The Coalition will not support the Rudd Government’s planned changes to youth allowance while they retrospectively punish students who took a gap year based on advice last year from Government agencies.  It’s that simple.

Rural kids risk missing out before they've even started.

Young people, who on the advice of guidance counsellors, Centrelink and teachers have opted to take a twelve month gap year, working to earn enough money to qualify for independent youth allowance under the current rules with plans to study next year, will have the rug pulled from under them because of the Government’s changes.

The Government’s own figures show there are about 26,000 of them.

A Government that was more interested in good policy than good spin would know that any new legislation that overhauls a system needs to be structured with a transition period so that people who made decisions in good faith on the old system are not punished.

With the stated policy aim of increasing university attendance, particularly from rural areas, the Labor party is crushing the ambitions of these 26,000 potential students.

Many of these students are based in rural and regional areas, whose parents may be deemed by the Government as ‘asset rich’, owning the family farm, but income poor.

The average family farm in Australia exceeds the amount allowed under the Youth Allowance assets test, yet the average family farming income in Australia in many years will be far beneath the level required to send that family’s children to University.

Unable to take money from their parents for the substantial costs of moving and living in the cities while studying, taking a gap year was the only option for these students.

To address this flawed piece of legislation the Coalition is proposing revenue neutral amendments that will allow those young people currently on their gap year the opportunity to attend University as they planned. It’s only fair.

This change will not be cheap, but to ensure that it is cost neutral, the Opposition is also proposing that the new cash bonus the Rudd Government plans to give to all students receiving youth allowance (even if they’re only receiving partial youth allowance) be cut to $1000 per year.

Despite Julia Gillard’s claims, we know that no student under the Coalition’s plan will be worse off, as they will all still receive for the first time ever a new cash bonus.

We also know that under the Government’s plan, 26,000 students will entirely miss out because Ms Gillard has shifted the goal posts in the middle of their gap year.

Additionally we have announced that we will introduce a new program to address the disparity that exists between rural students and city students, through either special scholarships, or alternatively through a separate entitlement.

The Senate’s Rural and Regional Affairs Committee has spent several months conducting an inquiry into this issue, taking evidence from students, parents, Universities, Unions and other groups.  We are currently considering this Committee’s recommendations as to how we might best be able to assist rural and regional students who are disadvantaged by Minister Gillard’s changes.

The Inquiry made a couple of points about how Julia Gillard has handled this issue that are particularly worth noting.

In their words: “The committee received substantial evidence and submissions which indicated that the tightening of the workforce participation criteria has caused a high level of anxiety in the community, particularly to those students currently on their gap year, and those students who are completing Year 12 (or the equivalent) this year. The committee would like to put on the record that it believes the Government has handled the implementation of this policy reform poorly.”

Even the Victorian Parliament’s Labor-dominated Education Committee recently reported: “the Committee believes that the removal of the main workforce participation route will have a disastrous effect on young people in rural and regional areas…” and that the changes “… will have a detrimental impact on many students who deferred their studies during 2009 in order to work and earn sufficient money to be eligible for Youth Allowance.”

As Year 12 students around Australia are doing their exams right now, many in rural and regional Australia are doing so knowing that the Rudd Government is attempting to remove their opportunity to get Youth Allowance and attend University.

This is not fair on them, but the Coalition will stand up for their future.

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18 comments

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    • orange says:

      06:03am | 31/10/09

      Yes? But when will you all wake up. Asset rich income poor scenario in rural areas. The ineqation is enormous, so lets all,  cash up, sell the farm, put the kids through uni., buy a nice car,boat,enjoy a holiday down size to a houseblock, look for work and or apply for social security.  There has to be a totally different approach to means testing farmers and the the rural community.
      Perhaps the govt should purchase the farms and solve the current assylum problem? Christopher i follow your logic even though you seem to speek in riddles.

    • persephone says:

      09:17am | 31/10/09

      Mr Pyne, you’re being a bit disingenious here.

      Although I do support some sort of retrospectivity here, in the name of natural justice, not all of the 26,000 students will miss out on receiving Youth Allowance.

      This is because, under the new rules, many of them will automatically qualify for Youth Allowance on parental income grounds (as the new scheme means that far more will be eligible).

      The rest will come from families of well above the average income, who can afford to help their children meet the costs.

