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Over the weekend, political junkies were paying close attention to the NSW Labor conference — but something pretty big was happening at the same time in Queensland, where the Liberal National Party convention voted to push for the scrapping of Abstudy.

Abstudy is a Commonwealth program that “provides help with costs for Aboriginal and Torres Strait Islander Australians who are studying or are undertaking an Australian apprenticeship”. Payments vary from $30.40 per week to $529.80 per week depending on circumstance.

At a time of broad bipartisan support for “closing the gap” in indigenous health, education and employment, it is a rather big call for a major party to advocate getting rid of targeted support for indigenous students.

The argument by the Young LNP, who proposed the motion, was that indigenous students should be part of mainstream schemes. Federal MP Paul Neville spoke out against the motion, saying that “we [the LNP] don’t want to be seen as a group of bigots”. The federal Coalition has since rejected the Queensland LNP’s decision to oppose Abstudy.

There is nothing inherently wrong or bigoted with maintaining that a particular population subgroup within a country should have access to the same services as others. On the face of it, abolishing Abstudy has a certain appeal and a degree of logical consistency.

However, arguments for getting rid of Abstudy should be exposed to proper scrutiny.

Analysis of the best data that we have suggests there are quite large benefits of education to indigenous people. Around 40% of indigenous people aged 25 years and over who have neither completed year 12 nor have a post-school education were employed in 2008. For those who have completed year 12 (but don’t have a post-school qualification), this rises to around 68%. Around 71% of those with a certificate or a diploma were employed, rising to 83% for those with a degree.

For those who are employed, income is also higher as education increases. Average weekly income in 2008 was $715 for those with no year 12 and no post-school qualifications, $822 for those who have completed year 12 but have no post-school qualifications, $891 for those with a basic qualification, and $1184 for those with a degree.

Not all of this difference will be down to education. Those with higher levels of education tend to have other favourable characteristics. However, a large proportion of the difference is likely to be the result of education.

Just because an individual benefits from education, doesn’t mean the government should support them. Those who reap the benefits should also pay the costs. However, there is a stronger argument if there are also benefits to the wider community or future generations.

There is good evidence that there are such additional benefits to improving indigenous education. Indigenous children with well-educated parents have better health outcomes, higher rates of school attendance and a greater likelihood of participating in indigenous cultural events. Furthermore, growing up in an area with high-achieving role models and peers was associated with a higher level of education participation.

Education has benefits for indigenous Australians who study and those around them. The same could be said for all Australians though. Why should there be a special program for indigenous students? Even if indigenous Australians have been disadvantaged historically, so have many non-indigenous Australians. Why not target something like parental education or family income which we know has a large effect on outcomes for children?

The short answer is the government does means-test Abstudy, and other financial support for students. The longer answer is that even after controlling for such observed characteristics, indigenous students are still less likely to complete year 12 or undertake post-school education.

Consider data from the 2006 Longitudinal Survey of Australian Youth, based on a cohort of 14,170 students aged roughly 15 years old. By the time the students were 18 years old, 87% of non-indigenous students in the sample were either still studying or had completed high school. That is, 13% had dropped out. In comparison, 23% of indigenous students had dropped out.

When you look at those indigenous students who do not have at least one parent who is a manager or professional, the dropout rate rises to 28%. While this is higher than the rate for indigenous students of managers or professionals (20%), it is also much higher than the rate for non-indigenous students of non-managers or professionals (21%).

Indigenous youth therefore participate in education at lower rates than non-indigenous youth, and it would appear that this is partly due to financial barriers. However, even once these barriers are controlled for, rates are still lower. There is therefore strong empirical support for targeted assistance to indigenous students.

Does that mean that Abstudy should be maintained indefinitely? No. This issue should be revisited on a regular basis. Abstudy should be subject to the type of critical and robust evaluations advocated by the Behavioural Insights Team in the UK. Until then, an evidence-based — as opposed to a moral — argument would see Abstudy retained and indigenous students continue to receive targeted support in their studies.

Peter Fray

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