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Wednesday, 26 November 2003
Page: 18004


Senator McLUCAS (10:21 AM) —I seek leave to incorporate my speech on the Family and Community Services (Closure of Student Financial Supplement Scheme) Bill 2003 and the Student Assistance Amendment Bill 2003.

Leave granted.

The speech read as follows—

Mr President, I rise to speak in light of the government's further attacks on young people pursing higher education. For that is what the Family and Community Services (Closure of Student Financial Supplement Scheme) Bill 2003 and the Student Assistance Amendment Bill 2003 represents.

Eliminating financial barriers to further education is a cornerstone of Labor policy.

But Mr President, the same cannot be said of the government's policy position.

Real students in the real world have suffered as a result of this government's higher education policies.

A senior staff member at James Cook University in Cairns wrote to me recently on this issue. Jan Wegner is a lecturer in history with 18 years experience.

She says:

“I am disturbed by the consequences of declining student assistance. Regional income levels tend to be lower than in metropolitan areas, so my students are more likely to be from lower income families. Without a reasonable support system they have to get part-time jobs during semester, usually low-paid. I have seen the difference in my current students ... who ..., experience more pressure because they have less time to devote to their studies, and their studies are interrupted by employers who want them to work more hours or different hours to those originally agreed. Their attendance at classes and the quality of their work suffers as a result. For full time students, continuous assessment means that they have to be well organised to keep up, even with no demanding extra-curricular activities such as jobs. In addition, most of these students are the first generation in their families to get a University education, so there is no family experience to draw on for advice and help—they must learn how the system works themselves. The result, I believe, is a higher subject dropout rate for students who would normally pass. I am concerned that having created this problem, which would result in students taking longer to finish their degrees, the Government is now considering a limitation on the number of years a student can take to complete. Surely this is punishing the victim?”

Jan Wegner is clearly concerned at a range of issues affecting her students.

And, she is right to be.

Let's look at the context:

The Howard Government have introduced their Higher Education Bill which, if implemented would see every university in Australia be forced to increase HECS fee just to survive.

And, this assessment has not only come from Labor, but from the architect of Australia's Higher Education Contribution Scheme (HECS), Professor Bruce Chapman.

As Jan Wegner clearly points out, we've also seen moves to limit the time periods students can take to complete their degrees.

The government also completely bungled it's handling of over_ enrolments opting for `on the cheap' measures. This saw 15,800 places put at risk causing concern to students who have just completed year 12 and their parents with respect to the availability of places

Turning to the Bill now before the Senate, parents also have both right and reason to be concerned about the impact it will have on students now reliant on the Student Financial Supplement Scheme.

Accordingly, Labor is not supporting it.

The Student Financial Supplement Scheme was introduced in 1993 to enable students in financial need to access extra cash through government provided loans to enable them to continue studying. It is a completely voluntary scheme and the intention to close this program is mean-spirited.

It fills a vital need for the approximately 40,000 students a year who depend on this money to study.

The Scheme has two forms.

Category 1 loans allow students receiving income support to trade in $1 of income support funds for $2 of loan. This allows them to increase their income by up to $3,500 a year or $135 per fortnight, and provides real options in balancing study with employment and other commitments.

Students who are ineligible to access income support and whose parents earn less than $64,500 are able to access a Category 2 loan of up to $2,000 a year.

It's difficult to see how closure of this scheme, will benefit a single Australian student.

Like many of my colleagues, I have been inundated by correspondence from anxious constituents who have been told by Centrelink that a vital source of income will be cut off if this Bill is passed in this place.

It is clear that many students will simply not be able to continue to study.

For many, this will mean the end of their career aspirations and the hopes of their families.

I have seen correspondence of this nature copied to Senators from all parties. Knowing the hardship this measure will impose, it defies reason that government Senators could continue to countenance the imposition of such a heartless measure on our best and brightest young people.

Again, it is not just Labor making this important point.

The Australian Vice-Chancellors Committee produced a report called Paying their way, which dealt with the issue of financial assistance.

The survey sample was extraordinarily large—35,000 students.

That makes the findings of this report very significant.

The report found that students are very positive about the supplement scheme.

The report demonstrates that the Scheme has made a real difference to the lives of many students.

It is beyond my comprehension that a government could act in a manner that will effectively damage real lives...

...real qualifications

...real skills

...and real future job prospects.

As if this legislative prospect isn't enough for students to bear, it was also revealed recently that the Howard Government is prepared to axe the Student Financial Supplement Scheme administratively if this bill is not passed.