    • persephone says:

      09:23am | 31/10/09

      Oh, and sorry, but the students who are sitting their exams now would not face any uncertainty at all if the Coalition passes the legislation now.

      They would know whether they were going to qualify for YA or not and could plan accordingly.

      Even if the legislation is made retrospective, it should not cover any of them, as they have not started a gap year.

      30% of students who take a gap year don’t go to University. Thus, by encouraging the idea that the gap year is essential to students from rural and regional Australia, your party is automatically guaranteeing that over 8000 students do not go on the University, despite qualifying to do so.

      So, yes, tackle the retrospectivity problem for the very small number of students who don’t qualify for YA under the new rules and I’ll support you. Otherwise you’re just being stubborn.

    • Charlie says:

      11:42am | 31/10/09

      Christopher, I’m sorry but the gap year rules are stupid. Welfare to students or for that matter anyone in the community should be based on need not on whether they arranged their lives in such a way as to take advantage of the rules as they existed.
      This is why the coalition’s refusal to support the imposition of means testing to things like the Private Health Insurance rebate is appalling. Why should some checkout operator at Coles or Woolies who has zero chance of minimising their taxation and likely can’t afford private health insurance even with a rebate be paying taxes to subsidise James Packers’ or any other wealthy Australian’s top of the line private health insurance. The same goes for the baby bonuses and first home buyers grant. It is insane public policy.
      There are many, many examples of where governments don’t protect people from previous decisions they’ve made when the law is changed. For instance at a state level a couple of years ago I bought a yearly rail ticket for travel to and from work. The state rail company changed the timetable sometime after I’d bought the ticket and travelling by train became inefficient for me. Funnily enough they didn’t offer to refund the remaining value of my ticket.
      If you bought a plane ticket last year to travel to the US for a holiday this you paid much more for it than someone who didn’t and then bought one after the US-Australia market was deregulated. I bet those people aren’t getting a government handout for their loses.

    • persephone says:

      12:11pm | 31/10/09

      I went away and checked, and this article is totally fallacious.
      Students who took a gap year in 2009 will be paid the independent allowance.
      So there is a transition process.
      If the legislation was passed tomorrow, there’d be no uncertainty for anyone.

    • Albie says:

      12:24pm | 31/10/09

      There are always losers. I for one am glad that kiddies from Toorak or Double Bay will now hopefully not qualify for Youth Allowance from their gap year earnings in London. Mind you, half of them probably have family farms that could be used to help them qualify for any rural-specific system…

      hmmmm…

    • Bob Mellows says:

      12:58pm | 31/10/09

      What’s going on? Aren’t the liberals supposed to be the right wing party and Labor the the left wing one?

    • Jay says:

      02:28pm | 31/10/09

      What a joke, a Liberal telling people how to make tertiary education affordable!

    • marce says:

      05:27pm | 31/10/09

      I commend you for taking a stand against the unfair way the Rudd govt has, as you put it, pulled the rug out from under gap year students.

      On the other hand, it’s a little hard to swallow that the coalition, which has devastated campus life with VSU, is really a champion for ‘the future’ of university students.

    • ELBOWGREASE says:

      04:47pm | 01/11/09

      This is only for kids whose parents earn $250k+ isn’t it?

    • adam says:

      07:43pm | 01/11/09

      “devastated campus life with VSU”??
      are you kidding? Campus life couldn’t be better! As a student myself, who started the year VSU was introduced, I can’t thank the coalition enough! Extra money in my pocket and i’m not paying for a bunch of loons running around saying how awesome their stupid niche club is and how i should totally join.
      No thanks, i’d much rather pay a small amount to join those clubs which I want, and pursue private enterprise for any needs I may have on campus (food, health, etc).

      On topic, I couldn’t be studying right now if it weren’t for the current independant youth allowance rules. I had to move interstate for my degree and my parents, while well off and way above the cutoff, definitely could not afford to support me. With four other kids to support, a mortgage, cars etc, even parents far above the cutoff can struggle to send kids to uni. Independent rate youth allowance is essential for people like me to be able to do what they want.

    • Andrew Smith says:

      09:02pm | 01/11/09

      I would suggest the gap year should be encouraged at all costs for education, economic and personal development purposes.

      Firstly Labor and universities have been espousing the need for more graduates, but in what?  We have massive skill shortages but it appears that counsellors, high schools and families are not aware, i.e. health, medical, science, maths, teaching, accounting and trades, while we criticise foreigners who come to pay high fees (i.e. income for education sector) and study these shortage occupations?

