Sun May 5

Students on social work, nursing and teaching placements to get weekly $319.50 means tested Prac Payment from July next year

Written by Michelle Grattan, Professorial Fellow, University of Canberra

A new Commonwealth Prac Payment will provide students with $319.50 a week when they are on clinical and professional placements.

The payment will be means tested and start from July 1 next year, which will be after the next election. Those eligible will include people studying teaching, nursing, midwifery and social work. No cost for the measure was immediately available – the government said that would be in next week’s budget

The money is to help students who often have to give up work to undertake their placements and so are left out of pocket. The government’s Universities Accord report recommended the issue should be addressed, as did the Women’s Economic Equality Taskforce.

Education Minister Jason Clare at the weekend announced a rejig of the indexation arrangements for HELP and related student loans, which will benefit three million people, wiping out some $3 billion in debt.

As well as advancing the Accord agenda, the spending has an eye to the youth vote.

The government says the new Prac Payment will assist about 68,000 eligible higher education students and more than 5,000 VET students each year. The payment is benchmarked to the single Austudy rate.

The payment will be in addition to other income support a student might receive.

Placements are particularly a feature of feminised areas of study and work, and the government is also linking the measure to its gender equality strategy, Working for Women.

Australian Government Clare said: “Placement poverty is a real thing. I have met students who told me they can afford to go to uni, but they can’t afford to do the prac. "Some students say prac means they have to give up their part-time job, and that they don’t have the money to pay the bills.” Minister for Skills and Training Brendan O'Connor said: “This is an additional payment to support nursing TAFE students who have extra costs such as uniforms, travel, temporary accommodation or child care, during mandatory clinical placements”. Tax receipt upgrades, excluding GST, in next week’s budget are set to be about $25 billion over the forward estimates. This is vastly less than the $129 billion average upgrade in the last three budgets. These figures came from the government as Finance Minister Katy Gallagher repeatedly refused to say whether the budget would be contractionary. She told the ABC it “will have a focus on inflation in the short term and growth in the long term over the forward estimates”. While there will be a surplus this financial year, the government says the position for the following years is likely to be weaker compared with the budget update late last year. This is because of smaller revenue upgrades, spending pressures and government investment to drive growth. The smaller upgrade is the result of weakness in the global economy, the slowing domestic economy, the labour market softening, and lower commodity prices. The government plans to bank about 95% of the revenue upgrade in 2023-24, as part of its effort to contain inflation. But it indicates less will be banked in later years. Treasurer Jim Chalmers said: “While our big focus in the near term remains easing inflation and helping relieve cost-of-living strains, it’s critical to also make room for urgent and unfunded priorities and invest in the future drivers of economic growth in the years ahead. "That’s why the May budget will be carefully calibrated to the economic circumstances, striking the right balance between getting inflation under control, easing cost-of-living pressures, supporting sustainable growth and building fiscal buffers in an uncertain global environment.” One significant cost in later years will be the government’s controversial Future Made in Australia program. Gallagher said finding savings was harder in Labor’s third budget. “I think we should be looking at […] not only the aggregate spending, but the quality and composition of that spending. There’s a lot of spending that we’re having to do for terminating programs or legacy issues that haven’t been funded or, you know, unavoidable spending. "You will see some savings, you’ll see some reprioritisation with existing expenditure.”