New Deal or No Deal: #Budget2014 and the risks for younger Australians

In Croakey’s continuing coverage of the 2014-15 Federal Budget, John Mendoza looks at the raft of harsh measures it plans to impose on young people – from the unprecedented withdrawal of unemployment benefits through to significantly higher university fees – and argues that “no other group in our community has ever before been so singled out for special attention in a federal budget”.

Mendoza warns that younger Australians were already struggling with ‘precarious work’ conditions and unaffordable housing and are now being “actively excluded” by the Government.

“It is discriminatory, divisive and dangerous,” he said, noting the well documented links between mental illness, suicide and under-employment and unemployment and the lessons that should be learnt from the 1990s recession and other decisions.

(Update 27 May: Please note author’s correction in the comments section).

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John Mendoza writes:

Right now there are a couple of events being covered in the mainstream media that the Abbott Government may want to pause, note and reflect on before implementing policies targeting younger Australians announced in the 2014 Budget.

The first event is the Royal Commission into the Home Insulation Program developed and rolled out by the Rudd Labor Government. The second event is the 50^th anniversary of the Menzies Government’s decision to send Australian armed forces to the Vietnam conflict and to include ‘conscripts’ in the effort.

In both cases there were numerous warnings and concerns expressed about the decisions, but both governments concerned ignored them and rolled on. The consequences of both, while different in scale and impact, are clear.  The decisions on Vietnam and conscription galvanised not only the young generation but also the nation to overturn the policies.

The raft of policies announced by the Abbott Government in the 2014 Budget that impact on younger Australians effectively sees the Government going after those aged under 30. Arguably no other group in our community has ever before been so singled out for special attention in a federal budget.  Like the policies 50 years ago, these too may galvanise a generation, if not a nation, against the Government.

The context here is important. On a range of measures, younger Australians are not doing too well at present.  Unlike previous post-war generations, they face what is now being termed ‘precarious work’ conditions in a globally competitive market – that is, work is poorly paid, insecure, unprotected, and cannot support a household.  For young people, no matter what level of qualification they achieve, one has no assurance of ongoing work. With our highly casualised workforce, comes increasing stress and anxiety about how one is going to survive.

Add to this uncertain employment, young Australians also face one of the most expensive housing markets in the world. Average house prices in the major cities are between 7 and 10 times average weekly earnings. Purchasing a home is becoming rapidly out of reach for younger Australians and one in four aged between 24 and 35 now live with their parents. There is absolutely nothing in the Budget to address this issue.

So add to this context the raft of measures in the 2014 Budget targeting younger Australians: significantly higher university education fees, the withdrawal of the (manifestly inadequate) Newstart allowance for those under 30 unemployed for more than six months, the forced mobility for work provisions, the withdrawal of the “Tools for Trades” program for apprentices, the loss of other key support programs like Youth Connections and Young Parenting Programs, the introduction of tighter requirements on access to the Disability Support Pension and more.

The Government’s own figures show that only just over half (53 per cent) of all people under 30 who are on Newstart find a job within the new six-month limit. More than one in four remain unemployed after 12 months on Newstart, not by choice but simply because the jobs are non-existent. So the Government knows these young people will have no income at all during this period, except in special circumstances.

Simply put, younger Australians are been actively excluded by Government. It is discriminatory, divisive and dangerous.

The changes to Newstart allowance in particular are the most egregious and dangerous proposals. The links between mental illness, suicide and under-employment and unemployment are well documented and known. These changes are been heralded in at a time of very high unemployment among 16-24 year olds – the last time we had equivalent rates of youth employment was in the 1990s recession “we had to have”. These preceded the peak rates in suicide at the end of that decade.  Higher rates of under-employment and unemployment raise rates of mental illness and are associated with higher rates of suicide.  Removing the very basic safety net provided by Newstart will put more unemployed young people at even greater risk – possibly unprecedented.

Younger Australians are already not travelling well. Young Australians are experiencing unprecedented levels of psychological distress. In late 2012, a national survey lead by the Brain and Mind Research Institute, showed that nearly one in five young men seriously considered suicide, and four percent went so far as to have made a plan to kill themselves. Two per cent reported attempting suicide in the past 12 months – that’s 28,000 young men. Rates of help-seeking among young people remain all too low with only a third of young women and less than twenty percent of young men seeking support or services. The stigma associated with mental illness remains a key factor here.

Australia already has an unacceptably high rate of youth suicide and self-harm.  Suicide is the leading cause of death for men aged between 15 and 44 is suicide. For women, nearly one in every three deaths for those aged 16-24 is a suicide.

It is a national tragedy that deaths by suicide, even based on preliminary data from the Australian Bureau of Statistics for 2012, have reached a 10-year peak. It is a national tragedy that, every day in Australia, at least seven Australians take their own life and around 200 people will attempt to do so. Every day more than 85 Australians are admitted to hospital as a result of deliberate self-harm.

Of deep concern, the Queensland Child Safety Commissioner recently reported on an alarming increase in child suicides in 2012-13. Thirteen children aged between 8 and 14 took their own lives in Queensland alone that year.

Overwhelmingly, evidence shows that isolation, dislocation, loneliness and hopelessness can increase anxiety, despair and depression – all triggers for suicidal behaviour.  Even without mental health problems, long-term unemployment and without access to basic social support, will on the available evidence put many young people at risk of suicide.

Surely, the Government sought advice on the effect of these measures and surely that advice made Cabinet aware of the risks in singling out particular age groups for harsher measures?  Surely the Government considered the lessons of the 1990s recession and youth unemployment and the effect on that generation? If not, then it appears as reckless as the Rudd Government’s implementation of the home insulation scheme and as lethal for a generation as the decisions to go to an Asian war 50 years ago.

Declarations:

I am a middle-aged white male with just 4 years and four months to go before I can draw a tax-free superannuation income. Almost all my six years of tertiary education came free too. With my wife, I also bought and sold property and negatively geared throughout my working life to minimise tax (all 100 per cent legally).  So I clearly have everything to lose should the Government reconsider the measures in the 2014 Budget. Guess that makes me guilty.

John Mendoza is Director, ConNetica , and Adjunct Professor, Health Science, University of the Sunshine Coast, and Adjunct Associate Professor, Medicine, University of Sydney