Young workers and other recent entrants to the labour market have borne the brunt of the economic shock associated with the pandemic and its recovery. Recent research has shown that one in three young people have experienced significant economic, financial and emotional distress as a result of the pandemic and the associated crisis.
The budget offers a unique opportunity to reframe the economy in a way that supports those who have been affected by economic events that are entirely outside their control, and young people are among the most in need. So what supports are they being offered?
The first major area of spending that offers some benefit for young people comes from the education portfolio.
Nearly half a billion dollars is being invested in Australian schools to assist students who experienced Covid-19 related disruptions to their education. This includes a $203.7m Student Wellbeing Boost, which will give every school in Australia an average of $20,000 to spend on mental health support, excursions or social activities. Additionally, a mental health check tool will also be offered to schools, to assist with the identification of students who are struggling and need additional support.
Next, in the skills space, the government is offering significant increases to incentives for vocational education. The government has committed $1bn in funding for 180,000 fee-free study opportunities in the vocational education sector over the next 12 months. This investment will be made through state-based Tafe institutions, as well as a number of community-based private providers, for priority courses across a range of study areas, including health, community services and trade-based qualifications.
Similarly, the government has allocated an additional $485m to create 20,000 new university places for disadvantaged students over the next two years, in priority skills shortage areas including courses focused on nursing, teaching, engineering and technology. These places will target First Nations people, first in family, people from lower socio-economic backgrounds, those from rural and remote areas, and those with a disability.
While this supply of skilled workers will be beneficial to industry, supply alone does not lead to better outcomes for the students who enrol in these courses. However, the government has placed an emphasis on creating demand for these skilled workers by implementing a range of strategies to provide employment in a diverse array of industries.
First, the federal government has followed their Victorian counterparts in committing to social procurement, known as the Australian Skills Guarantee. This guarantee requires that all major projects funded by the federal government adhere to a mandate where one in 10 workers is either an apprentice, trainee or cadet.
Second, the government has allocated $15bn to their National Reconstruction Fund, which will be used for strategic investments aimed at diversifying the economy, aiming to “crowd in” funding around new or growing domestic industries, including clean energy, medical manufacturing, technology, agriculture and critical minerals.
Third, to incentivise in priority industries, the government is offering targeted supports to those who engage in “earn and learn” programs. In the renewable energy space, the government is funding the New Energy Apprenticeship and New Energy Skills programs that they took to the election. These programs provide financial support of up to $10,000 directly to apprentices who work in the clean energy sector, supporting this investment with additional mentoring and career counselling.
The tech sector is also being supported through a tripartite Digital and Tech Skills Compact to develop and deliver digital apprenticeship models to support entry-level tech workers, including equity targets to increase diversity across the sector. The government is also creating a Digital Traineeship Program in the public services, which will offer workers from underrepresented communities an opportunity to earn a wage while completing a Cert IV in a digital or technological field of study.
There are also changes in the industrial relations reform bill, due to be introduced in parliament on Thursday, which are foreshadowed in the budget and have considerable ramifications for young workers. In particular, reforms to the definition of casual workers, regulating the use of short-term contracts, and the introduction of multi-employer bargaining arrangements, as well as amendments to the Fair Work Act that mandate job security and pay equity as guiding principles for the legislation, are anticipated to increase the pay and security of award reliant workers in service industries.
The government is also abolishing the controversial Youth PaTH scheme introduced under the previous government, which allowed employers in the fast food, hospitality and retail sectors to employ trainees for 12 weeks without the provision of job security. This legal “try before you buy” approach to employment was notoriously bad at increasing the employment outcomes of its participants, and its abolition will reduce the legal ways that employers can avoid paying minimum entitlements.
However, there are numerous areas of the budget that are considerably lacking for young people.
Sadly, it seems like the low and middle income tax offset (the LMINTO or “Lamington”) which saw average wage earners receive a temporary tax reduction of up to $1,500 has been wound back, while the controversial stage-three tax cuts are being kept in place – despite the fact that the majority of Australians would prefer to see them scrapped.
Similarly disappointing is the fact that the additional supports made available for mental health plans over the pandemic will not be extended. Those with a mental health plan will revert back to 10 sessions of subsidised sessions with a psychologist, down from the pandemic high of 20 visits per calendar year.
Finally, and perhaps most notably, while there are large announcements regarding housing affordability as a part of the governments National Housing Accord, which promises to build 1m new homes, the vast majority of these reforms are aimed at prospective homeowners not renters.
By establishing a housing specific Future Fund, the government is hoping to increase the social housing stock by 30,000 units between 2024 and 29. Similarly, they are offering shared equity schemes through their Help To Buy initiative that will allow homebuyers to buy a house with as little as a 5% deposit.
Unfortunately, there doesn’t appear to be any specific supports for renters, which young people overwhelmingly are. There is an impetus to increase affordable homeownership opportunities, but little to help young people who are not able to save for a housing deposit, regardless of its size. The housing supply could create opportunities for homeownership, but equally could lead to further concentration of wealth in the hands of investors who will be able to outbid young people at auctions, and continue to offer rents at market rates.
Ultimately, while the budget invests in a number of strategies that could increase the employment and education opportunities available to young people, there are some other crucial areas for investment that could improve the quality of life for young Australians. The treasurer was quick to note that his first, unusual budget doesn’t do everything all at once, and it’s possible that future budgets and policy reforms will offer more investments in mental health and reforms that create greater security for renters.
However, young people will have to wait and see.
• Shirley Jackson is the director of the Centre for New Industry at Per Capita, a research centre dedicated to economic diversification, decarbonisation and democratisation
