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Wednesday, 19 May 1993
Page: 816

Senator FAULKNER (Minister for Veterans' Affairs and Minister for Defence Science and Personnel) (11.30 a.m.) —Senator Sowada has moved to disallow a regulation giving effect to a government Budget decision which would increase the minimum payment under Austudy to $1,000 a year; it was previously $250. This is a savings measures and means that students whose allowance would have come to less than $1,000 on the means test taper do not receive any Austudy payment. Some 38,000 students are expected to be affected at an annual saving of $28.8 million.

  However, students in secondary courses would instead be entitled to receive a family payment of $10.35 a week from the Department of Social Security. Affected students in tertiary study would be entitled to an Austudy loan, known as a category 2 supplement, of $2,000. These special loans apply to students who are above the parental income test limit for an Austudy grant but who have a parental income of less than $50,000 a year. These loans require no trade-in of the Austudy grant, unlike the category 1 Austudy supplement, but clearly carry the same very generous interest and repayment provisions as normal Austudy loans.

  The higher minimum payment was one recommendation that was developed as a result of last year's review of Austudy by Dr Bruce Chapman of the Australian National University. The review process involved wide consultation. The Government has adopted most of Dr Chapman's key proposals.

  The basis of the proposal to increase the minimum payment is that a small allowance of less than $20 a week can never be critical to a student's decision to stay in education. The savings from this measure have been put back into Austudy in making improvements in other areas, such as lowering the age of independence.

  In the 1992-93 Budget, the Government made significant improvements to Austudy and Abstudy, which are the major student support schemes. These improvements have provided more generous and flexible support to help alleviate the difficulties faced by many students. In particular, students will benefit from a lowering of the age of independence from 25 years progressively down to 22 years by 1995. In 1993, students will qualify from 24 years of age. For students reaching this age, the parental means test will not apply. In addition, a 20 per cent increase in the personal income test threshold will allow Austudy students to earn up to $6,000 in 1992-93 before affecting their entitlement.

Existing Abstudy cut-off points have also been increased.

  The new voluntary Austudy-Abstudy supplement will give eligible tertiary students the chance to trade in all or part of their grant up to a limit of $2,000 for double the amount of money. This is the category 1 supplement. Certain students who are not eligible for an Austudy or Abstudy allowance may nevertheless be entitled to the category 2 supplement, which I have discussed previously. The supplement is provided at no real rate of interest and is entirely optional.

  Existing allowances are now indexed so that they will keep pace with increases in the cost of living. This has been legislated for in the Student Assistance Act. These changes involved a significant increase in funds available for Austudy and Abstudy to about $1.5 billion in 1992-93. This was due to an estimated increase in the number of beneficiaries from around 510,000 to about 560,000, including those who will benefit from the Austudy-Abstudy supplement.

  Since Austudy was introduced in 1987, the number of students assisted has increased from 224,793 to 458,460 in 1992. In that period, expenditure has risen from approximately $539.8 million to $1,432.9 million. This matter was a Budget decision by the Government and was passed in Parliament in the Budget Bills. The regulation merely gives effect to the Budget decision. I oppose the disallowance motion that has been moved by Senator Sowada.