10 Jul 2014

Forever Young... And In Debt

By Lucas Walsh

Proposed Abbott Government reforms to the welfare safety net may condemn young people to a youth spent in debt, writes Associate Professor Lucas Walsh. 

Young people in Australia have experienced some tough times during the last several years.

As with other OECD countries, they were immediately and disproportionately affected by the global financial crisis. Though not as bad as countries such as Spain and Greece, young people today experience unemployment levels at two or three times the overall working population depending on where they live. And now they face a suite of transformative federal policy proposals to ‘earn or learn’.

With key policy yet to make its way through parliament, we can only speculate about what forms it will eventually take.

What we can expect, however, is a shift of the burden of debt from the state to young people. And in the stroke of a policy pen, it could extend markers of transition of “youth” to “adulthood” to the age of 30, with serious consequences.

With changes to Newstart potentially compelling Australians under 30 to wait six months before receiving unemployment assistance, many young people face poor work prospects.

For teenagers in particular, the labour market is characterised by high levels of casual work, under-employment and unemployment.

Those looking for work will depend heavily on family and non-government support while they seek jobs. They will need money to live, to get to interviews, to dress appropriately and other necessities for getting a job.

Generally treating people under the age of 30 as a homogenous group (or for Treasurer Hockey, two groups: “lifters” and “leaners”) is problematic.

Year on year, the data confirms that young people in certain circumstances face particularly high risks of being marginalised from earning and learning, such as those who live in regional and remote areas, and those who leave school early.

Those not learning are expected to travel to work. Employment Minister Eric Abetz has suggested that young people not in training or study could go picking fruit in Tasmania.

Implicit in this is an expectation that young people have the capacity to leave valuable local support networks to get low-paying work in seasonal markets.

Those in regional and remote communities will face particular challenges already in finding work. Removing support may exacerbate these.

For those lucky enough to get a job, the odds are that it will be casual or part-time work. A fifth of all casual workers are aged 15-19 and the prevalence of casual work for this age group has increased significantly since 2001.

A substantial proportion won’t get enough work – last year, around a third of part-time workers aged 15 to 19-year-old had insufficient work for a year or more.

For those on the dole, Social Services Minister Kevin Andrews recently offered a reprieve of sorts.

Newstart Allowance will not be cancelled for over 100,000 dole recipients under the age of 30 next year as initially suggested.

Instead, recipients will have the option of working for the dole if they work for 25 hours per week for welfare.

For those young people, a preoccupation with “busy-work” in such programs could result in them spending less time looking for a real job, as has been the case in work for the dole schemes in the US and previously in this country.

Many choosing to learn will start their post-school life in debt.

Recent estimates suggest fee hikes to higher education degrees ranging from 20 per cent to over 100 per cent, depending on the degree, the private benefits accrued post-study and level of international demand.

A significant proportion of a generation will enter the workforce in debt, having gambled on choosing a profession in an ever-changing job-market in which a “career” scarcely resembles what it did 20 years ago.

Those who need to reskill in future, such as those in automotive manufacturing, will face dual challenges of unemployment without benefits and the added debt of additional training.

Related to this point, Education Minister Pyne does not wish to see higher education go the way of car manufacturing as globally uncompetitive because of regulation.

This proposition implies that universities are somehow comparable to industry, and devalues their role as a public good and foundational basis of Australia’s social and economic infrastructure.

Trainees will also be affected by the proposal to introduce concessional trade support loans of up to $20,000 over a four-year apprenticeship.

Those currently in apprenticeships won’t have to wait: with the slashing of Tools For Your Trade this week, apprentices no longer receive financial assistance for their tools.

They instead have the Trade Support Loans Programme. This measure will apparently save the government $914.6 million over four years, but for apprentices, loan repayments may take longer.

Last week, Minister Andrews expressed interest in “incorporating income management as part of a package of support services available to job seekers”.

It has been recommended that the government should be able to determine how welfare benefits are spent by recipients.

This is to prevent young people from frittering their dole on non-necessities, such as alcohol.

