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COVID-19 is a generation-defining pandemic which will have a long-term, scarring impact on young people’s lives. YACVic has identified the decisions and investments governments should make to support young people to weather the recession, and unfortunately very few of them are included in this Budget.

The Federal Budget lays down the foundation for Australia’s recovery from COVID-19. But the government’s focus is more on giving money to businesses than supporting people directly. The budget brings some hope and optimism for young people eager to get back into work, but its success is reliant on businesses investing in job creation.

YACVic has worked with the youth sector and young people to develop key recommendations for a COVID-19 Recovery Plan for Young People. Read more and join the campaign here.

Youth Employment through JobMaker Hiring Credit

The JobMaker hiring credit aims to incentivise businesses to hire young people aged 18-35 who have been on the JobSeeker unemployment payment. For 12 months, businesses will receive $200 per week for hiring someone below 30 and $100 per week for hiring someone between 30 and 35.

The program will certainly encourage businesses to hire young people, and its broad scope means that there is more opportunity for young women than previous announcements, but there is little guarantee of decent work and career pathways. YACVic advocates for the creation of meaningful jobs for young people that will support them into a career that interests them. YACVic is concerned that this incentive will place young people in temporary, insecure work that does not align with their areas of study and career aspirations. To really end the employment crisis for young people we need a long-term plan for youth employment.

JobTrainer

The Budget allocates $1.5 billion to supporting businesses to employ apprentices and trainees. JobTrainer will pay for 50% of apprentices’ wages from 1 July 2020 to 31 March 2021. While this program is a good first step to supporting young apprentices, YACVic is concerned for the future of these apprentices and the possibilities for exploitation. When the program ends and businesses need to start paying their apprentices’ full wage, struggling businesses might simply lay them off. This would be disastrous for young apprentices who might only be halfway through their training. Further, there are reports of employers exploiting young workers by forcing them into apprenticeships or refusing to graduate them in order to keep wages low.

The government will also fund 50,000 online short courses on topics like teaching, health, science, information technology and agriculture to the tune of $251.8 million. While YACVic welcomes the investment in this training, we recognise that training does not lead directly to jobs, especially in a recession. In addition, many young people who have already graduated from TAFE and university courses are still unable to find work.  We call on the government to increase investment in job creation in these sectors alongside this investment in training.

Income Support Payments back to Poverty Levels

In the meantime, JobKeeper and JobSeeker payments are still scheduled to reduce and then end in January 2021. This year, these payments have been vital in keeping thousands of young people in secure housing and living above the poverty line. The Budget should have committed to keeping the rate of income support payments at the level they were during the pandemic. By reducing income support payments, the government is cruelly punishing young people who have little chance of finding work in a recession. In some cases, the low rates of income support payments will lead to homelessness, mental ill-health and create barriers for young people finding employment.

Tax Cuts for the Wealthy

The biggest expense in this year’s Budget is the bringing forward of personal and business tax cuts. The main beneficiary of these cuts are wealthier taxpayers, not young people at the beginning of their careers or out of work. The government’s hope is that the beneficiaries of these tax cuts will spend the money to stimulate the economy and create jobs. YACVic is concerned that these people will simply save the extra cash rather than spending it. Using those same funds for better income support would have ensured more money flowing through the economy. Tax cuts only help people who have a job – youth unemployment in Victoria is high and will remain this way unless direct action is taken.

Cash Payments Exclude Most Young People

The Budget includes $500 cash payments to recipients of the age pension, disability support pension, carer payment, family tax benefit, family tax benefit lump sum, double orphan pension, carer allowance, Commonwealth seniors health card, pensioner concession card and veteran card. This is a long list but deliberately excludes young people receiving Youth Allowance and JobSeeker. Young people on these payments are usually living close to the edge or below the poverty line — and are therefore highly likely to immediately spend any cash payments — yet will not receive the same support as others.

Climate Crisis Ignored

This Budget affirms the government’s commitment to burning fossil fuels instead of investing in renewable energy. Young people around the country have demanded solutions to the climate crisis, including significant investment in the transition to renewable energy. This Budget should have answered that call and seized the opportunity presented by the recession to deliver record investment into renewable energy, with the added benefit of creating decent, meaningful work and apprenticeships for young people in a growing, future-focused sector.

