Category: Welfare

Should students be considered ‘independent’ of parents?

~ Andrew Norton ~ 18 Comments

A bit of a debate is raging in the Youth Allowance post about how dependent students are on other members of their family. Sinclair points out that most 15-24 year olds live with their parents. Based on a mix of census and DEST data, I have estimated in the past that around 60% of late teen uni students live with one or both parents. Of those at home, they are an affluent bunch: median household income is $104,000 a year.

But how much sharing goes on within the household? The AVCC/Universities Australia student finances survey asked this question, referring to parents and partners. For ‘often’ relying on non-cash assistance, for full-time undergraduates:

Meals: 60%
Accommodation: 58%
Telephone: 53%
Use of car: 31%
Clothing: 20%
Textbooks: 28%

38% of full time undergraduates classed themselves as ‘financially independent’.

The 2006 General Social Survey found that of the people who had children aged 18 to 24 living away from home, 58% provided them with support: Continue reading “Should students be considered ‘independent’ of parents?” →

Reforming Youth Allowance

~ Andrew Norton ~ 37 Comments

This weekend the Fairfax broadsheets have been pushing student welfare issues. The SMH focuses on the issue of accommodation:

HUNDREDS of university students are living in conditions so poor they are technically homeless, although they remain hidden in statistics on youth homelessness.

Though the reason they are not appearing in the homelessness statistics is that ‘technically’ there are not homeless at all, but instead lack a permanent home. It doesn’t make for quite as good a media beat-up, but a problem nonetheless.

The Age looks at some possible solutions to the issue of student income, including paying students the same as the unemployed, and HECS-like loan.

Having spent some time this week examining these issues, I agree entirely that the student income support system is a shambles. In fact, it is a far bigger mess than the media is reporting. There are at least five different programs supporting students: Youth Allowance, Austudy, Abstudy, FTB A and Commonwealth scholarships.

Youth Allowance and FTB A both provide welfare for families with full-time students aged 24 or under, with the student getting the entitlement under YA and the parents under FTB A. The same household cannot claim both. Though eligibility for YA stops at much lower household income than FTB A, for families earning $50-60,000 a year the student would be better off forfeiting his or her YA, and getting FTB A cash from his/her parents instead. This would also let them take advantage of the FTB A child earning threshold being much more generous than the YA personal income test, where effective marginal tax rates of at least 50% start at $118 a week.
Continue reading “Reforming Youth Allowance” →

Family finances under familism

~ Andrew Norton ~ 32 Comments

My blog suggestion yesterday that ‘working couples with children’ deserve ‘much less’ welfare assistance attracted some questioning in the post’s comments. NPOV asks

is this from the starting point that you believe almost everyone deserves “less”, and couples with children deserve “much less” because they already get more than everyone else?

Certainly my starting point is the classical liberal one that people are entitled to keep their earnings unless there is some strong reason to tax it away from them. Among the reasons given for taxing, redistribution of cash to families seems to me to be among the weakest. It is not specifically aimed at meeting any need that is generally agreed upon, such as for education or healthcare. It is given to people with incomes that are well above average, who are quite capable of giving their children food, clothing and shelter without any outside help at all.

Though some family welfare meets genuine needs, much of it is redistribution between family types irrespective of need. Recent years have seen a significant improvement in the financial position of families relative to single people and couples without dependent children (though people in the latter still generally have the most to spend on themselves).
Continue reading “Family finances under familism” →

First signs that familism has limits?

~ Andrew Norton ~ 13 Comments

The previous government was extraordinarily generous to families.  According to calculations I did from Treasury’s Intergenerational Reports, the FTBs alone increased, in per person terms, 29% per person between the 2002 and 2007 reports. And that’s not counting the baby bonus or childcare handouts.

Yet according to the 2007 Australian Election Survey, only 41% of respondents thought that the Howard government had become more generous over the last 10 years to ‘working couples with children’. 23% of Australians, who must have been holidaying on another planet during the Howard era, even thought that they had become ‘tougher’ on these working families.

