Austudy fraud case flawed

January 20, 1995

Geoff Maslen's report "Asians find 'study for free' loophole in Australia" (THES, December 16) mentions a study I co-authored about uptake rates of Austudy, Australia's government-financed support scheme for less affluent secondary and tertiary students, and deferral rates in paying tuition fees.

Mr Maslen suggested that some Asian-born recently arrived permanent residents are "defrauding" the Australian government in their use of Austudy, but our study makes no attempt to put this case.

Austudy is strictly means-tested against family income. Some recipients become eligible for Austudy because of their families' capacity to arrange their affairs in such a way as to reduce taxable income. Income-reducing schemes are available to any Australian or other permanent resident with the exception of wage earners whose income and tax arangements tend to be transparent.

Many students from Hong Kong entered Australia under the "business migration" scheme, which required their families to bring A$500,000 (Pounds 250,000) into the country. Educational opportunities for their children were significant factors in their migration decisions. Their children become eligible for Austudy because of age and living away from home concessions, as well as their families adopting quite legal tax-minimisation practices.

Many of the parents of Hong Kong Austudy beneficiaries received overseas' income which the tax authorities are unable to assess. Perhaps by this means the children of some relatively high-income families are able to receive the benefit. This is more a problem of assessment than fraud.

Ian R. Dobson Monash University Melbourne Australia

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