According to the Minister for Youth Affairs: “the Government could opt for a non-legislative option for closing the loan scheme and not renew or negotiate the contract with a financial institution to cover student loans. “

We know students are finding it increasingly difficult to pay for even the basics-food, rent, transport, books and fees.

Dr Carolyn Allport, National President of the National Tertiary Education Union, at the Senate Inquiry into Poverty and Financial Hardship said “the inability of most students to access income support schemes ... sends the wrong message to potential students from poorer families who aspire to higher education. “

And Daniel Kyriacou, President of the National Union of Students told Senators at the Inquiry on 1 May 2003, “It is currently the case that students who are studying live between 20 and 39 per below the poverty line. In fact, some mature age students find it hard to get into the education sector. They live the furthest below the poverty line, living 39 per cent below it, through their lack of ability to access things such as rent assistance. This is forcing students into hardship...things like missing classes have become a regular thing...in fact, students these days are forced to be workers first and students second..”

We know that the average student is working just under 20 hours a week during semester and nearly 27 hours a week at other times.

We know that this is having an adverse impact on their studies.

And how do we know this?

Because, the Minister's own Department produced a report that tells us this.

And this is yet another report the Minister has sat on to avoid scrutiny. The University of Melbourne completed their report, Managing study and work and it languished in the black hole of the Minister's in tray for almost half of last year.

Why?

Because nearly half of the students involved in the study described themselves as being in parlous financial circumstances. A third of them clearly stated they had thought seriously about whether they could continue studying because they were so cash strapped.

And a quarter of students in this country have to chose their classes around work commitments rather than as it should be making choices about courses because of learning needs.

Students are under enormous financial strain because of inconsistent forms of support from this government. I've heard this repeatedly from students I've spoken to.

The reality is that some student unions are providing food via soup kitchens to feed hungry students.

Mr President, we have forty to sixty thousand reasons why the Student Financial Supplement Scheme needs to be protected.

For that is the number of young people who depend on it to go about their daily lives in Australia's higher education institutions.

The concerns the government has raised about the scheme don't carry any weight.

Transposed into a commercial framework, which is how this government increasingly views our higher education-sector, none of them would warrant the wind up of an operational division.

Rather than trashing the SFSS, why not change the ratio of the trade-in to supplement amount so that it is more favourable? Why not improve incentives for voluntary repayment?

We believe the scheme could be easily remodelled rather than removed!

But rather than listening to students and their parents, the government cares more about the claims of the Australian Actuary on likely repayment projections.

The government claims the Scheme has incurred $2 billion of debt since 1993.

Yet we are advised that repayments are already in excess of $500 million. Currently the total outstanding loans are worth $467 million less than the amounts issued. So, Mr President, since the scheme was implemented in 1993, 25% of the loans issued have been repaid. And, if we look at the value of the loans that have matured—namely those issued from 1993 to 1997, HALF have been repaid.

This is actually not a bad financial track record for retiring debt.

Some of the government's corporate mates, would LOVE a debt repayment track record like this!!!

It is certainly no reason to shut down the scheme. And, it could NOT be said given the increased surplus projections that it presents an insurmountable obstacle.

As well as the clear alternative indicators, the actuarial argument the government clings to deserves the benefit of Albert Einstein's advice. He said, “Not everything that can be counted counts, and not everything that counts can be counted.”

Mr President, another straw the government is grasping at with respect to the scheme is a reduced take up rate.

The take up rate has fallen by more than 35 per cent since it was introduced in 1993. This is a false argument and doesn't address the reasons why individual students take up SFSS.

Young people need financial flexibility and choice as they undertake further education. They can now access a wider range of commercial and university loan options, which would, at least in part, explain falling take up rates. And, given that so many thousands of students do in fact take up the SFSS option, Labor believes the scheme should be retained as a financial option.

It is certainly a far better option than incurring credit card debt and this is unfortunately the type of debt that students will increasingly be forced into if this government succeeds in this attack on student financial assistance.

By contrast, Labor has announced that it would create more than 20,000 full- and part-time commencing university places every year as part of its $2.34 billion Aim Higher package for universities and TAFEs. Labor will not support any measures to increase fees for Australian students and we will work to retain and strengthen systems to provide appropriate financial assistance and relieve the burden on students.

In conclusion, Mr President, let me say that the proposal to trash the SFSS is flawed, heartless and will unnecessarily remove a useful financial option for students.

I have reached the conclusion that when it comes to this Bill, and the handling of his portfolio, Will Durant's famous expression really comes into its own when applied to this Minister, “Education is a progressive discovery of our, (or might I say HIS) own ignorance.”