Second Reading – more generous means testing for youth payments

Tuesday, 20 October 2015

Mr PITT (Hinkler) (10:28): One of the major impediments for young people wanting to further their studies after finishing high school is the cost of living away from home, particularly if you live in a regional area. In my electorate of Hinkler, youth unemployment is extremely high, and the median weekly family income is just $832. For many young people, their parents do not earn enough to support them through university but they exceed the asset test thresholds for receiving government assistance through Centrelink. They may be the eldest child and their parents are still caring for another two school-aged children at home. They could get a part-time job. But, depending on the course they want to undertake, their study requirements may prevent them from working enough hours to cover even the basic costs of rent, food, transport and utilities. Personally, when I finished school I delayed going to university because I knew the costs would have made things difficult for my parents, my three younger brothers and their family business. Instead, I opted to apply for an electrical apprenticeship—probably the best four years of my life. It was a great opportunity to gain a trade. I saved enough money during those four years to move to Brisbane to study engineering at the Queensland University of Technology, and I worked part time as a lifeguard and on the tools through those four years—on weekends and holidays—to help get me through university. So I am exceptionally pleased to be standing in this place, today, speaking on this bill.

This legislation introduces more generous means-testing arrangements for youth payments to help support regional children who are transitioning from school to tertiary education. We are removing the family asset test and family actual means test from the youth allowance parental income test. It will base the assessment of a young person’s access to youth allowance on a fairer measure of family income.

Removing the asset test will enable around 4,100 dependent Australians to qualify for youth allowance for the first time, accessing average annual payments of more than $7,000 a year. The removal of the means test will see a further 1,200 people receive youth allowance, for the first time, as well as increase payments for around 4,860 existing students by about $2,000 a year. Importantly, the changes will mean farming families will not have farm assets counted toward the test for their children accessing youth allowance.

We are also changing the youth allowance parental-income testing arrangements to include all family tax benefit children in the family pool. The current test only includes children over 16. Counting all children will soften reductions in youth allowance as the family’s income increases. For example, around 13,700 families with dependent children in both the family tax benefit part A and youth systems will be eligible for an average increase in payment of $43 per fortnight or $1,118 per annum. Around 5,800 families who currently miss out on payments, due to higher taper rates, will be eligible for an average payment of around $50 per fortnight or $1,300 per annum. As a former poor student, I know $50 a fortnight does make a difference.

Simplifying the parental means tests will provide additional assistance for working families to support their children make the transition from school to further study. These changes are great news for Hinkler families. It boosts the number of families we assist and the level of that assistance, and it encourages more young people into study to build their careers, develop economic opportunities and contribute to our economy. Most of these changes will come into effect from 1 January next year, and some on 1 July next year and 1 January 2017. Hinkler residents can get more information and find out whether they are eligible by contacting Centrelink.

Earlier, l mentioned youth unemployment. This government is doing everything it can to help young people gain new skills and find a job. I understand there are several challenges to gaining employment, in the Hinkler electorate, including a lack of job vacancies and a high number of applicants. But I am a firm believer that young people should be earning or learning. Developing skills and qualifications can help job seekers stand out in what is a highly competitive jobs market. Employers who are seeking to fill a specific role say they, typically, have to recruit from outside the region because they cannot find locals with the required skills. That, to me, is deeply disappointing. Other employers say they are willing to train people and give them the skills, but they struggle to find people who show up on time dressed appropriately and willing to live without their smart phones for a few hours.

Through Work for the Dole, the National Work Experience Program and Green Army, job seekers are learning important skills while contributing to their communities. We have reinstated the Howard government’s ADF gap year. The number of young Hinkler residents applying to join the Defence Force has increased, significantly, in recent years.

The 2015 budget included $330 million for a youth employment strategy to help young people transition from school to work. Young job seekers who find a job and stay off welfare for 12 months will receive a job commitment bonus of $2,500 and a further $4,000 at 24 months. We are providing concessional trade support loans of up to $20,000 and spending $200 million, each year, to lift apprenticeship completion rates. We are also providing up to $9,000 to help people relocate to take up jobs. I know that young people often have to leave the region to get qualifications, skills and experience. But sometimes the local opportunities are overlooked. I have spoken to vice chancellors of Central Queensland University and the University of the Sunshine Coast who are moving into the region.

In my maiden speech I raised concerns about the exodus of talented young people from regional Australia. This bill will help address those matters, substantially. I commend the bill to the House.

Debate adjourned.

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