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Wednesday, 26 November 2003
Page: 17993


Senator CROSSIN (9:31 AM) —In my opening comments last night, I made the point that the Family and Community Services (Closure of Student Financial Supplement Scheme) Bill 2003 must not be supported, because of the reliance that students have on the financial assistance that the student financial supplement loan provides to them. As I said last night, our deputy leader, Jenny Macklin, made it extremely clear, when she was talking on this bill in the House of Representatives, that it is important that the government do more for students rather than less. This bill, of course, is doing much less for students, by removing the availability of this support.

Our amendments, firstly, will ensure that students have the option to take out a loan under the Student Financial Supplement Scheme and that students are fully informed of the conditions of that loan. Secondly, our amendments will extend rent assistance to Austudy recipients. Thirdly, our amendments will lower the age of independence from 25 to 23. We put forward these proposals, which will see additional support provided to students, to ease the burden and ensure that attending university is more appealing, more rewarding and much more possible for those students who are under significant financial pressure. That is because we believe that, when you are going to university, the aim should be to concentrate on your course and on your study—to put all your energies into completing that course rather than into simply wondering how you are going to survive on a day-to-day basis.

Since the introduction of the Student Financial Supplement Scheme, between 40,000 and 60,000 students have taken up the supplement each year. Unfortunately, some students are not fully informed about the nature of the scheme before they take out a supplement loan. I believe that this is partly due to the poor materials that are provided by this government. In particular, some students do not necessarily understand the impact of the trade-in amount and the fact that what was previously 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 the loan amount is indexed to the CPI, which commercial loan products effectively factor into their gross interest rates. In the case of the supplement loan, the effective interest rate over five years is in the order of 16 per cent per year.

It has recently come to light that the government intends to scrap the student financial supplement loan, regardless of whether or not this bill is passed. In fact, I have had a number of people ring my office to say that they have been informed by Centrelink that, regardless of whether or not this bill is passed, the government simply has no intention of renewing the contract with the Commonwealth Bank on 1 January. Apparently, Centrelink staff are already informing students that the loan will not be available to them next year. No doubt this is causing a lot of anxiety for students who rely on the extra money to survive while they are studying at university or TAFE. The government has already shown utter disregard for the 40,000 students who currently rely on the Student Financial Supplement Scheme every year.

This government is so out of touch with the financial burden placed on students that it has not only decided to scrap the scheme undemocratically but also failed to provide students with any other viable option to ensure that they are able to continue studying. It has also failed to ensure that future students are not deterred from enrolling in further education in the first place. The minister for youth affairs boasted several weeks ago to the Canberra Times that, even if the legislation were not passed in the Senate, the government would simply ensure that the contract with the Commonwealth Bank to provide the loan to students would not be renewed or renegotiated. It is obvious from the statements made by the minister and the contents of this bill that not only does the Howard government have little regard or respect for our legislative process but also, as highlighted in the government's proposed higher education reforms, this government has limited understanding of the value of higher education to society and of the financial burden already placed on students attending university and TAFE.

The arguments that have been put forward by the Howard government—and, particularly, by Minister Anthony—to abolish the student loan scheme are not only factually incorrect but also extremely inconsistent and hypocritical. The minister has constantly stated that students with student loan debt of $25,000, for example, on an income of $35,000 per annum will take 40 years to repay their loans. That was quoted in the Australian on 30 April this year. It is nice to know that the minister is concerned about student debt when he is pushing to abolish this voluntary and optional scheme. But, when it comes to the Howard government's Nelson reforms to higher education, the minister does not seem so worried about the $40,000, $80,000 or even $150,000 debts that students will incur as a result of these reforms. How long would it take for students to repay those debts, Minister? Going by the minister's calculations for a debt of $25,000, I am assuming that it would take the average student around four lifetimes to repay the debts that would be incurred because the Howard government wants a user-pays system of higher education in this country.

The destruction of the higher education system in Australia by the Howard government has resulted in the serious erosion of equal opportunity in this country when it comes to education. A survey conducted by the Department of Education, Science and Training in 2002, for example, found substantial gender differences in high school students' assessments of the impact of the cost of a university education. The report found that an alarming 41 per cent of lower socioeconomic status females believed costs might make university impossible for them compared with 34 per cent of lower socioeconomic status males. Similarly, 43 per cent of females from lower socioeconomic backgrounds who were surveyed believed their families could not afford the cost of supporting them through university.

