Ok but what does the 2019-20 budget actually mean for young people

This week, the Federal Government handed down it’s budget. The budget is their final one before the election (which will probably get called very shortly). It’s important to note that the budget won’t become law unless they win the next election.

Also, if you want to read our full and official budget snapshot, you can do so by clicking the button below:


Ok, let’s unpack what was in the 2019-20 budget for young people!

Overall Take:

This was a budget where they essentially flagged their election strategy. So it's incredibly troubling to see the government ignore the key concerns and struggles of young people - Especially after the parliament denied 16 and 17 year olds the chance to vote only last week.

It’s also concerning that a surplus has been projected while people living with a disability, low income earners and those surviving on Newstart and Youth Allowance are doing it tough.


What’s in it:


Income support

The detail:

  • There has been no commitment by the government to raise the rate of Newstart or Youth Allowance leaving thousands across the country to continue to live in poverty.

  • There will be a ramping-up of the data-matching debt recovery system that will save the government $2.1b.

The take:

With people on Newstart and Youth Allowance living hundreds of dollars below the minimum wage and over $200 below the poverty line, we are disappointed to see that the rate of income support will not be raised.

We are also concerned that they’re ramping up ‘Robo-debt” (the government’s automated debt recovery scheme), considering the current system is having a massive negative impact on the lives of many young people.


Mental health

The detail:

  • $461m for youth mental health and suicide prevention.

  • $111m for 30 new headspace services by 2021.

  • $152m to reduce waiting lists for headspace through additional services.

  • $110m to extend the Early Psychosis Youth Services Program for two years.

  • $54m to establish 4 specialist residential facilities for eating disorders.

The take:

Investing in mental health services is a good thing.

If you told us that you were worried about the fact that they think headspace is the answer to all of Australia’s mental health questions, we’d certainly sympathise with you.

Also, there needs to be a greater commitment to provide accessible services in rural and remote areas.


Education and training

The detail:

  • $525m for the vocational education and training (VET) sector, including $200m towards the creation of 80,000 new apprenticeships over the next 5 years.

  • $50.6m on a trial of 10 new school-based VET training hubs in areas of high youth unemployment, and the establishment of a new National Careers Institute to give careers advice to jobseekers.

  • $41.7m over 4 years for a national pilot of two Skills Organisations in the areas of digital technologies and the human services workforce.

  • $93.7m over 4 years for scholarships for students to study at a regional campus of a university or VET provider.

  • $8.5m for 400 new training scholarships to address youth unemployment.

The take:

Notice how we didn’t call this ‘employment’?

In terms of an education and training policy, this is good. YACSA welcomes an increase in training, skills development and apprenticeships - so long as placements are meaningful, non-exploitative and safe.

As an employment policy… Not so much. The latest figures show that there are 23,000 young people looking for work, and only 10,900 jobs available. There are more unemployed young people than there are jobs available, so upskilling unemployed people instead of legitimately and genuinely growing the number of jobs is kind of disingenuous (we’ve talked about this a lot. Check out more by clicking here).


Indigenous young people

The detail:

  • $5m over 4 years to implement Indigenous suicide prevention initiatives.

  • $276.5m over 5 years to support Indigenous students to undertake and complete study to help close the gap in education outcomes between Indigenous and non-Indigenous students.

  • $200m over 4 years to fund additional scholarship placements and mentoring support for Indigenous students.

The take

With alarming suicide rates and experiences of poor mental health amongst Indigenous young people, YACSA is disappointed at the Federal Government's commitment of only $5m to address this significant and urgent social issue.


Domestic and family violence

The detail:

  • $328m over 4 years from 2018-19 towards initiatives to reduce domestic and family violence against women and children.

  • $78.4m to provide emergency accommodation for women and children escaping domestic and family violence and to continue the Keeping Women Safe in their Homes program

  • $82.2m to improve and build on frontline services.

  • $35m to address the specific needs of Aboriginal and Torres Strait Islander people affected by violence.

The take:

This is good.

Increased funding to provide vital services to victims of domestic and family violence is very good and we welcome it.


National Disability Insurance Scheme and support for young carers

The detail:

  • Due to a slower than anticipated roll-out of the NDIS across the country the government has reported an underspend of $1.66b.

  • $84.3m over 4 years to expand support for carers under the Integrated Carer Support Service.

The take:

Disability advocates have argued that the underspend is due to problems accessing the service and not from a lack of demand. Young people not getting the service they need is something that would concern us greatly.


What else is missing?

Young people are being increasingly excluded from the rental and property markets, so we’re disappointed that there was no commitment in the budget to a comprehensive plan to increase the supply of appropriate and affordable housing options for young people.


Note: We didn’t tackle environment/climate change here because it’s a pretty complex issue that goes beyond our expertise.


Do you have a video that can help me make sense of the budget?

Look, we’re as disappointed as you are that this budget produced very few funny and/or quality videos & memes. But this one’s pretty good, and explains some key economic terms, and the politics behind the budget:

 

5 things to know about young people and poverty in SA

 

With the continued prominence of youth unemployment, the casualisation of the workforce and an inadequate income support system that is based on age rather than personal circumstance, young people are experiencing the negative impacts of living on a low income.

 

(Before we begin, thanks to University of Adelaide Arts Internship student Brandon Winter. His research into the effect underemployment is having and will have on young people in SA contributed to this piece).


 

In brief:

  • Young people are finding it increasingly difficult to live week to week on their current levels of income.
     
  • Unstable, casualised employment and woefully inadequate income support payments mean that young people often can’t live independently, have difficulty paying for food, health and dental care, transport, and utility bills and can be locked out of the private rental market.
     
