House of Representatives

Second Reading Speech

Mr FLETCHER (Bradfield - Minister for Communications, Cyber Safety and the Arts)

I move:

That this bill be now read a second time.

This bill is being introduced to implement a measure announced as part of the 2019-20 budget. The government announced that it would extend family tax benefit to the families of Abstudy students who board away from home to attend secondary school. Currently, family tax benefit stops when an Abstudy student turns 16. Changes introduced by this bill will support families of Abstudy boarding students by continuing their eligibility to receive family tax benefit until their child completes secondary school. It will support more Indigenous students to complete year 12 and is consistent with the government's focus on closing the gap in educational attainment between Indigenous and non-Indigenous students.

Under current arrangements, once an Abstudy boarding student turns 16 they no longer receive family tax benefit. This can create a perverse incentive for families to retain family tax benefit by removing their child from boarding school. This is not aligned with supporting Indigenous students completing year 12.

Many remote communities have no local secondary school, so boarding is frequently the only option for children to attend secondary school. However, Aboriginal and Torres Strait Islander boarding students are disproportionately dropping out of boarding education around the age of 16. Data from the Department of Human Services shows that the number of Abstudy boarding students drops by approximately 60 per cent between the ages of 15 and 17.

The Prime Minister's 2019 closing the gap address to parliament emphasised that for Indigenous students in remote and very remote areas access to quality education can be a lifeline to future prosperity and wellbeing. This statement echoed the views of the House of Representatives Standing Committee on Indigenous Affairs in its 2017 report on Indigenous education, which stressed the importance of education but found room for improvement in the support of Indigenous boarding students.

Amendments introduced by this bill will build on the 2018-19 budget measure '50 years of Abstudy', which improved assistance for Indigenous secondary students who need to study away from home. This included better, fairer and more flexible travel provisions and the portability of Abstudy benefits if students change schools. This bill will extend family tax benefit to eligible secondary students aged 16 years and over who receive Abstudy assistance to study away from home. These changes will commence on 1 January 2020 subject to the timing of the passage of this bill.

Extending family tax benefit to Abstudy boarding students is consistent with broader family tax benefit rules. It also aligns with recommendations from the 2014 Forrest review Creating parity. The Forrest review recommended that Indigenous families with children at boarding school have access to family tax benefit payments until students finish year 12 in recognition of the costs parents incur for their children.

Currently, families of Indigenous boarding students aged under 16 are generally eligible for both Abstudy and family tax benefit. Abstudy for these students is paid directly to the school and boarding provider to cover tuition and boarding costs, while family tax benefit is paid to the family to help with the cost of raising children. Families rely on family tax benefit to assist them with the ongoing costs of their children's daily incidentals while they are away at school, such as clothing, toiletries, medicines and pocket money, as well as their essential living costs when they are at home during school holidays. Once the student turns 16, family assistance legislation precludes Abstudy students from receiving family tax benefit, leaving families with no assistance for the cost of everyday essentials for their child.

The loss of family tax benefit when a boarding student turns 16 is a significant drop in income support for families, which can be as much as $6,900 per year. This contributes to financial pressure for families at a critical stage in a young person's education. It can also create a disincentive for families to continue sending their child away to school and attain a year 12 qualification. This puts the student's performance and completion of secondary school at risk. This is not ideal. The students who complete school are in a much better position to transition to work in adulthood.

Modelling using the priority investment approach shows Abstudy students who stay in boarding for their senior schooling are less likely to need income support in the future. On average, within five years of leaving school, Indigenous young people who study year 11 as boarding students are projected to have income support costs that are 38 per cent lower than those of their peers who leave school early. This modelling shows that these students do better in the long term compared with Indigenous young people who drop out of school early. For example, ten years after leaving school, Indigenous young people who drop out early are:

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one third more likely to be on an unemployment payment, and

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25 per cent more likely to be a young mother on income support.

The priority investment approach modelling suggests that an increase in support for young Indigenous Australians to complete year 12 would lead to longer-term benefits for income support outlays.

Changes introduced by this bill will mean that from 1 January 2020 families of Indigenous boarding students will stay in the family tax benefit system until their child reaches the end of secondary school. Eligible families of boarding students aged 16 years and over can receive both Abstudy for school and boarding fees, and family tax benefit to assist them with the ongoing costs of raising the child. These improved payment arrangements will better reflect the needs of remote Indigenous families with children studying away from home.

The families of more than 2,000 Indigenous secondary students will benefit from these changes. On average, these families would receive an additional $5,911 per year.

Through these changes the government is delivering an additional $36.4 million in support over the next four years. This investment will increase the proportion of Indigenous students who complete year 12 - improving their work prospects and lifetime wellbeing, and reversing the potential costs to the community that come with long-term unemployment and welfare dependency.

This investment is an addition to the investment of $38.1 million over five years, contained in the 2018-19 budget measure '50 years of Abstudy'.

By providing additional assistance to Indigenous families who do not have access to local secondary schools, changes brought about by this bill will help close the gap and address recommendations from the Forrest review and the House of Representatives Standing Committee on Indigenous Affairs' report on Indigenous education.

I commend the bill to the House.

Debate adjourned.