Another study of vocational education and training courses found that female enrolment in these courses was much more sensitive to the availability of the resources for self-financing. On the basis of a number of studies in this area, it may be inferred that women, especially women from lower socioeconomic backgrounds, are more sensitive to the cost factors of education than their male counterparts.

The Australian Vice-Chancellors Committee report entitled Paying their way found that, between 1984 and 2000, the proportion of university students who worked during semester had increased by nearly 50 per cent from around one in two students to nearly three out of four students. The average student was working just under 20 hours a week during the semester and nearly 27 hours a week at other times. Not surprisingly, over three-quarters of students working during semester reported that it was having an adverse impact on their studies—of course, it would.

Research commissioned by the Department of Education, Science and Training entitled Managing work and study found that nearly half of the students involved in the study described themselves as being under a lot of immediate financial pressure. A third of them said that they had seriously considered ceasing their enrolment at university in order to earn more money. A quarter of students indicated that they chose their classes to suit their work commitments rather than the other way around.

It is also significant that, between 1995 and 2000, Australia had the second lowest increase in the rate of enrolment in universities in the OECD. Only Turkey performed worse. In fact, in Australia this year, there was a 4.7 per cent decrease in the number of Australians starting a university degree—a dumbing down of this nation. As the Australian Vice-Chancellors Committee stated in a press release issued on 12 September this year:

Higher Education must be a realistic option for all Australians capable of university study and not just limited to their capacity to meet the everyday costs of living.

A major issue with student income support payments is the fact that these payments are kept at seriously low levels. Income support from Austudy or Youth Allowance payments is set at between 20 and 39 per cent below the poverty line, which means that many students struggle to meet basic living costs such as rent, food and even buying books.

People from low socioeconomic backgrounds are already seriously underrepresented in the university system. In 2000, 14.7 per cent of domestic students at Australian universities came from lower socioeconomic backgrounds—well below the population reference value used by DEST of 25 per cent. This means that Australians from lower socioeconomic backgrounds have about half the likelihood of attending university as Australians from medium or higher socioeconomic backgrounds.

The Student Financial Supplement Scheme is an option that 40,000 students have taken up this year. That has to say something about how imperative it is to financially support our students. It must say something about the dire circumstances in which many of our students currently find themselves. This government has clearly shown its true position in this debate: the Howard government does not care about the increasing financial burden on students attempting to gain a tertiary education or qualifications and is not interested in ensuring that every person in this country, despite the size of their wallet, has the opportunity to undertake further education. It should not make a difference how much money you have or your family has, where you live, how old you are, whether you have a family to support or whether you are male or female. The Labor Party is committed to equal opportunity and equal access to higher education and has delivered the policy Aim Higher, which will ensure equality of opportunity and access to further education in this country.

The retention of the Student Financial Supplement Scheme is essential to encourage more students from lower socioeconomic backgrounds not only to enter university but also to remain at university and maintain their studies during the years required to complete that work. The abolition of this scheme combined with the reforms currently before this chamber in relation to higher education—which will see universities have the capacity to increase their HECS by up to 30 per cent or have 50 per cent of their places as full fee paying—will ensure that you cannot have it both ways. You cannot shift the scales of funding in this country from the students in the public sector to the private sector and, at the same time, take the rug out from under their feet and abolish the Student Financial Supplement Scheme. You cannot expect students in this country to wear these reforms. (Quorum formed)

As I was saying, it is unfair of this government to expect students in this country to stand by and see the higher education reforms that are being proposed by this government raise the student contribution for some courses to over 50 per cent. We have seen figures for law degrees where some students will be contributing under these reforms up to 75 per cent of the cost of the course. Universities will have the capacity to increase HECS fees by 30 per cent. Sydney University have already signalled that, if the reforms go through, they will see that. Universities will have the capacity to offer 50 per cent of their places to full fee paying domestic students. On the one hand the government want to shift the burden of funding higher education onto the students, but on the other hand they want to remove the financial support that students would have access to in order to attain that. (Time expired)