The Youth Affairs Council Victoria (YACVic), the state peak body for young people and the youth sector, has expressed deep concern at the likely impacts of the 2014-15 federal budget on young people. With reduced access to income support, education, training and employment, many young people will be at risk of poverty and homelessness.

Federal budget raises threat of youth poverty, homelessness

The Youth Affairs Council Victoria (YACVic), the state peak body for young people and the youth sector, has expressed deep concern at the likely impacts of the 2014-15 federal budget on young people. With reduced access to income support, education, training and employment, many young people will be at risk of poverty and homelessness.

“The federal budget is framed in terms of restoring Australia’s financial security,” commented YACVic CEO Georgie Ferrari. “But this is short-term gain for long-term pain, especially for young people.” The Australian Council of Social Service has noted that people on low incomes will be expected to contribute over half the savings in the budget through cuts to programs and services, despite having the least capacity to live on less. Vulnerable young people are one of the key groups in the firing line.

People under the age of 30 will now have to wait six months before receiving any income support through Newstart or Youth Allowance. After six months of support, if they have not found a job, their payments will be cut off for another six months. In addition, the eligibility age for Newstart will rise from 22 to 24 years for new applicants. Young people in this age bracket must access Youth Allowance instead; a loss of around $48 per week.

“There is no evidence that these harsh measures will increase the number of jobs available, or help young people to find a job and keep it,” said Ms Ferrari. “These measures seem based on the assumption that parents can and will support their sons and daughters until the age of 29. For many families, for a range of reasons, this is just not possible.

“We are told that young people must ‘learn or earn’. But meaningful employment is not available for all young people. This same budget has removed the funding to Youth Connections, which provides career counselling and support to early school leavers, helping over six thousand young people a year in Victoria alone. The budget has also ceased funding to the Local Learning and Employment Networks (LLENs), which provide partnership brokerage between schools, vocational providers, businesses and young people, to support youth employment at a local community level. How can the federal government claim to be encouraging young people into the workforce when they are removing the very supports that helped this to happen?”

With the youth unemployment rate almost twice that of the general population – 12.4% compared to 6.4% in Victoria – the implications are severe. Jenny Smith, CEO of the Council to Homeless Persons, has stated “We will see more young people lining up at homelessness agencies with no money for food or rent … How is a young person meant to survive on $0 per week, when the average rent in Melbourne is $360 per week?”

Young people with disabilities are also being targeted, with the federal government undertaking to reassess the eligibility of recipients of the Disability Support Pension (DSP) aged under 35 who were granted the DSP between 2008-11. This is likely to lead to people being moved onto Newstart, meaning a reduction in their income of $166 a week. The Newstart allowance of $36 per day does not recognise the costs associated with living with a disability, such as transport, utilities, aids and equipment.

“Reducing support to young people with disabilities does nothing to address the inequalities that keep them out of the workforce,” Ms Ferrari commented. “Less than 40% of young people with disabilities are fully engaged in education or employment, and their Year 12 completion rate is at least 13% lower than that of young people without disabilities. They have been shut out of jobs through poor access and discrimination.”

The Youth Disability Advocacy Service Manager, Dr George Taleporos, has called on the government to establish a National Disability Employment Strategy instead. This strategy could include strong targets for employment of people with disabilities in the public sector, more proactive engagement between Disability Employment Services and employers, and a compact between government and big business to create 20,000 jobs for young people with disabilities.

“Current disability employment programs are failing young people with disability,” Dr Taleoporos commented. “Pushing them off the Disability Support Pension is not the solution.”

At the same time as “earning” will become more fraught for many young people, “learning” will become more expensive – a double-edged sword. Caps on university course costs will be removed from 2016, enabling universities to set their own fees. It seems likely that the cost of many degrees will rise significantly. The Commonwealth’s subsidy to student degree costs will also be reduced by around 20%, with students paying a greater share.

While there will be an increase in scholarship funds for disadvantaged students, and a $3 million bursary program for young carers, the overall picture is bleak. Even these targeted measures will have only a limited impact; for example, the 150 bursaries for young carers will help only a small proportion of the 380,000 young carers around Australia.

Meanwhile, although the budget seems to guarantee the additional federal money for schools agreed upon with the states in line with the Gonski reforms, this is not scheduled to continue beyond 2017. David Gonski himself has expressed grave concerns that funding for schools from 2018 onwards seems to be linked only to changes in general inflation, not to the costs, needs and aspirations of our schools and students. This signals a move away from a more responsive, equitable funding model.

Also controversial is the decision to continue the National School Chaplaincy Program, at $243.8 million over five years. The program, which received a mixed response from schools in the past, will now fund access to religious-based chaplains only, not welfare workers.

Ms Ferrari commented “In the context of Australia’s multicultural society and secular public school system, we have to ask whether this is the fairest, most effective use of funding. There also seems a risk of chaplaincy funding being allocated, in some cases, to organisations with an anti-GLBTI agenda. Positive steps have been taken in Victoria recently to protect the safety of same sex attracted and gender-diverse students, such as the Victorian Government’s strong support for the Safe Schools Coalition. It would be a real step backward if a federal initiative were to work against this.”

Meanwhile, the budget looks set to have mixed impacts upon the health of young people. YACVic welcomes the government’s commitment of $14.9 million over four years to establish ten new headspace sites around Australia and evaluate the headspace model. Also welcome is the pledge of $18 million to the Orygen Youth Health Research Centre, to establish and run a National Centre for Excellence in Youth Mental Health.

However, YACVic does not support the introduction of a $7 co-payment for GP services, out-of-hospital pathology and X-rays, and a $5 co-payment for medicines on the Pharmaceutical Benefits Scheme. GPs remain a critical local source of support, including in relation to mental health. Young people are notoriously reluctant to seek help, and this measure will further discourage them.

In the future, it will be more difficult to keep the issues affecting young people on the national agenda, or to support the youth sector to work together Australia-wide. This is due to the cessation of Commonwealth funding to the Australian Youth Affairs Coalition. While AYAC will continue to function in a reduced capacity, its ability to monitor the impacts of the federal budget on young people and the sector that supports them has been severely diminished by having their funding abolished.

Further action and information

To find out more about the future of AYAC, see

VCOSS and ACOSS are hosting a forum on the federal budget on Wednesday, June 4th from 12- 2pm. For further information or to register for the event go to:

YACVic will be writing to the Federal Minister for Education, Christopher Pyne, who has responsibility for the youth portfolio and Senator Scott Ryan who is the Parliamentary Secretary to the Minister for Education about our concerns with the federal budget.

YACVic will also be raising our concerns about the federal budget and its potential impacts on young Victorians with the state Minister for Youth, Ryan Smith.