This Abbott policy is not about savings.
ONE of the most insidious results of slower economic growth and welfarist policies is high youth unemployment.
The latest figures showed youth unemployment rising to 12.7 per cent. Long-term youth unemployment is now three times higher than at the end of the Howard government.
Youth disengagement is so destructive because its impacts can be lifelong.
Research from the Brotherhood of St Laurence shows young people who are unemployed and living off the dole have poorer health later in life and are three times more likely to be unemployed after the age of 25.
The International Monetary Fund finds that unemployment while young reduces a person’s earning capacity for years to come; something that is not replicated when older people temporarily lose their job. Youth unemployment also hurts happiness and job satisfaction for years afterwards.
The Abbott government wants every young person to be earning or learning and never on the dole. This is not a savings measure — the saving would be relatively small. Rather, it is to help young people get the best start in life and not fall into the welfare trap.
The most fundamental thing we can do to decrease youth unemployment is to grow the economy. The past six years saw the economy slow as Labor strangled business with red tape, introduced the economy-wide carbon tax and weakened the nation’s public finances. Every policy of ours, including our budget this week, is geared towards improving growth again. The Reserve Bank is already indicating that unemployment may have peaked as business confidence resumes.
We need to provide strong incentives for young people to be mobile for work rather than just look for jobs within a short commute. Some places have more jobseekers than jobs while other places struggle to fill vacancies.
Consider the impact of the mining boom over the past few years, with tens of thousands of jobs created in the northern parts of Australia, many of them entry-level jobs.
People will always have choice about where they live — this is part of our citizenship contract. But we can create incentives, particularly for young people, to be mobile and shift to where jobs are located.
Earlier in the year we created a jobs bonus and mobility scheme that would provide up to $12,500 to a person over 18 if they moved for a job and stayed in work for two years. This will take effect on July 1.
Finally, we need to stop any incentive for young people to exit the system and be on the welfare line. At the moment a person can drop out of school and collect a couple of hundred dollars each fortnight if they satisfy certain requirements. For some, the temptation is too much.
In remote indigenous Australia, fewer than one in five 17 to 24-year-olds are fully engaged in work or training. Sometimes there are few opportunities locally, but often there are entry-level jobs at nearby towns.
There must be reasonable exemptions for particular hardship, but our basic rules for young people must be tough: one must be in school, training or work.
If there are still people who do not find work or training relatively quickly, a structured meaningful activity is necessary to keep people active, improve skills, and strengthen motivation for a real job. Work for the Dole has this impact. It keeps people engaged and ensures they are contributing to the community. Labor gutted the Work for the Dole program and kept it in name only. We will restore it.
Many indigenous leaders have described the corrosive impact of passive welfare. Noel Pearson goes as far as saying that “dependency and passivity kills” as it sucks life and motivation out of individuals. But this problem is not just in indigenous communities, but across pockets of Australia.
We need absolute resolve to ensure our young people are earning or learning, or at the very least, active.
Alan Tudge is Parliamentary Secretary to the Prime Minister.