Making it easier for regional students to access tertiary education (part 1)
I rise today to support the Social Services Legislation Amendment (Student Reform) Bill 2018. This bill implements measures that will make it easier for rural, regional and remote students who have to move away from home to study and to gain youth allowance payments. Youth allowance is subject to partner, personal and parental income testing. Independence for youth allowance purposes means that the student payment is not reduced by parental income testing.
The bill will improve access to youth allowance for regional students who must relocate to study, in response to the Halsey review of regional, rural and remote education. In August 2017 Professor Halsey visited both Albany and Kalgoorlie, in my electorate of O'Connor, where access to independent youth allowance was expressed as one of the main factors affecting students' ability to pursue tertiary education.
This government has already made some positive changes to youth allowance, but there is more work to do. In 2015 the government removed the family asset test and the family actual means test from the parental income test. Removing the family assets test saw around 4,100 additional students qualify for independent youth allowance for the first time, accessing payments of more than $7,000 per annum. The passage of this bill in 2015 significantly reduced the regulatory burden on around 200,000 families subject to the family asset test.
Removing the family actual means test saw an additional 1,200 students receive youth allowance for the first time and some 4,800 existing students have had their payments rise by approximately $2,000 a year. Additionally, in 2016 the government announced it would reduce the period of employment for regional, rural and remote students under the youth allowance regional workforce independence criteria from 18 months to 14 months. This reduction responded to parental and student concerns that the 18-month period was causing regional students to take two years off, in order to earn their independent status prior to attending university. Reducing the period to 14 months has meant that students could satisfy the youth allowance regional workforce independence criteria by taking a single gap year rather than having to take two gap years. For example, if a student finished school in November 2016 they could commence university in February 2018, following their gap year, and receive youth allowance payments immediately.
In 2018 this government is making more changes to the independent youth allowance to ensure that our regional students have the same opportunities and access to tertiary education as their city counterparts. Schedule 1 of this bill allows for the implementation of a 2018-19 budget expense measure of $53.9 million over four years, to provided additional support for students, as a direct response to the independent Halsey review. The bill will increase the income cap for students accessing the youth regional workforce independence criteria from
$150,000 to $160,000. It will also increase the new $160,000 cut-off by $10,000 for each additional child in the family, to take into account the extra cost of raising large families. This means, for the average two-child family, the parental income cut-off for youth allowance regional workforce independence criteria will be $170,000, a significant increase from the current $150,000.
On the passage of this bill, the increases will come into effect on 1 January 2019. In addition, feedback from some students has indicated that when they finish school their parental income may be under the cut-off but, by the time they have completed their self-supporting period, their parental income may have increased, preventing them from qualifying as independent and resulting in these students feeling they've, effectively, wasted their gap year. This bill will provide students with the option to make the year in which the parental income is assessed the financial year preceding the beginning of the self-supporting period. With this change, students will know before they decide to take a gap year whether their parental income will be under the cut-off. The number of students who qualify for youth allowance regional workforce independence criteria, it is estimated, will increase by 75 per cent.
Access to tertiary education for regional students is already difficult. To be denied assistance based on parental income, when they are already considered independent for most government related programs, is ludicrous.
The $150,000 parental income cut-off to access these criteria was set in 2011 and has remained at $150,000 since its introduction. In addition, this parental income cut-off is the same regardless of family size. This doesn't reflect increasing wages or the extra costs associated with raising a larger family, household debt or real disposable income. The distance of students' parental homes in O'Connor to Perth, where universities are based, is significant. Unlike their city counterparts, these students are not able to live at home whilst studying and have their living expenses absorbed into the family home. Being unable to access financial assistance can prevent some regional students from pursuing tertiary study and places a significant financial burden on regional families.
The changes contained in this bill will help mitigate the disparity in access to higher education between regional students and their city counterparts. City students can live at home while studying at university or equivalent institutions and continue to be supported by the family. If they are eligible, they can also apply for youth allowance and receive an allowance of between $239 and $288 per fortnight.
Mr Deputy Speaker Mitchell, it's one of those days when clashes between the Federation Chamber and the main chamber come into play, but thank you for giving me the opportunity to continue my remarks on the Social Services Legislation Amendment (Student Reform) Bill 2018. I've run several forums in my electorate of O'Connor since my election to the seat in 2013. In 2015, Senator Bridget McKenzie came to O'Connor to co- host forums on this topic and, in 2017, Albany Senior High School and I co-hosted a forum regarding access to independent youth allowance. I also attended forums held by Professor John Halsey, who conducted the independent inquiry from which this legislation and reform have emanated.
Every forum I've held on this issue has been well attended by high school and gap year students, parents, teachers, educational professionals and others concerned about barriers that country kids experience in obtaining tertiary education. I commend all the attendees for sharing their personal and often heart-rending stories, and I acknowledge their welcome set of recommendations on how the federal government can address the obstacles they have encountered.
A common scenario told to me by students and parents across the years in O'Connor is that students who have worked towards youth allowance eligibility under the regional independence criteria only failed due to a parental income of $150,000. These students have to rely on either part-time work or their parents to finance their living expenses of between $17,000 and $25,000 per year while studying at university. Youth allowance is the main benefit regional students seek to access to allow them to live guilt-free from a financial burden otherwise incurred by their parents, many of whom are supporting other siblings at school and university. My personal experience is that I worked for two years to obtain independent status for youth allowance and was able to move to the Muresk agricultural campus of Curtin University to pursue my agribusiness degree. Thirty years on, I'm proud to be part of a government that continues to work to make it easier for regional students to access tertiary education.
I want the House to know that, in 2017, 86 per cent of students from non-metropolitan areas earned an offer for a place at university, compared to 81.7 per cent of metropolitan kids. Yet, in the same year, only 72 per cent of those country students would accept their offer, compared to 78 per cent of their urban counterparts. Of those that accepted, 17 per cent of country students deferred their enrolment, more than double the deferral rate of their city-student counterparts. These statistics do not take into account those who did not accept a place but chose to take a gap year and apply for a place the following year.
The independent review identified that young people in regional Australia are half as likely to have completed a university degree as their city counterparts. This is largely due to difficulties accessing financial assistance. In the year of 2017, there were approximately 1,400 year 12 graduates across O'Connor. Assuming they all pursue tertiary studies and all fall under the new criteria, just over 1,000 of them, or 75 per cent, will now be able to apply for youth allowance where they hadn't been able to do so before.
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