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Small Step in Right Direction

Otago Polytechnic Students' Association,
PO Box 5381, Dunedin, tel/fax 477-6974

Media Release
Thursday, May 27, 2004

Small Step in Right Direction

Students today welcomed some changes to the living allowance entitlement thresholds (of parental income) that will see 36,000 students suffering less parental means testing on their allowances. These thresholds have not been adjusted for inflation since their introduction. Today's new thresholds are however lower than inflation*.

"The changes are great news for those students who will now be entitled to a living allowance, but to be honest students are no better off than when the system was first introduced as these changes barely even cover inflation" said OPSA President, Rachel Dibble.

The new mechanism of annually adjusting thresholds to match inflation is welcomed. "The lack of an adjustment mechanism was inherent flaw in the original scheme, so while the thresholds are still far too low it's great to see this mechanism now in place" said Ms Dibble.

It is also unclear how much of an actual improvement the 36,000 affected students will receive. Students whose parents earn between $28,080 and $33,696 will now be able to receive a full allowance. "But how many will get a real living allowance compared to how many will only get a few dollars more per week?" asked Ms Dibble.

The proposed changes are a far cry from the universal living allowances students have been nationally calling for since they were removed in the early nineties. "It's good to see years of campaigning have resulted in some small changes, but living allowances are the main barrier to tertiary participation and Labour once promised them so it's devastating to see they are no longer part of their plan" said Ms Dibble.

Ms Dibble also attacked the mean spirited removal of the independent circumstances grant and married couple grants on the ground that they were discriminatory. "Labour has taken away people's entitlements as a means of addressing this supposed discrimination rather than addressing the real discrimination of means-testing 25 year-olds allowances against their parents' income" said Ms Dibble.

Ms Dibble summed up the budget as "a step in the right direction, but students are so many steps behind it is far from enough".

*Inflation 1992 - 2004 (Reserve Bank) is 25.1%, so to adjust for inflation a 50,572 income threshold should be 63,268 in 2004, and a 28,080 income limit should be $35,130.


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