  • Poverty influences an individual’s experience of housing, education, health care, and the ways in which people can participate and connect to their communities. This experience can have a devastating effect on the health, wellbeing, and development of young people in the short and longer term.
     
  • There has to be more investment in policy and programs that address young people’s access to housing, health, transport and cost of living pressures to decrease the short and long-term impacts of poverty.
 

Let’s walk through the 5 key things you need to know about young people and poverty in SA.

 

1. It is incredibly, incredibly difficult to get a job in SA.

 
(ABS July 2018)

(ABS July 2018)

 

Quick facts:

In South Australia, there are currently 49,700 unemployed people competing for only 11,400 available jobs.

The youth unemployment rate in SA is 12%.

That translates to 50,400 people (and 17,900 young people) currently looking for work.

There are only 11,400 jobs available in South Australia.

Entry level jobs have been declining since 2006.

There are simply not enough jobs available for the number of people seeking work.

Here’s a screenshot a young member sent in that shows that 630 people applied for one entry level position in Adelaide:

 
630.PNG
 

 

2. Even if you have a job, underemployment, casual work and insecure employment are massive issues for young people at the moment.

Young people used to be able to rely on full-time or regular part-time employment with industry standard conditions but there’s been a decline in full- and part-time work since the 1980’s. Young workers aged 15 to 24 are also most likely to be underemployed compared to older age groups. The 2018 HILDA survey results found that 31% of workers aged 15-19 and 20% of workers aged 20-24 were underemployed.

Because young people are increasingly having to rely on insecure employment (meaning casual or underemployment), they are experiencing a disproportionally high level of job insecurity when compared with the rest of the population.
 

For example, industries that young people work in are becoming increasingly casualised (ABS 2016 Labor force Australia November 2016:

 
(ABS 2016)
 

Part of the struggle for young people relying on insecure employment is the difficulty of unpredictable and fluctuating pay because of irregular hours – leading to a lack of financial security. That makes it hard to enter into financial contracts for loans or housing. The economic consequences of insecure employment can lead to young people having to put their life on hold, and can lead to financial exclusion which can have ramifications that can “linger for more than 10 years”.

There are 86,000 people who are underemployed or looking for more hours across the state.

Underemployment and insecure employment, as well as unemployment, are creating inequality and poverty in South Australia.

 

3. Youth Allowance and New Start are inadequate.

Current levels of income support are not enough to pay for the basics and this is forcing young people into poverty.

Youth Allowance is paid at $445.80 a fortnight (away from home rate) or $222.90 per week. Compare this to the minimum wage of $719.20 per week and young people are living on a wage that is $496.30 or 30.9% lower than the minimum wage. Furthermore, Youth Allowance is $197.64 a week below the Henderson poverty line ($420.54 a week – not in workforce). Youth allowance recipients are forced to live on just $31.80 a day.

Similarly, Newstart Allowance is currently paid at $545.80 a fortnight (single, no children rate) or $272.90 per week. This equates to a difference in income of $100 per fortnight or $50 per week between Newstart Allowance and Youth Allowance. The weekly payment is $446.30 and 37.9% below the minimum wage ($719.20 a week) and $147.64 a week below the Henderson poverty line ($420.54 a week). Newstart Allowance recipients receive $38.98 a day to live on.

To condense that down into a picture:

 
supported income - poverty
 

Look… If you want to know how hard it is to live on Newstart or Youth Allowance… Here’s the National Rental Affordability Index Map for people looking for a place to live on Youth Allowance or New Start:

 
(NRAI 2018) Editors note: Red is bad.

(NRAI 2018) Editors note: Red is bad.

 

So with the continued prominence of youth unemployment, the casualisation of the workforce and an inadequate income support system that is based on age rather than personal circumstance, young people are experiencing the negative impacts of living on a low income.

 
The experience of poverty felt particularly by young people has the potential to impact upon their growth, development, capacity and resilience both now and into the future.
 

4. Here’s what young people told us about living in poverty.

Young people have described the sustained difficulty in living week to week on Youth Allowance and other government income support and often go without essentials such as medical care and medicines as well as housing, food and transport due to a lack of income.

Young people who live with a parent, guardian, or caregiver on a low income, or who live independently on a low income, have described living week to week with the barest of necessities to manage on little to no disposable income. Young people have described a range of challenges to YACSA, including:

  • being locked out of the private rental market 
  • delaying seeing their GP and not filling prescriptions
  • delaying medical treatment
  • delaying or not seeing a dentist,
  • not being able to afford nutritious food and;
  • having to borrow money to pay for food, medicines, transport and other essential bills.

And there’s evidence to back that up. Levels of personal income are inextricably linked to the health and wellbeing of individuals and those who experience social and economic disadvantage throughout their life cycle experience decreased levels of good health compared to wealthier citizens.

 

5. Things need to change.

Government has a responsibility to support young people, particularly those who are vulnerable, and we support a greater investment in policy and programs that decrease the short- and long-term negative impacts of poverty.

 

Young people pay the same for petrol, food, rent and utilities as everyone else yet they are paid less as workers or recipients of income support payments.

Here are some ways systems can be tweaked to help people living in poverty:

  • The federal government needs to raise the rate of both Youth Allowance and Newstart to better reflect the cost of living – and for rates to be based on need and personal circumstances rather than age.
  • Increase ‘youth wage’.
  • Work to reduce unstable and casual employment – and increase meaningful and ongoing entry level employment.
  • Create more affordable housing.

Look, we urge government to recognise the disparity in income equality that is being experienced by young people and to develop social policy that supports them based upon evidence rather than stereotypes and political ideology.

Policy decisions that demonise or punish young people simply for being young are unfair and can only lead to further disadvantage.