Bills Digest No. 16  1999-2000 Indigenous Education (Supplementary Assistance) Amendment Bill 1999

Numerical Index | Alphabetical Index

This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.


Passage History
Main Provisions
Concluding Comments
Contact Officer & Copyright Details

Passage History

Indigenous Education (Supplementary Assistance) Amendment Bill 1999

Date Introduced: 30 June 1999

House: House of Representatives

Portfolio: Education, Training and Youth Affairs

Commencement: Upon Royal Assent


This purpose of this Bill is to transfer a particular form of Commonwealth support for indigenous education from the ABSTUDY program to the Indigenous Education Strategic Initiatives Program (IESIP). The courses in question involve both distance education and a component of travel away from the student's home base. The Bill also provides for the administration of the Commonwealth funding from within the IESIP, including the calculation of maximum amounts payable by the Commonwealth to education providers and the appropriation of required funds from the Consolidated Revenue Fund. A number of minor and consequential amendments are also made.


Government Programs for Indigenous Education

Since 1989, Commonwealth funding for indigenous education has contained two main elements: income support and supplementary benefits paid to individual students, and direct funding to institutions providing courses and training.

The first Commonwealth scheme for assisting indigenous students commenced in 1969 and was known as the Aboriginal Study Grants Scheme (Abstudy). It was confined to post-school education and training. Later, programs to assist indigenous students at secondary school emerged, notably Absec.

In 1984, the Commonwealth Government commissioned a review of Abstudy by Williams and Chambers who concluded that Abstudy was still decades away from achieving educational equality, but had facilitated greater participation by indigenous people in education, and should be maintained.(1)

In 1988, Absec and Abstudy were amalgamated into the Aboriginal Study Assistance Scheme (ABSTUDY). In the following year, the Government announced the Aboriginal Education Strategic Initiatives Program (AESIP, later IESIP). This marked a diversification of funding policy, because rather than provide benefits to individual students to enable them to study, IESIP directed funds to institutions such as universities and TAFE colleges for indigenous education. In the same year, Parliament passed the Aboriginal Education (Supplementary Assistance) Amendment Bill 1989 ('the Principal Act') (the word 'Indigenous' replaced 'Aboriginal' after an amendment in 1995). This Act gave effect to IESIP's focus on education providers and their indigenous education initiatives.

ABSTUDY continued as an essentially non-statutory scheme of direct student support. Various adjustments were made to the scheme in the years leading up to 1996, such as lowering the age of independence and measures targetting mature age students, the homeless and those in custody. Several other programs which provided direct support to students also emerged in this period, including the Aboriginal Tutorial Assistance Scheme and the Aboriginal Student Support and Parent Awareness Program.

In the May 1997 Budget the Howard Government announced major changes to ABSTUDY to commence from 1 January 1998. They included capping the incidentals allowance, cuts to fare allowances and changes to what is known as Away From Base assistance. The Government also announced that it would be conducting a review of ABSTUDY 'in the context of the Government's other student assistance programs'.(2)

The announced changes met with strong and sustained criticism from indigenous, academic as well as parliamentary quarters.(3) It was widely asserted that the Government's figures showed planned cuts to ABSTUDY totalling almost $40 million. The Government's most recent assertion is that in its first three Budgets, spending on indigenous education as a whole increased 'by a total of $143 million'.(4)

Continuing controversy over the ABSTUDY measures announced in the 1997 Budget eventually led to a partial Government backdown on Away From Base allowances and interstate travel entitlements.(5)

Meanwhile as part of the review foreshadowed in the Budget, the Government released a Discussion Paper which stated the review was being undertaken 'in the context of the Government's plans to introduce a Youth Allowance which will replace AUSTUDY and a range of other forms of income support for young people'.(6) The main questions posed in the paper were whether ABSTUDY should continue as a distinct form of living allowance, or whether it should join AUSTUDY, Newstart and other youth income support schemes in the new common youth allowance. The paper also drew attention to supplementary benefits not available under other schemes and provided to counter the extreme disadvantage faced by many young indigenous people. The paper asked whether alternatives such as direct payments to educational institutions would do more to overcome indigenous disadvantage.

Major Policy Announcement: December 1998

A year later, in December 1998, the Government announced that ABSTUDY would be maintained as a separate scheme. Much emphasis, however, was placed on changes to operate from 1 January 2000, which to a large extent would assimilate ABSTUDY benefits to those payable to non-indigenous students under the Youth Allowance. The exception would be 'where special provision needs to be made to cater effectively for the particular disadvantages faced by many indigenous students'.(7) The Minister also pointed out that as a result certain benefits such as rent assistance would become available to ABSTUDY recipients for the first time. Generally, the Minister said that 'improvements' were being made 'to ensure clarity, simplicity, equity, administrative efficiency and accountability'.(8)

A major change foreshadowed by the Minister related to the Away From Base allowance.