      Of course this would have nothing to do with the tertiary sector trying to shore up its short medium term finances as overseas student income softens and Australian demographics change?

      Any school leaver who works, travels and acquires “soft skills” is much better equipped to make informed study choices funded by government and tax payers, versus school leavers with no life experience.  Further, they can also choose to study via pathways and or off campus (even in Europe now there many cheaper alternatives), in a way that suits their work or lifestyle.

      What is the point of studying anything at university, at great cost (to somebody) to graduate and find one cannot compete with work experienced school leavers?

    • Murray says:

      11:01pm | 01/11/09

      I agree with Mr Pyne. I’m currently finishing my first part of Architecture degree. I was supported by my parents for this first degree, but I will have to fend for myself for the Master’s part of the degree. As I have to take a year off before I can enter masters, the new laws will mean that I will not be able to qualify for youth allowance before the start of the new semester in 2011. This will put me out by another year, because in Architecture, like alot of other degrees, you cannot start half way through the year. I don’t know how I am going to afford going back to finish my uni degree if I can’t get youth allowance, so I will have to waste another 6 months working and then wait another 6 months for uni to start.
      This whole process will really suck for Gap year students who take on seasonal work too.
      @marce - VSU hasn’t devastated campus life, it’s made Student Unions work harder at giving students value for money. the Uni of QLD is the perfect example, since VSU, the student union has done so much more that it ever used to do.

    • pete says:

      10:26am | 02/11/09

      Chris, your spin is worse than the government’s Probably the only students who will be affected are the children of professional people or asset rich farmers who will minimise their incomes for the purpose through family trusts, family companies etc etc, Then they get the assistance from the govt. Students from families with meagre incomes will still need work to support themselves as always, while the others will probably get assistance from the family companies and trusts.

      So dont carry on like you always do Chris, because the general consensus from people who watch you is that you are not very believable

    • Dani says:

      03:27pm | 02/11/09

      excuse me, did you miss the part where Labor announced the changes would not apply to the people currently on a gap year but begin the year after?
      why did you say that there 26,000 gap year teens about to have the “rug pulled from under them”??
      nothing changes for this year’s lot of gap year students.

    • Anna says:

      03:51pm | 02/11/09

      Murray, I may be wrong here, but I thought most Masters programs didn’t allow you to get YA regardless of the new rules… in fact I think they changed it in 2008 (due to the Melbourne model coming in) to allow some Masters programs to get YA. Unless you need a masters to be professionally registered as an architect (which I don’t think you do, since there is a BArchitecture at UQ) then you won’t be eligible for YA anyway!
      More on topic, as a student who was eligible for YA (and who would still be under the new rules), upon moving to university I was constantly told I was ‘lucky’ by my well-off peers because I qualified for Centrelink. Most of them were upper class folk who were working to gain ‘independence’ so that they could live at home and have free booze money.  After two years I voluntarily stopped receiving benefits because I could work 15 hours a week and support myself. It isn’t that difficult. It doesn’t cost that much money up-front to study and live out of home if you can work to a budget. It is something that parents can afford to do for their children if everyone is willing to make sacrifices. Saving money to send your children to college is a rite of passage for parents in America, but apparently no-one would consider it here even though education is considerably cheaper!
      I don’t agree with parts of the new system however - new cash bonuses at the start of every year? That doesn’t really teach the poorer generation how to budget, does it? I’d prefer that any bonuses or scholarships be tied to academic achievement.

    • Murray says:

      01:51am | 03/11/09

      Anna, Check the website. It says that Masters programs are approved for YA (well some, and since MArch is full time and very intense, I’m hoping that it will be approved.) Also UQ has had a 3yr Bachelor and 2yr Masters system for a couple of years now to come in line with the USA and Europe, so yes I do need to do the Masters to get registered. This also means that I have to use FeeHelp instead of HECS as a master degree is considerably more expensive. Some good and some bad there.
      Back on topic. All my friends, like me are from rural areas, who recieve YA use it to pay rent and pay for food and bills, as their parents can’t support them anymore. They all worked hard over the course of a Gap year or over 18 months of uni vacations to recieve youth allowance. The new system of having to work 30 hours a week for 18 months screws with alot of people.

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