The Minister for Education, Julia Gillard, today said that Mr Abbott needs to explain how he will fund changes to the Youth Allowance system that would offer new scholarships but would leave in place arrangements where kids from Australia’s richest families continue to get full support.
In yet another unfunded proposal, the Coalition has said the Government should split the bill and pay scholarships without making the necessary changes to stop the rorts.
Deputy Leader of the Nationals in the Senate Fiona Nash has said today on Sky's Talking Politics that “we agree with the start-up scholarships… and we also agree with the increases to the thresholds.” Ms Nash went on to say that “Look it has been there that some, a few, have rorted the system”.
The cost of offering the scholarships and not making any other changes would be more than $610 million over four years.
The cost of increasing the parental income test would be another $560 million on top of that.
Mr Abbott and Ms Nash now need to make clear how they plan to fund this more than a billion dollar unfunded commitment.
Mr Abbott needs to explain whether he’d increase taxes or cut services, like tearing money away from schools and hospitals.
New figures today show that under the proposed changes in every part of the country students who benefit from Youth Allowance exceed those who will be disadvantaged by a factor of more than three to one.
Over 100 000 students stand to be better off, mostly from lower income families. The Government’s changes would stop students from some of Australia’s richest families from simply taking a gap year to ensure that they receive full youth allowance while families with incomes of less than $50 000 a year lose benefits.
The figures also showed that students in rural areas on average are more likely to benefit from the changes than their city cousins.
Groups from every part of the university and political spectrum have called for the Youth Allowance Bill to be passed, unamended, as soon as possible.
Key elements of the proposed Labor changes include:
- All students who receive Youth Allowance, will receive a $2 254 start up scholarship every year. ($1434 in 2010)
- The parental income test will be raised so that families with two children studying away from home can earn more than $140 000 before their allowance is cut completely.
- Students who choose to move to study may be eligible for an additional relocation scholarship, worth $4 000, in the first year of study and $1 000 each subsequent year.
- From 1 July 2012, students will be able to earn $400 a fortnight (up from $236) without having their payments reduced.
- The age of independence will reduce progressively from 25 years to 22 years by 2012, which will see an estimated 7 600 new recipients of the independent rate of allowance.