Away from Base Assistance

The Minister told a national workshop last year that 'a principal cause of educational inequality lies with the failure to adapt mainstream educational approaches to meet the needs of indigenous students'.(9) This philosophy is at the heart of the Away From Base component in ABSTUDY. The allowance is paid to cover activities such as residentials, placements and field trips where the student is required to travel away from their home base in order to comply with course requirements. Over the last decade, many institutions developed 'Block Release' courses tailored to the needs of indigenous students:

Through the Block Release mode of delivery, individuals are able to engage in study to improve their employment and career prospects while at the same time remaining in employment and/or within their communities. This is cost effective in that whole families do not have to be relocated for extended periods so that the student can attend university or TAFE courses not available closer to home.

...Programs which encourage indigenous participation in education while simultaneously being responsive to family, community and cultural commitments have been powerful tools for bringing indigenous students into educational settings.(10)

The May 1999 Budget

In his major policy announcement of December 1998, the Minister foreshadowed that the Away From Base benefit for courses delivered by 'mixed mode' (e.g. intensives, residentials, distance learning etc) would cease to be paid to individual students under ABSTUDY and instead would take the form of a specific purpose grant to education institutions, under IESIP:

Under the new arrangements the Government will settle individual agreements with institutions for the purpose of achieving improved educational outcomes for indigenous students from remote communities.(11)

There was no other explanation for the change other than 'to ensure flexibility'.(12)

On 11 May the Minister released a statement about Budget measures in the area of indigenous education. It detailed expenditure both on institutions under IESIP and individuals under the Indigenous Education Direct Assistance (IEDA) Program. Under IESIP the Minister said that funding levels would be maintained for the year 1999-2000 and a number of administrative changes would be made. The most prominent changes were:

  • the current triennial funding for 1997-99 to be extended by 1 year so that from 2001 IESIP could operate on quadrennial funding, in alignment with the Commonwealth's major schools funding programs
  • the changes necessary to make ABSTUDY largely mirror the benefits payable to non-indigenous students, except where particular disadvantage warranted additional benefit
  • terminating the Away From Base payment and providing a replacement in the form of block grants to institutions in return for agreed education outcomes.

Again the statement did not elaborate on why the Away From Base component had ceased to be paid as an individual benefit and been transformed into an IESIP payment to an institution, or how this move would promote the policy which underpinned the Away From Base allowance.(13)

Main Provisions

Schedule 1-Amendment of the Indigenous Education (Supplementary Assistance) Act 1989

Item 1 defines 'ABSTUDY approved course' and makes clear that reference to such courses in the Indigenous Education (Supplementary Assistance) Act 1989 will be confined to courses which mix distance education with a component involving travel by the student away from his or her home base.

Item 2 defines 'higher education institution' by reference to another Commonwealth Act.

Item 3 excludes the type of payments provided for in the Bill from the Principal Act's definition of 'permitted payment'. This will prevent the general appropriations dealt with in section 13B becoming confused with the appropriation of money for funding ABSTUDY approved courses provided for in item 8.

Item 4 is consequential on tem 5.

Item 5 brings the Bill's proposal within the existing structure of the Principal Act, by providing that Indigenous education agreements may authorise payments for an ABSTUDY approved course, in addition to the two existing types of agreement.

Item 6 confirms that the amount payable under such an agreement is calculated in accordance with the formula and principles found in item 7.

Item 7 provides in proposed section 10L the means to calculate the maximum amount an education provider will be paid for ABSTUDY approved courses which are run in the year 2000. If funding for indigenous students enrolled in ABSTUDY approved courses run by the education provider was provided in 1998, then that provides a base year for the formulas found in proposed subsections 10L(2), (3). If not, then proposed subsection 10L(4) provides a modified version of the formula.

Proposed section 10M explains how the adjustment for inflation provided for in the above formulas is calculated.

Item 8 inserts in the Principal Act a provision which authorises appropriations from the Consolidated Revenue Fund to fund ABSTUDY approved courses.

The Principal Act, when passed, originally contained appropriations for the years 1990-1992. Subsequent amendments have adjusted some of the nominated amounts and added appropriations for subsequent trienniums or similar periods. Item 9 will amend section 13B of the Principal Act to add an appropriation of $126,100,000 for the 18 months from 1 January 2000 to 30 June 2001, for the purpose of making permitted payments. This is presumably consistent with the announcement made in the Budget about bringing the IESIP funding into line with other education programs running on quadrennial funding from 2001.

The cost supplementation provisions were included in the Bill for the first time from April 1998. They permit the adjustment of IESIP grants in line with cost increases. At the time they were introduced into Parliament the Government said that this brought the program into line with other education programs. Item 10 makes a minor change to the cost supplementation provisions which is consequential on the appropriation for the 18 months to 30 June 2001 contained in item 9.

