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Adjournment: Students cost of living pressures - Youth Allowance

Speeches in Parliament
Lee Rhiannon 24 Aug 2012

Adjournment Speech - Thursday, 16 August 2012

Senator RHIANNON (New South Wales) (22:58):

The higher education hopes and plans of many students have been compromised by cost-of-living pressures. A report by the National Centre for Social and Economic Modelling at the University of Canberra released in May showed that disposable incomes have been keeping well ahead of inflation over the past 30 years or so. It found that this sustained period of economic growth has delivered gains across every income bracket in Australia, with the most benefits flowing to the top income groups. However, many students are under unacceptable financial pressure, partly because of housing and travel costs.

The situation is particularly harsh in Sydney. The New South Wales capital leads the nation's housing affordability crisis, with mortgage stress, rental squeeze and a shortage of social and public housing. A previous report by the National Centre for Social and Economic Modelling found that the tipping point for Sydney households experiencing mortgage stress was much lower than in the past and that 11.9 per cent of Sydney households were under extreme mortgage stress, compared to the national average of 8.4 per cent.

New South Wales received 76,700 new residents last year, most of them wanting to live in Sydney. It feels like Sydney is in the constant grip of a rental crisis and going steadily backwards. This year rental vacancies fell in the inner suburbs to just 1.5 per cent, and for properties up to 25 kilometres from the heart of Sydney the rate fell to two per cent. University students who want to live near their place of study are feeling the squeeze. They are forced to work long hours on top of their heavy study loads to pay accommodation costs. If they move out of Sydney and commute to university or TAFE colleges, their travel costs increase and they become time poor. Ultimately their studies suffer.

The impact is hardest on rural students who move to capital cities to study, students from low-income households and overseas students. Many universities estimate the cost of living for overseas students at approximately $20,000 per year. This covers costs for accommodation, food, textbooks, health cover, phone, internet and transport. It does not cover expenses such as tuition fees, buying clothing and medical costs. Domestic students face similar costs if they live away from home.

Universities are growing faster than ever, with more and more students able to access higher education. This is a welcome development, but at the same time the Labor government is not maintaining public investment in our universities. Funding shortfalls have led to students paying higher fees for an increasingly low-quality education, with overcrowding in classes which places pressure on academic staff workloads and conditions. In many cases students are accumulating higher debts as they pay more for their courses and more for rental accommodation. Students will require more disposable income to live near or to travel to their campus.

The student youth allowance is intended to support and encourage young people to apply themselves to their tertiary studies by alleviating the financial pressures of work. But the current payment levels and the personal income test mean that students cannot afford to live on the youth allowance alone and concentrate on their studies. A recent report into youth allowance payments by Unions New South Wales summarises the situation for students living on this income:

Youth Allowance is currently paid at $402.70 a fortnight … significantly lower than the minimum wage and the poverty line. The weekly payments is $405.05 below the minimum wage ($606.40 a week) and $269.28 a week below the Henderson poverty line ($470.63 a week). Youth allowance recipients receive $28.75 a day to live on.

The youth allowance payment threshold is too low and so is the personal income test. The result is that students are living in poverty. Rental assistance does not come close to meeting accommodation costs. Assistance with living costs for students needs an urgent overhaul. On top of the challenge of finding affordable accommodation, students need to allocate much of their income to transport costs. The Greens support a national concession card scheme that guarantees fair access to public transport for all tertiary students, whether they are local, international, part-time, undergraduate or postgraduate students. This needs to be provided. After housing costs, transport is a major expense for students.

I heard from the Minister for Tertiary Education, Mr Chris Evans, in a recent estimates hearing that this government has increased the reach of youth allowance, which the Greens commend. But I rejected his characterising it as a success story, citing the dire housing affordability issue many students face. The problem is real, and increased funding is needed to support these students if, as a nation, we are truly to prioritise excellence in higher education and be a competitive player in the global economy.


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