makes it okay for poorer children to fail at school. The answer is not simple. While higher levels of investment in struggling schools and low-socioeconomic school communities will help, that is not the whole answer. A whole suite of solutions is required—most importantly, investing in early learning, accelerating literacy and numeracy programs, attracting high-achieving graduates to teaching, rewarding quality teaching and arming teachers with an improved national curriculum which provides more effective classroom instruction methods, better facilities and good school leadership.

According to last year’s It’s crunch time report by the Dusseldorp Skills Forum, around half a million Australians between the ages of 15 and 24 are neither in full-time work nor in full-time education. Every year they are joined by another 45,000 to 50,000 early school leavers who should be on the path to becoming skilled tradespeople, paraprofessionals and professionals but who are ending up drifting through casual jobs, often unable to attract a partner or have a supportive network of friends. These young people will not be in a position to buy a home. We know that this work and personal insecurity contribute to homelessness, substance abuse and other tragedies for the individuals involved. Our society as a whole is the loser.

The imperative for getting this right is moral and economic. It has been estimated that the failure of young people to make a smooth transition to the world of work is costing our economy some $1.3 billion per year, and the cost of failure is only going to increase if we do nothing. In the modern economy we simply cannot afford to have around one in five young people not contributing. On the Central Coast, in my electorate, we have just over 20 per cent youth unemployment. We have over seven per cent unemployment there already. Clearly, this is linked to the fact that we have only 44.3 per cent of our students going on from year 10 to year 12.

Fewer skilled workers as a proportion of an ageing population in a knowledge and skill intensive economy will mean declining national productivity. The benefits from success, however, will be substantial. Access Economics has estimated that increasing the proportion of young people completing school or an apprenticeship to 90 per cent would boost annual GDP by 1.1 per cent by 2040—$9.2 billion, or $500 for every household in the country.

We need to start from the position that it is simply unacceptable for teenagers not to have the life and work skills necessary for getting and holding a job. Dropping out or being left behind cannot be an option. So what is the answer? Ultimately it is to keep more young people engaged in education and training to enable them to gain a post-secondary qualification. Today there are five million working aged Australians without a qualification at certificate III level or above.

Some critics have argued that education and training rarely helps people on welfare find jobs and that all we have to do is lower the minimum wage. They are wrong. We saw that type of approach adopted by the former government in their approach to industrial relations and the dreaded Work Choices legislation. We know that at age 24 only 68 per cent of early school leavers are in employment or higher education and training compared to 90 per cent of those with year 12 or its equivalent. This higher level of unemployment for those without year 12 or its equivalent continues throughout life. This is why, through COAG, we have adopted the goal of 90 per cent year 12 attainment by 2020.

The starting point to improving transition is coming to grips with the pattern of change in the economy and pinpointing where the new jobs are emerging. To guide us through this we have established a new body, Skills Australia, and reinvigorated existing industry skills councils. To help us meet the demand they identify for non-professional skills, we are significantly increasing the nation’s trade training effort, including by providing $2.5 billion to existing trade training centres in our secondary schools with facilities that meet industry standards in both traditional and emerging industries and 630,000 new training places, including 85,000 new apprenticeships, with the majority at the crucial certificate III and higher levels. Creating pathways to these training places and professions begins with giving every young person a firm foundation of key learning skills like literacy and numeracy, information and communication technology use and a broad knowledge base across key academic disciplines from maths and science to literature, history and geography.

But, to make the transition to post compulsory education and the world of work, students also need direction, motivation and skills. For that reason, we are supporting a range of initiatives, including $5 billion over four years to encourage mentors for students, $84 million to enable interested secondary school students participating in vocational education and training to access one day a week on the job training for 20 weeks a year, and a job ready certificate for those students to ensure their training includes a range of employable skills that will enable them to move into the workforce. Providing these additional programs will go some way to making a difference, but we also recognise the need to build capacity in the careers advice sector. Over time, we expect these measures to help lower school dropout rates.

Today a number of simultaneous facts—like severe skills shortages, our ageing population and the growth in importance of higher level skills and knowledge based work—mean that the days of turning a blind eye to failure at the bottom are over. The Rudd government is determined to do something about it. We are investing in early learning, improving teaching in our schools, raising standards overall and assisting young people make the transition to adulthood by helping them find a pathway to post compulsory education and employment.

Any help that can be offered to encourage Australians to better educate their children is most welcome, particularly in times of tough financial pressures. A key part of the education revolution is helping parents meet the everyday costs of their children’s education. That is why the budget included $4.4 billion to create the new education tax refund which is proposed in this bill. The education tax refund is a refundable tax offset of 50 per cent of eligible education expenses for children undertaking primary and secondary school studies. About 1.3 million families with 2.7 million students will be eligible for the refund.

Let us recap how Australian families stand to benefit from these changes. Under the plan, eligible families will be able to claim 50 per cent of eligible education expenses—up to $750 for each child undertaking primary school—to a maximum tax offset of $375 per child per year. For children undertaking secondary school education, families will be able to claim 50 per cent of their eligible expenses—up to $1,500 per child—to get a maximum tax offset of $750 per child per year. Eligible expenses for the purposes of the education tax refund are laptops, home computers, printers, paper, educational software, school textbooks and associated materials and trade tools. In addition, the expenses of establishing and maintaining a home internet connection are also included.

The refund will apply to eligible expenses incurred from 1 July 2008. Those eligible for the education tax refund need to start keeping receipts to allow them to claim the tax offset in their 2008-09 income tax return from 1 July 2009. Those not required to lodge an income tax return will be able to access their entitlements to the offset through the Australian Taxation Office by lodging a separate form at the end of the 2008-09 financial year. In addition, consequential amendments will be made to allow effective data sharing about education tax refund recipients between Centrelink and the Australian Taxation Office to enable the ATO to administer and monitor the take-up of the education tax refunds.

Let me remind the House that, for Labor, better education is the cornerstone of a decent society. Education increases productivity and participation. It builds prosperity and it also offers the hope of breaking the intergenerational cycle of poverty. While our predecessors spoke of improving Australia’s education system, we are getting on with the job of real education reform. Part of that reform is to help families better meet the costs of educating their children. That is what this bill does. That is why I support it and commend it to the House.