Schedule 2-Amendment of the Student Assistance Act 1973

Because item 12 in Schedule 1 authorises the appropriation of money to pay education providers for ABSTUDY approved courses, item 1 removes the appropriation provision. which has to date authorised payments of ABSTUDY to individual students. It does so, however, only in respect of the Away From Base element in a mixed mode study course (in other words that part of the benefit which has been transferred out of ABSTUDY and into IESIP).

Concluding Comments

The definition of 'ABSTUDY approved course' in Item 1 of Schedule 1 is obviously designed to preserve in the IESIP scheme that part of ABSTUDY funding which has emphasised sensitivity to the specific needs of disadvantaged indigenous students (the Away From Base allowance). The question is whether the mechanism of directly funding institutions will equal or better the educational outcomes from providing the benefit direct to students.

Government documentation consulted for this Digest makes it difficult to answer this question because the educational rationale for the measure and supporting evidence have not been set out in detail. The Minister denied that the Government had been driven by Pauline Hanson's criticism of ABSTUDY to remove special recognition of indigenous people. He then said:

The Government has reaffirmed its commitment to that program, equally, it's reaffirmed its view that where young Australians, indigenous or non-indigenous, are in exactly the same situation they should receive exactly the same benefits.(14)

The Minister has also said that the change will bring clarity, simplicity, equity, administrative efficiency and accountability. During a radio interview in December 1998, without going into detail, he adverted to the mechanism of tied funding agreements under the Principal Act as a sound one for securing defined outcomes, as well as reiterating arguments of equity and simplicity:

ABSTUDY had become a very complex scheme. Many Australians, including indigenous Australians, were confused about the benefits available through ABSTUDY. The scheme needed to be simplified and we needed to focus it much more on actually achieving improved educational outcomes. The philosophy behind these changes is that all Australians are entitled to equal educational opportunity. The changes we made will allow us to make sure that institutions catering particularly to indigenous students have to deliver improved educational outcomes.(15)

The authors of a report commissioned by ATSIC and published in early 1998, however, expressed concern that funding to institutions under IESIP may be too indirect a means of overcoming barriers to access for individual indigenous students:

While noting the importance of the substantial financial support provided to educational institutions under IESIP or other programs aimed directly at institutions, the review team considers it necessary to further develop the point made in [another section of its report]. A main aim of ABSTUDY is to provide an incentive to encourage greater indigenous participation in education. If indigenous people do not access educational institutions and stay in them, they simply cannot obtain benefits offered by IESIP or the special allocations provided to higher education institutions.

...programs aimed at educational institutions to improve indigenous education outcomes are limited by the extent to which indigenous people are able to access and participate in education for want of adequate financial assistance.(16)

This appears to be the main policy question raised by the Bill: can the institutions themselves use the money to remove barriers and actually achieve enrolments, participation and completion more effectively than if the money was put in the hands of the intending students?


  1. Don Williams and Barbara Chambers, An Evaluation of the Aboriginal Study Grants Scheme, 1986, quoted in Owen Stanley and Geoff Hansen, ABSTUDY: An Investment for Tomorrow's Employment, A Review of ABSTUDY for the Aboriginal and Torres Strait Islander Commission, ATSIC, 1998, section 7.2.3.

  2. Dr David Kemp MP and Senator Amanda Vanstone, Building on Reform, Media Release, 13 May 1997.

  3. See for example Debates, Senate, 22 October 1997, p 7885 and p 7891, and 24 November 1997 p 9322, and RG Schwab and SF Campbell, The Future Shape of ABSTUDY: practical and policy implications of the recent proposed changes, Centre for Aboriginal Economic Policy Research, Discussion Paper No. 140/1997.

  4. Dr David Kemp MP, Improving Opportunities for Indigenous Australians, Media Release, 11 May 1999.

  5. Senator Chris Ellison, Government Announces ABSTUDY Changes, Media Release, 30 October 1997.

  6. Department of Employment, Education, Training and Youth Affairs, Review of the Aboriginal Study Assistance Scheme (ABSTUDY). A Community Discussion Paper, November 1997, p 4.

  7. The Hon Dr David Kemp MP, New ABSTUDY: Improved Education for Indigenous Students, Media Release, 17 December 1998.

  8. Ibid.

  9. The Hon Dr David Kemp MP, Educational Equality for Indigenous People: A National Priority, Speech, 3 December 1998.

  10. Schwab and Campbell, op.cit., pp 13, 18.

  11. The Hon Dr David Kemp MP, New ABSTUDY: Improved Education for Indigenous Students, Media Release, 17 December 1998.

  12. Ibid.

  13. Dr David Kemp MP, Improving Opportunities for Indigenous Australians, Media Release, 11 May 1999.

  14. PM, ABC Radio, 15 December 1998.

  15. Ibid.

  16. Stanley and Hansen, op.cit., sections 7.2.5 and 7.5.

Contact Officer and Copyright Details

Sean Brennan
2 August 1999
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

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ISSN 1328-8091
© Commonwealth of Australia 1999

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Published by the Department of the Parliamentary Library, 1999.

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