The federal government’s most recent plan to overhaul Australia’s welfare system focuses on welfare dependency among younger parents, carers and students. The Minister for Social Services Christian Porter in announcing the report said:
“The more important purpose of our data system is to allow us to identify what happens to people in receipt of welfare with the highest risks of long-term dependency and to analyse the impacts of policy designed to help those people break cycles of welfare dependency.”
The government is opening up a A$96 million Try, Test and Learn Fund, for not-for-profit organisations, governments, social policy experts and industry to offer their own policies to get young people off welfare.
However research indicates that targeting Gen Y might deter young people from seeking help in the first place.
The lost generation
Gen Y are often characterised as entitled, lazy, and looking for a free ride. This stereotype is unsupported by research.
When we add caring responsibilities, the outlook becomes even more stark.
Carers Australia estimates that Australian carers do approximately A$60.8 billion worth of unpaid work every year. Out of this 11.4% of care was done by people under the age of 25.
In other words 304,900 young Australians were caring for family members with an age-related illness, disability, or substance dependency. It would seem that balancing this responsibility with employment is difficult, as the participation rate for primary carers is 27% less than the general population.
Similarly, qualitative research tells us that young people with caring responsibilities often avoid using the government services available to them. They fear that doing so will make them appear unfit as parents or carers and risk having their wards removed from them.
Given that the proposed reforms targets this group as highly “at risk of long-term welfare dependency”, there is potential to exacerbate this trend.
Is early investment effective?
The government’s current focus is on intervening early to try and get young people off welfare or prevent them from needing it. The problem is that we don’t know if this approach works.
However, if we look across the Tasman Sea, New Zealand provides some insight. The latest actuarial reports state that the overall welfare budget has indeed shrunk by 2.07%.
It’s no secret the welfare spending comprises the largest portion of the latest budget. The good news is that the Parliamentary Budget Office’s 2015 medium-term projections already predict that government spending on welfare is trending down. For example, unemployment and parenting payments are projected to decrease by 0.1 to 0.2% each.
However, what’s misleading about this figure is what is actually included as welfare spending. Administration costs, for example, are included in this figure and account for almost A$4 million. Aged pensions, the NDIS, Indigenous support programs and payments to veterans (and their dependents) are also all included under this broad title.
Not only is the aged pension the top contributor to welfare spending, it is almost twice the amount spent on family payments (which includes childcare rebates, Family Tax Benefits, as well as parental leave payments). Also, it’s over five times the amount spent on unemployed persons (covering Newstart, Youth Allowance, sickness benefits and other associated rebates).
This data is not presented as an attack on the age pension. On the contrary, given the challenges of an ageing population coupled with the OECD Pensions at a Glance report which estimates one third of Australian pensioners live below the poverty line, the pension should be considered an essential safety net for Baby Boomers.
Unfortunately, the proposed welfare revolution does not afford Gen Y the same safety guarantees.
What do young people need?
The way we talk about welfare has a significant impact on those who need it most. By targeting young carers as a group, we risk making people less likely to seek out the support that they need.
Another PwC review found investing heavily in childcare could lead to an additional A$60 billion in GDP by 2050 as a result of increasing female participation. This would benefit both young parents and remove the creation of additional stigma.
Other avenues for improving this sector could come from combining the childcare benefit and rebate into a single payment given directly to providers, increasing the subsidies for children with disabilities or young parents, or increasing the pay of early childhood educators in the sector.
To ensure young carers succeed into the future, the number of Commonwealth Respite and Carelink Centres could be increased to provide much needed education support to young carers. Scholarships could be offered to young carers re-entering the education system or qualifications in care could be offered as a recognition for prior learning based on their experience. This could help remove the perception of young carers as being economically inactive.
Above all, there needs to be a greater opportunity for young people to have their say on youth policy. The peak body for youth affairs, the Australian Youth Affairs Coalition was defunded in the 2014-15 Budget and is due to close at the end of 2016. Without this important space for young people to contribute, policy will continue to fail the final hurdle when it comes to getting young people into the workforce.