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Youth allowance system unfair to youth

Comments on Bruce Chapman “Australia: youth allowance gets a fair go”, 5/06/2009, http://www.eastasiaforum.org/2009/06/05/australia-youth-allowance-gets-a-fair-go/

While Chapman, as a consultant to the 2008 review of higher education, which recommended most of the changes adopted by the Government, states that "the result is increased fairness in a system established to allow greater access to higher education for poorer students", it is arguable whether such a system is fair or not.

Why should poorer students be financially advantaged over other students for receiving higher education if both categories of students have the alternative opportunity to work at their ages? If they are working age, why should their parents’ income should still be tied to their wellbeing?

I think a scheme similar to the past HECS system to provide financial assistance in the form of loans is much fairer than the reformed Youth Allowances. If one takes the view that a person’s life time earnings will be higher after completing higher education, than it is fair to everyone that person pay for his/her higher education out of his/her higher income when it is earned latter on.

Of course, when people are young, they don’t have the financial capacity themselves, so the government can provide an equal access opportunity to all prospective young people if they wish to study higher education by providing a bridge loan for living during their study.

The interest from such a loan can be a little higher than that for HECS, but should be lower than commercial loans. So government smooths the income stream or cash flow of those who undertake higher education, but the main costs are still paid by them when they make higher earnings after their study.

Such a system will provide an equal opportunity to every young person to access higher education, won’t they?

Why don’t we implement a better system that is fair to everyone rather than create new inequality among the young? We need to take a broader view and have a fundamentally different approach to social welfare.

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