Mental Health Session Doubles and Money for Support

The Budget commits $100 million to provide 10 additional Medicare-subsidised mental health care sessions for people with an existing Mental Health Treatment Plan. This is a welcome measure that will allow young people to have better access to support for their mental health which has taken a battering through the pandemic and will continue to be negatively affected throughout the next decade. The extra sessions mean that young people can get support more regularly, rather than having space out their sessions over the year. This brings the number of Medicare-subsidised health care sessions to 20. One concern however is the limited availability of providers who work on a bulk billing basis, meaning that the sessions will remain out of reach for many young people who need them.

Elsewhere, the government has set aside money for a range of initiatives to support mental health. There are measures to support Victorian young people experiencing mental illness due to the ongoing COVID-19 pandemic access mental health support, support young people experiencing mental illness get into work, money to establish enhanced mental health clinics, support for Beyond Blue, Lifeline and Kids Helpline to meet increased demand and money for headspace to deliver outreach services. The budget includes measures to build a headspace ‘outpost’ in Hastings as well as commencing early service delivery in Rosebud and Pakenham. The National Suicide Prevention Trial has been extended and there is extra money to support the Victorian Government’s Standby Support After Suicide program and the Way Back Support Service.

Nothing about the Arts

This Budget failed to meaningfully mention the creative and performing arts, even though the sector has seen massive job losses due to COVID-19 and which disproportionately affects young people. Direct investment in the arts would create more jobs per dollar than investment in other industries like construction or gas extraction. The arts sector has called for direct support for artists and organisations which would support young people to make a career in the arts, but these calls were ignored in this Budget.

Not much for Young Women

Young women have been severely hit through this pandemic, with jobs and allowances in caring industries cut at the same time as many have served on the frontline of the COVID-19 crisis in aged care, healthcare, schools and supermarkets.  The focus on infrastructure investment, where jobs are predominantly male, means that young women are unlikely receive equal benefit from the stimulus measures. The Budget allocation for women’s economic security of $240 million over five years is miniscule compared to the billions allocated to business and infrastructure.  We do welcome the broad application of the new JobMaker initiative which will open up jobs more usually filled by young women.

A Little Bit for Affordable Housing

The Budget includes an extension of the First Home Loan Deposit scheme for an extra 10,000 people, which allows first-home buyers to build a new home with a deposit as low as 5%. The government acts as a guarantor for the loan meaning buyers avoid paying lenders’ mortgage insurance. This measure will help some young people buy their first house, but also encourages them to take on significant mortgages at a time of uncertain employment, and potentially falling house prices.

The Budget makes $1 billion available in the form of low cost, long-term loans to registered community housing providers to support the supply of social and affordable housing. While this is a welcome first step to solving the homelessness crisis which has a severe impact on young people in Victoria, more should have been done. Everybody’s Home and YACVic have long called for investment in new social housing and a social housing system that works for young people.

Elsewhere in the budget, billions of dollars were assigned to infrastructure projects like road and rail, but direct investment in the essential infrastructure of social housing has been ignored, despite the desperate affordable housing shortage and the potential to create new jobs.

We join Council to Homeless Persons in expressing dismay that the Budget strips $41.3 million from homelessness services from July 2021. These services provide vital support to young people experiencing homelessness. The recession will put extra strain on young people’s housing security and likely result in more young people seeking support from homelessness services. Now is the time to increase funding, not cut it.

Pathways to independence for Youth Allowance and ABSTUDY

The Budget includes $25.0 million over four years to temporarily revise the independence test for young people applying for Youth Allowance and ABSTUDY from 1 January 2021. Under the exemption, the six-month period between 25 March 2020 and 24 September 2020 will automatically be recognised as contributing to the independence test, regardless of whether employment requirements are met. In addition, The Government will provide $16.3 million over three years to incentivise young people to work in the agricultural industry, by promising that those who earn at least $15,000 between 30 November 2020 and 31 December 2021 will be automatically assessed as meeting independence requirements for Youth Allowance and ABSTUDY. This makes it easier for young people to access income support payments to help them study or move out of home.

A Win for the Youth Sector

The Budget increases the funding in Department of Social Services Grants to cover the costs for Equal Pay wages. This means that federally funded frontline social services workers, including youth workers, will continue to receive the higher wages won in 2012. At that time, the Fair Work Commission ordered eight years of increases to wages to recognise the value of ‘care work’. The future of Equal Pay beyond 2020 was in doubt but this Budget has secured these increased wages until 2024.

This breakdown was written by Sebastian Antoine, YACVic Policy and Research Officer. If you have any questions or concerns, please email info@yacvic.org.au.