Chapter 2 - Opposition Senators' report
Introduction
2.1
The Social Security Amendment
(2007 Budget Measures for Students) Bill 2007 was introduced into the House
of Representatives on 21 June. The Selection of Bills committee referred the
legislation on the same day to the Senate Employment,
Workplace Relations and Education Committee for inquiry and report by 30 July 2007.
Background
2.2
This bill gives effect to measures
announced in the 2007-08 Budget concerning income support for students and
updates aspects of the administration of the ABSTUDY and the Assistance for
Isolated Children (AIC) schemes, in line with similar provisions under the Social
Security Act 1991.
2.3
The bill extends eligibility for
Austudy payments to students undertaking masters degrees and expands the
eligibility for Rent Assistance to all Austudy recipients. The bill also makes
minor amendments to the act to bring processes for ABSTUDY and AIC payments
into line with other allowances when money is deposited into an incorrect
financial institution and to allow data to be transferred electronically for
administrative purposes. The total financial impact of the bill is $130.2
million over the forward estimates.
Issues
Income Support
2.4
Against a range of measures, the
evidence suggests that Australian university students are increasingly being
confronted by daily financial hardship. This was demonstrated clearly in a
number of the submissions received by the inquiry.
2.5
Universities Australia
welcomed the budget measures, noting that they will provide better financial
support for many students. The submission argued, however, that the measures
did not go far enough. In particular, Universities Australia was critical of
the fact that narrowly defined criteria for Youth Allowance eligibility was preventing
many students from gaining income support assistance.
2.6
The submission argued that the
financial difficulties young Australians face in completing their university
studies was exacerbated by an increasing number of students having their
applications for Youth Allowance rejected or not receiving Youth Allowance at
the full rate. 'The reason is that many of these students are being assessed on
the basis of their parents’ income and assets.'[1] This was in turn placing an unreasonable financial
burden on many students more generally.
2.7
Universities Australia
provided its 9 March report, ‘Australian
University Student Finances 2006’, to the
Committee to support its contention that university students at all levels are
increasingly faced with financial hardship. The 9 March report found that 40 per cent of full-time students and 33 per cent of
part-time students believed the jobs they were doing were having an adverse
impact on their studies; 22 per cent of full-time students and 33 per cent of
part-time students regularly missed classes because they had to work; and that
the number of students incurring a debt has more than doubled from 11 per cent
in 2000 to 24 per cent today.
2.8
Universities Australia argued that
the 'age of independence for Youth
Allowance recipients should be reduced in order for university students not to
be assessed on the basis of their parents’ income and assets.' It also pointed
out that the Social Security Act 1991 governs the age of independence,
and that the act contains a provision indicating that the age of independence
'will be progressively reduced over time'. Universities Australia
observed that this provision has been in place for nine years, since the
passage of the Social Security Legislation Amendment (Youth Allowance) Act 1998,
and the age of independence has not yet been reduced. It argued that an
amendment to the bill to reduce the age of independence to 18, as per the
policy principle of reducing the age of independence, would greatly improve the
support available to Australian university students.[2]
2.9
Both the National Union of
Students (NUS) and the Council of Australian Postgraduate Associations (CAPA)
also welcomed the budget measures, as did university-specific student
organisations.
2.10
Both NUS and CAPA noted that of themselves,
the measures are only part of the answer to redressing the financial hardship
of university students.
2.11
The NUS submission noted that as a
general proposition, the budget measures would not 'sufficiently address the
ability for students to live and study without experiencing or being at risk of
falling into poverty'.[3] NUS also argued that:
...the expectation that students will
continue to be financially supported by their parents (if they are deemed
well-off) is unrealistic and does not allow for the individual’s respective
needs and situations.[4]
2.12
The Curtin Student Guild also
argued for an increase in the parental income test threshold. It also argued
for the exclusion of business assets, farms or superannuation savings from its
assessment criteria.[5]
2.13
The CAPA submission, while particularly
welcoming the measure to extend rent assistance to Austudy recipients, was
critical that insufficient effort had been made to provide genuine income
support assistance, and that
...the current
rates for Youth Allowance and Austudy place many students in extreme poverty.”
It further noted that “...even with access to rent assistance, most students are
unable to live on income support alone, let alone those challenged with
additional financial commitments and responsibilities.[6]
2.14
The CAPA submission made a number
of recommendations, including that:
access to income support be extended
to all students studying at postgraduate level to include both coursework and
research higher degrees, regardless of the nature of the course in which they
are enrolled.”[7]
2.15
The base rates of Youth Allowance
and Austudy be raised to, and remain above, the relevant Henderson Poverty
Line.
2.16
The age of independence be reduced
to 18 years of age to bring it into line with most other measures of social and
financial responsibility.
Eligibility requirements
2.17
CAPA was also critical of the
course eligibility provisions of the bill. The bill provides that only masters courses required for entry to a
profession, or exist as a result of a course restructure, will be eligible for
income support assistance, and that course eligibility will be at the
discretion of the minister. CAPA argued that:
these measures in their current form
will allow access to income support to only a very small number of students in
this group, and therefore fail to address the genuine need that has been
identified in this area.[8]
Conclusion
2.18
Labor senators note that the
submissions supported the overall objectives of the budget measures contained
in this bill. In light of the evidence presented to the committee, these
measures are long-overdue.
2.19
However, Labor senators also noted
the views expressed by the minister for Education, Julie Bishop, at the
time of the release of the Universities Australia report Australian University
Student Finances, that students should be more frugal in their living
arrangements. This view assumes that student financial constraints are
determined by lifestyle and not by genuine hardship. This view is inconsistent
with the sentiment expressed by all submissions received by the inquiry and
Labor senators strongly disagree with the minister’s sentiment. The minister’s
flippancy in this regard is deeply disturbing.
2.20
The fact that the submissions also
went beyond the immediate remit of the scope of this Inquiry to call for
changes to the Youth Allowance eligibility indicates that this is an area of
urgent attention.
Recommendation
Labor
Senators support the provisions of the bill, but note additional Income Support
measures for university students at all levels need to be provided.
Senator Gavin Marshall
Deputy Chair
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