Preface
This report examines current measures for student income
support, with particular reference to the adequacy of Youth Allowance, Austudy
and ABSTUDY and their effect on students and their families. The committee is
concerned that there has not been a Government-initiated review of the student
income support system since 1992. Over the last decade the student income
support system has operated in a policy vacuum. It is now showing the signs of this
neglect. The Government's preoccupation with program efficiency over policy
effectiveness and continuing problems with Centrelink's delivery of payments
have taken their toll on students. The current level of income support does not
come to close to providing students with a decent living wage to cover the cost
of accommodation, food, bills and transport. The level of income support has been
falling steadily behind the rising cost of living. This has resulted in many
students experiencing severe financial hardship and poverty.
There is a widely accepted view among the student population
that their worsening financial situation reflects a 'user-pays' mind-set. Students
are viewed as the beneficiaries of government subsidies who will gain
financially from this investment through future earnings. Government cost-shifting
has resulted in students bearing more of the cost of their education than ever
before. The closure of certain financial assistance schemes and the
Government's proposed voluntary student unionism legislation are clear examples
of this trend. Students and their representative bodies have struggled to be
heard and have their financial plight accepted as a serious public policy issue,
but to no avail.
Raising awareness of student financial hardship is
important, yet the committee believes that immediate steps could be taken to
make the income support system more relevant to changing student profiles. In
particular, the harshness of eligibility criteria relating to the age of
independence, the parental income test threshold and the ineligibility of Austudy
recipients for Rent Assistance needs addressing now. The committee finds that
various anomalies and inconsistencies with the eligibility criteria penalise
students who are most in need of financial assistance. Students from households
with low to modest incomes, from regional and remote areas and indigenous
students are often hardest hit by rules which appear to lack any clear policy
rationale.
A major change in the profile of students over the past
decade is the increasing proportion of students who need to supplement their
income support payment with paid employment. The committee is concerned that
students are being forced to work longer hours, often in low-paid or cash-in-hand
jobs, as a direct result of inadequate income support. Reports of students
resorting to product testing by unscrupulous companies and even turning to
prostitution as a source of income raise serious moral, health and safety
concerns. Working longer hours not only has a detrimental effect on students'
academic results, it also has an economic effect because it delays course
completion and entry of skilled young people into the workforce.
The committee has formed the view that the relationship
between paid employment and study is one of the most important policy
challenges facing the higher education sector. As a consequence, it recommends
that the Government conduct regular surveys of student finances and work
patterns, and examine the feasibility of a new comprehensive student income
support payment which would provide financial assistance to students for the duration
of their course.
The subcommittee formed to deal with the inquiry into
student income support commends its report to the full committee.
Senator Trish Crossin
Chair
Report formally adopted by the committee on 21 June 2005 for tabling
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