The future shape of AUSTUDY: Practical and policy implications of the recent proposed changes

Author/editor: Schwab, RG, Campbell, S
Year published: 1997
Issue no.: 140


ABSTUDY, the Aboriginal Study Assistance Scheme, is one of the most contentious special programs in Indigenous affairs. In May 1997 the Howard Government announced a number of changes to ABSTUDY, including substantial reductions in funding by fiscal year 2000/01; these changes are to go into effect from 1 January 1998. This paper has been prepared to provide an overview of the announced changes and speculate on some of the possible outcomes.

Nationally, the number of ABSTUDY participants has fluctuated only marginally over the past several years, increasing from 40,813 in 1988 to 48,769 in 1996. Expenditure on ABSTUDY grew from $81.1 million to $121.6 million during this same period. Calculated in 1988/89 dollars, expenditure between 1988 and 1996 increased 12 per cent while the Consumer Price Index increased by 34 per cent. As part of the announced ABSTUDY changes, the Government has projected reductions in outlays of $38.7 million by fiscal year 2000ö01. Even with low levels of inflation, the proposed cuts to ABSTUDY represent a significant drop in Government expenditure.

Overview of the announced changes

Effective 1 January 1998, ABSTUDY benefits will be subject to a range of additional restrictions:

  • Living Allowance: where ABSTUDY had employed a 'sudden death' cut off, from 1998 the cut-off will be replaced by an abatement scheme with a threshold well below current cut-off levels.
  • Additional Incidentals Allowance: there is currently no limit to the allowance (except for Masters and PhD students for whom a $2,000 limit applies). From 1998, the allowance will be capped at $2,000 for all students.
  • School Fees Allowance: beginning in 1998, the applicant (or the partner of the applicant) must qualify for Government assistance to be eligible for this allowance.
  • Fares Allowance: travel interstate for certificate or enabling courses will no longer be allowed; compassionate travel will be limited to two return trips per year; travel home will be restricted where the student has brought dependent family members to the place of study; and fare assistance to attend a graduation ceremony will be restricted.
  • Eligibility and awards: from 1998, students will be eligible for ABSTUDY assistance for only one undergraduate and two postgraduate courses.
  • Away From Base Assistance: from 1998, this assistance will be restricted to a maximum of two return trips of no more than four weeks duration per year. Courses composed wholly or substantially of Away From Base components will no longer be eligible for coverage under ABSTUDY.

Considerations for the future

It is impossible to project the full impact of the announced changes at the present time; necessary data on current participants are not accessible and figures for Indigenous enrolments will not be available until well after the changes have gone into effect. Some predictions are possible, however. For example, while DEETYA staff have estimated that 550 students would be affected by the changes to the Away From Base component of ABSTUDY, research undertaken for this paper indicates that as many as 868 students in eight universities across 11 campuses could be affected immediately by these changes in the State of New South Wales alone.

The authors conclude that there is a serious disjunction between the Government's announced commitment to improving educational outcomes for Indigenous Australians and reductions in a program developed specifically to improve the educational and employment prospects of a socially and economically disadvantaged segment of the population. From a policy perspective, it is puzzling that plans to pare back a program that many would argue has been instrumental in increasing Indigenous access and participation in education were announced before the Government's formal review of the program had been started, let alone completed. Further, the lack of detail on cost savings and the absence of any educational rationale leaves a distinct impression that this is an ideological and politically-driven exercise rather than one based on sound educational or economic principles. The issues are not merely political ones. If Indigenous access to education is impeded, participation will decline. If participation declines, employment opportunities will likely decline as well. If employment opportunities decline the social welfare bill, and associated negative externalities for Australia, will increase.

ISBN: 0 7315 2575 2

ISSN:1036 1774

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