But in this familist time, is there any end to the demands of ‘working families’? According to the AES, 49.5% of respondents agree that ‘working couples with children’ deserve more or much more from the social welfare system. My answer, that they deserve ‘much less’, is supported by a miserable 0.8% of respondents. Even the answer that they deserve ‘less’ support has only 4.5% support. And I thought I had a tough task selling higher education reform.

But some hope comes from this morning’s Newspoll reported in The Australian. About two-thirds majorities support means testing the baby bonus and FTB B, and 57% support means testing childcare tax rebates. And there is majority support for the testing to begin at $70,000 a year, which if based on household income would start to make some serious savings.

Of course I think these savings should be directed to tax cuts, which would in part benefit those same families. Yet this Newspoll, like other recent polling on the subject, finds that support for tax cuts drops (in this case from 66% to 36%) if respondents are told that tax cuts might cause interest rates to increase. But tax cuts financed from reduced family spending ought to be neutral for interest rates, since the total amount ending up in consumers’ pockets will be the same.

Does paid work undermine the university experience?

~ Andrew Norton ~ 11 Comments

In January I was sceptical, based on studies of student work and academic results, that increasing Youth Allowance to reduce work hours would pay academic dividends.

The first results (pdf) from the Australian Survey of Student Engagement reinforce the conclusion that the average 15 hours a week that undergraduates work for money is not a cause for concern.

The ASSE is based on a questionnaire (in the pdf above), with the questions grouped for analytical purposes according to six scales: academic challenge, active learning, student and staff interactions, enriching educational experiences, supportive learning environment, and work-integrated learning.

It found that, with the exception of work-integrated learning, only those working more than 30 hours a week off campus showed lower results in the various scales. For work-integrated learning those working more than 30 hours did better. Working on-campus was consistently a benefit.

The main reason, I suspect, is that the student lifestyle typically isn’t that busy by the standards of the professional and managerial jobs most students are headed towards. The ASSE finds that more than half of students report spending less than 10 hours a week preparing for class (unfortunately this question is a a bit ambiguous – the prompt is ‘studying, writing, doing homework or lab work, analysing data, rehearsing or other activities’ – which leaves it unclear whether essays or major assignments would be included). Say 15 hours in class, 15 hours at work, and 10 preparing for class, and you have a not very stressful 40 hour week.

This is just a summary report of the ASSE. The questions asked would let us create student timetables covering paid work, class preparation, and campus activities, and compare those with self-reported grade averages. It would be a useful addition to a debate dominated by intuition and anecdote to know more about the relationships between these variables.

Would more student income support improve academic results?

~ Andrew Norton ~ 38 Comments

In addition, I’m not convinced that if all university students in Australia received free education and enough income support to live comfortably that the majority would spend all that extra time studying.

– backroom girl this morning.

In her doubts, backroom girl goes against some higher education orthodoxy. 43% of Australian students in a survey released last year agreed with the proposition that ‘work commitments adversely affect my performance in university’. The Vice-Chancellors have called for more Youth Allowance to ‘ensure optimal educational outcomes’.

It certainly seems plausible that if students worked fewer hours they might optimise their educational outcomes. But like many plausible-sounding ideas in higher education, the evidence for it is mixed at best.
Continue reading “Would more student income support improve academic results?” →

Is the education rebate the FTB of the future?

~ Andrew Norton ~ 4 Comments

Labor’s education rebate, under which recipients of Family Tax Benefit A can receive

* A 50 per cent refund every year for up to $750 of education expenses for each child attending primary school (maximum $375 per child, per year)
* A 50 per cent refund every year for up to $1,500 of education expenses for each child attending secondary school (maximum $750 per child, per year)

will no doubt go down well in the electorate. I’m much less keen. It is another example of the government taxing us more than necessary and then giving the money back with strings attached, in this case a requirement that money be first spent on ‘laptops, home computers, printers, home internet connection, education software and school text books.’

Most families will spend this much and more on items on the list anyway, so the distorting effect is likely to be small in this case – it’s effectively just another cash handout for families in exchange for yet more government paperwork (Labor says it will reduce the ‘digital divide’, but this seems unlikely since families still have to find the cash to cover the full cost since they only get the rebate with their tax return, more than twelve months later if they purchase at the beginning of a financial year).

