Scratch has some basic vector drawing tools and is great for interactive stories
Inkscape is also very good, but I find it too complicated for most primary students. I would also like to mention that PowerPoint 2013, because it's free functionality if you already have office. It has a complete set of vector tools which I'd say are as good as older versions of illustrator. I use it to teach my year 4 students drawing and animation and they love it.