Australian students face funding cuts

A series of new laws and budgetary measures implemented by the Australian government are set to increase costs and debts of students in the country, this despite an economy that has not seen two successive quarters of negative growth in 20 years.

The changes include the delay of Youth Allowance benefits to postgraduate students for another three years, the slashing of a discount for students who pay fees upfront, and the possible introduction of an AUD$250 (£164) compulsory student union fee.

Youth Allowance – government assistance for students – has been expanded with a AUD$265 million (£167 million) package which will see students from inner regional areas access more funds than ever before. However, the Government backpedalled on its election promise to introduce Youth Allowance assistance to postgraduate students in a move described by Labour senator Lisa Singh as “a decision we’ve had to make in order to fund this expansion”.

Youth Allowance will now only become available to postgraduates in 2014, and then to a shorter list of eligible degrees. The announcement has come late for many students hoping to switch to full-time master's degrees at the start of the new academic year in January. President of the Council of Australian Postgraduate Associations, John Nowakowski, expressed his dissatisfaction, saying: “We’re obviously very happy for rural and regional students, but it’s very disappointing that it’s going to come at the cost of Masters-by-Coursework applicants.”

Relocation scholarships for non-regional students will also face cuts, as will start-up scholarships, which helps poorer students pay for the upfront costs of starting university. The rural territory hardship fund is to be scrapped and metropolitan students will face tighter criteria on financial eligibility for Youth Allowance. Fiona Nash MP, shadow parliamentary secretary for regional education, blames poor spending over the past four years, saying: “If the Government hadn’t wasted so much money… they would have had the finance to be able to treat regional students fairly, without having to go delving into other areas.”

The new federal budget also detailed plans to halve a discount for students who pay their fees upfront. The Higher Education Contribution Scheme (HECS) was introduced in 1989 and sees students pay off their university fees through taxes, sometimes at up to 8 per cent of income. Although HECS has no interest charge, the debts increase with inflation. Currently, students who are able to pay fees upfront receive a 20 per cent discount, saving them up to AUD$3,000 (£1,963) per year – a discount claimed every year by 100,000 students seeking to avoid a greater tax burden upon graduation. Many students and their parents save up in the years prior to university to receive this discount.

Cutting the discount to 10 per cent will save AUD$479.5 million (£314 million) in underlying cash across four years. But with the current public HECS debt already at AUD$18 billion (£11.8 billion), Michael Gallagher, executive director of the Group of Eight – a coalition of Australia’s leading tertiary institutions - called the reduction “inconsistent with reducing the budget deficit because it denies a revenue flow to the government from those who can afford to pay.”

The introduction of compulsory student unionism, a move currently under debate in the Senate, would see each student paying AUD$250 (£164) regardless of their actual involvement in unions, clubs and societies. Speaking in the Senate last Monday, Senator Abetz, shadow minister for employment and workplace relations, described the proposition as “a huge financial impost for students”, adding: “The reason I can say that is that the government, in lockstep with introducing compulsion, has introduced a loan program so that students can actually borrow money to pay this compulsory fee and then pay it off once they are working.”

Francesca Newton, a fourth year arts student at Melbourne University, works part time and lives at home to support herself through university. She expressed her opposition to proposal, saying: “My university has a non-compulsory union fee of AUD$100 (£65) that I don’t pay – I couldn’t afford to.”

Supporters of compulsory student unionism argue that the introduction of the fee will give more funds to student support services and will allow a higher quality of student engagement.

James Graham, president of Bond University Student’s Association, believes the introduction of voluntary student unionism in 2006 saw fewer funds available to various sporting and cultural clubs and societies within the University, saying: “The introduction and adoption of this (compulsory) fee by Bond would result in an across the board improvement in our student experience.”

Opponents to the fee say it is inconsistent with the changing nature of Australian university campuses. Many students live at home during university – due in part to the geographic expanse of the country - and so have minimal campus interaction.

The rise of online degrees also means that many Australian students do not actually use campus facilities, but would still see them out of pocket for the union fees.

“Students nowadays go to university for lectures and tutorials and then leave campus. The old days when you had to be on campus for all your activities – educational and social – are well and truly gone,” says Senator Abetz, adding: “One of the worst features of compulsory student unionism is that it is like a poll tax: every single student has to pay an equal amount, irrespective of their capacity to pay.”