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Budget has no answers for young people

November 19, 2011

Budget has no answers for young people

Sunday, May 17, 2009 – 10:00
By Tim Dobson & Jess Moore

Labor delivered its budget on May 12 in the context of Australia’s slide into recession. With the economic crisis hitting hard, young people are one of the most vulnerable groups in society.

The budget delivered young people many losses and a few small gains. Overall, it doesn’t resolve any of the fundamental issues facing youth today.

In particular, the budget failed to take necessary action on youth unemployment, student poverty and the environment.

Education and training

For students, the budget gives a funding rise of $491 million over four years to provide 50,000 extra university places. The government budgeted $433 million to encourage universities to enrol more students from low socioeconomic backgrounds.

Overall, $2.7 billion has been allocated for tertiary education, research and innovation. This still falls far short of the $6.5 billion called for in December by the government’s own Bradley Review into higher education.

Another $2.4 billion has been granted to fund “business innovation” in education and for new university infrastructure.

In March, the government announced changes to the Commonwealth Grants Scheme for higher education. The scheme gives out federal funds for each field of learning based on overall student numbers.

Under the changes, funding will now be based on the number of individual students enrolled in each course. This will encourage universities to pack as many students into courses as possible. Universities will be under pressure to close down courses with fewer students.

Each university will be forced to compete with one another for the “student market” to get more funding.

The rise in funding is tied to this new market model of funding for higher education.

In addition, one of the key reasons young people, particularly those from poor backgrounds, struggle with access to higher education is the low level of income support received while studying. The budget does not address this enormous problem.

The maximum rate of youth allowance and rent assistance combined, for a single person living away from home, is currently $482.60 a fortnight.

Youth allowance falls woefully short of the Henderson Poverty Line. The line calculates the amount of money individuals and families of different sizes need to cover basic living costs.

For the December 2008 quarter the poverty line was $415.06 a week for singles working or studying. For the unemployed who are not looking for work the poverty line was $336.56 a week.

Under the new budget, the rate of Youth Allowance will remain 28-42% below the poverty line!

Unemployed abandoned

Through its treatment of the unemployed and underemployed, the budget will harm young people even more.

Recent unemployment figures are horrific for young people. A May 7 ABC Online report said despite a 2% drop in teenage (aged 15-19) unemployment to 22.8% in April, “there are currently 68,000 teenagers aged between 15 and 19 looking for full-time work”.

It is estimated that 300,000 people aged 15- 24 are looking for full time work. In an April report, the OECD predicted the youth jobless rate will rise twice as fast as adult workers during the economic crisis.

This means youth unemployment could reach 20% — or around 600,000 people aged 15-24 without work. These figures do not include those who are underemployed: those who work but want or need to work more hours.

The budget predicts there will not be enough jobs for the Australian population, with unemployment set to peak at 8.5% in 2010-11. Despite this, the government has abandoned unemployed and underemployed youth by not increasing Newstart allowance.

The highest maximum payment a single person on Newstart and rent assistance can receive is $282.25 a week. This is 16-32% below the poverty line. The payment is also scaled based on age, so younger people receive less than this amount.

John Falzon from the St Vincent de Paul Society told the media on May 13 the budget means “those who were demonised in the past have emerged as the forgotten people again”.

The economic crisis has blown apart the right-wing argument that unemployed people are lazy dole bludgers. Yet the government is ensuring those who are unemployed, due to no fault of their own, will stay trapped in poverty.

The budget punishes the unemployed while it fails to deal with the reasons why so many young people will become jobless.

It’s not because of a lack of training of young people, it’s because there just aren’t enough jobs available. Businesses aren’t hiring, because it’s not profitable for them to do so.

This is a market failure of epic proportions. The market is not offering jobs to young people, let alone jobs that are socially useful. The solution is for the government to step in and fund well-paid, socially useful jobs for young people.

Climate change

There is nothing more urgent than dealing with the climate crisis that threatens humanity. The government announced $3.5 billion of new spending dedicated to what it called “clean energy”. Yet $2 billion of this will be spent on the fiction of “clean coal”.

In reality, we need to end burning coal as fast as possible to ensure a safe climate.

To make the shift to a sustainable, carbon-neutral economy as quickly as possible, we need a national plan based on direct public investment in renewable energy.

Training and employing young people in well-paid “green jobs” must be a central task for any government in the upcoming period.

The government can recognise that there is a “market failure” when it came to building a national broadband network. In that case it stepped in to fund it to the tune of $43 billion.

Climate change is a far bigger issue than fast internet. Government intervention is necessary is to avert climate change. It must create new sustainable and job-rich industries.

This way young people could be guaranteed a job, and an inhabitable planet.

From GLW issue 795

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