But how long before more of the FTB-linked money starts coming with strings attached, so parents spend the money as approved by Nanny – no fattening foods, no cigarettes or alcohol, no plasma TVs, no clothes made in sweatshops, no coal-generated electricity etc etc.? The current government is bad enough on these things, but Labor is full of busybodies who think they know how the rest of us should live.

Second-rate rent seeking

~ Andrew Norton ~ 6 Comments

The Australian Vice-Chancellors’ Committee may have changed its name to Universities Australia, but so far at least nothing else seems to have changed. Their recent media releases contain more of the second-rate rent-seeking that has long marred the organisation’s public advocacy.

Last week, in their tradition of ‘good first step’ reactions to government initiatives, they welcomed a small extension of student income support and issued a media release repeating their call for:

“Firstly all scholarships and bursaries (regardless of their source) to be excluded from assessable income for the purpose of student income support; and

“Secondly, a reduction in the age of independence for Youth Allowance from the current 25 years to 18 years over the next term of parliament,”

There is no mention (and nor was there when the proposal was first made in August) of how much these changes might cost, how important this proposal is compared to other higher education spending options (let alone other alternative uses of the money), or other implications of the changes.
Continue reading “Second-rate rent seeking” →

A racist ticket policy?

~ Andrew Norton ~ 2 Comments

As reported in this morning’s Age, the Victorian government has introduced legislation to ensure overseas students cannot successfully use equal opportunity laws to receive public transport concessions. There is a case before the Victorian Equal Opportunity and Human Rights Commission alleging the policy that allows domestic but not international undergraduates to receive concessions discriminates on the basis of race.

I had an opinion piece in Education Age earlier this year arguing that the concessions should not be granted. In her second reading speech, Transport Minister Lynne Kosky makes similar points:

Providing transport concessions to private full fee-paying overseas students would be very costly. The money used to pay for extending the scheme to these students would have to come from another area of budget and could impact on other service improvements if the entitlement was granted. In addition, it would be inconsistent with the terms of the students’ entry into Australia. When private full fee-paying overseas students gain a visa to study in Australia, they must demonstrate that they are already fully self-sufficient and able to meet all their living expenses, including public transport expenses, while they are here. The students are required to pay substantial fees to study for their degree and, at the same time, they are also not eligible for benefits such as Medicare, Newstart allowance or Austudy. Unlike Australian citizens, permanent residents and students with refugee status whose intention is to live and work In Australia on an ongoing basis, there is no expectation that private full fee-paying students will continue to live in Victoria beyond completing their education.

Pretty clearly this was not, in any case, an instance of racial discrimination. Continue reading “A racist ticket policy?” →

Could improved Youth Allowance undermine rural campuses?

~ Andrew Norton ~ 41 Comments

An editorial in today’s Age follows on from yesterday’s story about would-be students from regional areas being more likely to defer their university studies to improve their Youth Allowance eligibility.

The editorial draws attention to both the claimed under-funding of regional campuses and the added costs faced by regional students when they have to move to study, calling for an inquiry but effectively suggesting both receive additional Commonwealth resources. Yet there are tensions between improving income support for rural students and helping rural campuses.

I don’t believe that there is any inherent reason why educational delivery costs should be higher in regional areas. The problem seems to be achieving economies of scale by spreading fixed costs over a large number of students. That’s been hard to do for several reasons: low initial population density in regional areas, weak school results limiting the pool of potential applicants, and the preference of many students for study in capital cities.

In Victoria, there is only one truly regional university, the University of Ballarat (though Deakin University has a substantial regional presence, and other universities have rural campuses). The Victorian Tertiary Admissions Centre provides statistics for each university by the home region of applicants. 35% of applicants to Victorian universities from the Central Highland region where the University of Ballarat is located gave it as their first preference in 2005 for academic year 2006. So about two-thirds of potential local students actually want to go somewhere else – except for Swinburne, applications are spread fairly evenly across the other Victorian universities.
Continue reading “Could improved Youth Allowance undermine rural campuses?” →