Putting the intention aside, this is a perplexing message from a government that espouses personal responsibility on one hand, while apparently threatening to wield the hand of a nanny state on the other. 

These policies shift debt from the government’s budget books onto the young. They favour those who are already wealthy and can rely on support networks, such as family. They infantilise young people by stretching out the definition of youth to the age of 30.

In so doing, these policies propose a perverse experiment in social engineering, in which the government may save a few dollars now, but at the risk of great costs to us all later.

For some, it may seem like they are 19 forever, but their experience of “youth” could be very different from previous generations.

Associate Professor Lucas Walsh is Associate Dean (Berwick) in The Faculty of Education at Monash University.

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Posted Thursday, July 10, 2014 - 08:15

'Get 'em young and train 'em.  On the dole and subject to income management ?  There might be better occupations in the ADF - at least you get to kill people sometimes. Let's have another war and conscipt more babies to fight it ? - very good for the economy unless we are conquered. Perhaps if we fight America, they might install a Marshall Plan to rebuild our manufacturing sector ?

Posted Thursday, July 10, 2014 - 12:46

Excellent article by Associate Professor Lucas Walsh.

The average HECS debt is $15,200 and is repaid over 8.3 years (The Australian, 2013: http://www.theaustralian.com.au/national-affairs/policy/lost-hecs-debt-62bn-and-rising/story-fn59nlz9-1226557806058 ).   Despite the reality that undergraduate teaching can be provided for about 10% of the current cost using casual academics and for about 1% of the current through part-time expert accrediting assessments for  top quality courses emplaced for free on the web (MOOCs) by top institutions like 152-Nobel-Laureate Harvard and 83-Nobel-Laureate MIT (see  Dr Gideon Polya, “Accredited Remote Learning”: http://accreditedremotelearning.blogspot.com.au/ ), the anti-intellectual, anti-science, anti- youth and climate criminal  Australian Coalition Government  is hell-bent on hugely increasing the average HECS Debt.

However as set out below in a letter sent to MPs and Media, Australia’s  historical Carbon Debt from greenhouse gas (GHG) pollution is $1.7 trillion and increasing at $300 billion each year (for details and documentation see Gideon Polya, “$10 Trillion Annual Carbon Debt Increase For Young People On A Threatened Planet”, Countercurrents,  8 July, 2014: http://www.countercurrents.org/polya080714.htm ). Given that Australian under-30 year olds (“young persons”)  total 9.4 million (representing 39% of the overall population)  this means that the per capita Carbon Debt for this section of the population is $1,700,000 million /9.4 million = circa $180,000 per young person and this is increasing at $300,000 million/9.4 million = circa  $32,000 per young  person annually.

LETTER: “According to climate economist  Dr Chris Hope from 90-Nobel-Laureate Cambridge University the damage-based Carbon Price of greenhouse gas (GHG) pollution is $150 per tonne CO2, and according to Dr James Hansen from NASA and 101-Nobel-Laureate Columbia University industrial man has added 1,466 billion tonnes CO2 to the atmosphere (1751-2014), this yielding a global Carbon Debt of $220 trillion or about 2.6 times the World’s GDP.

A revised annual global greenhouse gas (GHG) pollution is 64 billion tonnes CO2-e (CO2-equivalent, including other GHGs like methane, CH4) and thus Carbon Debt is increasing  globally each year by $150 per tonne CO2-e x 0.064 trillion tonnes CO2-e = $9.6 trillion i.e. by about $10 trillion annually, to be paid by future generations.

Australia’s historical Carbon Debt is about 11 billion tonnes CO2 x $150 per tonne CO2 = $1.7 trillion and this is increasing each year at $150 per tonne CO2-e x 2 billion tonnes CO2-e per year (Domestic plus Exported) = $300 billion annually, to be paid by future generations.

Those rejecting a Carbon Tax are complicit in an immense crime against Humanity, the Biosphere, the young and future generations (for documentation Google "$10 trillion annual carbon debt")” END LETTER.

In addition one notes that an increasing proportion of debt-laden young Australians will be excluded from home owenership that is a maijor source of wealth accretion for the One Percenters and  Ten Percenters.