Dr Matthew Thomas
Youth Employment Strategy
Unemployment among young Australians is significantly higher
than that for the population as a whole, and has been rising since 2008 and the
global financial crisis.
In response to this ongoing problem, the Government has
introduced a Youth Employment Strategy, which is made up of range of measures aimed
at increasing young people’s participation in education, training and
employment and ensuring that they do not become long-term unemployed.
These measures include:
$212.0 million over four years for intensive support services to
be provided by a network of community-based organisations to early school
leavers aged 15 to 21 years
$13.5 million over four years to reinforce existing ‘earn or
learn’ requirements, requiring early school leavers aged 15 to 21 years to study,
actively look for work, or undertake a combination of the two and
$105.7 million over five years for intensive support for
vulnerable young job seekers who are at risk of long-term unemployment,
including people with mental illness, young refugees and migrants and young
The Budget also includes further, complementary measures:
enabling access to the Youth Wage Subsidy for eligible job
seekers aged 15 to 29 years after 6 months rather than after 12 months and
$18.3 million over five years to expand work experience
opportunities for people aged 18 years and over and provide them with a
supplement to assist with the costs of participating in work experience.
The community sector has on the whole welcomed the Youth
Employment Strategy. For example, the Brotherhood of St Laurence has stated:
‘we are pleased to see the Abbott Government has begun to take the necessary
steps to tackle the steep challenge that youth unemployment poses to our nation
and neighbourhoods’. Similarly, the Australian
Council of Social Service has described the Strategy as ‘a move in the right
While the emphasis in this year’s Budget is on tackling youth
unemployment, it does include other measures that seek to increase the
employment participation of other groups vulnerable to unemployment, including mature
age job seekers, parents and people with disability.
The Government has restructured the arrangements for
providing wage subsidies by consolidating the four existing wage subsidy
programs and establishing a single wage subsidy pool. The pool is funded as a
part of the broad suite of jobactive employment services that are to
commence on 1 July 2015, and is substantially made up of funding that has been
redirected from other programs.
The measures improve access to the Youth Wage Subsidy (as
noted above) and provide for more generous Tasmanian Jobs Program subsidies.
They introduce a new wage subsidy stream for parents who receive income support
payments and have participation requirements. Tasmanian Jobs Program subsidies
are to be doubled to $6,500 from 13 May 2015, whilst $10,000 payments for the
Restart Wage Subsidy are to be made available over 12 months rather than the
current 24 months. These changes have been introduced
in response to the low take-up rate of subsidies under both of these programs.
The Budget provides $24.9 million over four years for a new job
seeker compliance measure. The first part of the measure extends the
application of existing ‘No show, No pay’ sanctions. The second part allows for
the suspension of income support payments of job seekers deemed not to have
undertaken adequate job search efforts, and does not allow them to have the
penalty waived by undertaking a compliance activity.
Typically, compliance measures result in savings due to the
reduced amount paid out in income support payments. However, the anticipated
savings of $6.9 million over three years to be realised as a result of the
measure are more than offset by the expected cost of $31.6 million over four
years, with a net cost of $24.9 million over four years.
Australian Greens Senator, Rachel Siewert, has criticised
the measure, arguing that ‘if the government is going to spend $3 to earn just
$1 back, it should be better invested on measures that genuinely help people to
engage with, find and maintain attachment to work’.
A spokesperson for Assistant Employment Minister, Luke Hartsuyker, is reported
to have defended the cost, insisting that the government ‘is committed to
reducing the costs and red tape burden for employment providers, and other
organisations, of non-attendance by job seekers at appointments and
The Budget provides $25.2 million over four years for
measures that seek to improve access to employment services for people with
disability. The package is made up of:
$9.0 million over three years to create a JobAccess Gateway—a
central point for disability employment information and services
$2.2 million over four years to extend Disability Employment
Services (DES) to young people with a disability who are participating in
post-school employment programs and
$14.0 million over four years to allow people with a disability
who are employed in Australian Disability Enterprises (ADE) to access DES
support for up to two years to help them move towards employment in the open
labour market. Currently, people must leave their ADE in order to access DES
The measures are to be funded through savings achieved by
introducing a new benchmark under which DES providers are paid an outcome fee when
job seekers who are assessed as having the capacity to work at least 23 hours
per week gain this amount of work. Currently, providers receive an outcome
payment where job seekers gain 15 hours work per week, despite having a greater
assessed work capacity.
The disability sector would appear to be broadly supportive
of the package of employment measures, with Craig Wallace, President of People
with Disability Australia, describing it as the beginning of a long-awaited
comprehensive jobs plan.
Following the cessation of funding for programs that fell
under the National Partnership on Youth Attainment and Transitions (which
focused on those aged 15 to 24 years and young people at risk) at the end of
2014, there have been no youth-specific employment-related government initiatives,
with the exception of the Job Commitment Bonus.
The relatively successful and well-regarded Youth Connections program that
provided individualised support to young people at risk of not attaining Year
12 (or equivalent) education was one of the programs for which funding was not
The emphasis in last year’s Budget was on activating
unemployed young people through the use of coercive measures. The most severe
of these was the measure which sought to introduce a six-month waiting period before payment commenced for a majority of Newstart Allowance (NSA) and
Youth Allowance (YA) claimants aged under 30 years (this has been revised to a
four week wait for under 25-year-olds in this year’s budget—see budget review
article). In the face of sustained opposition to this measure from a number of
quarters, and calls from the community sector for a new approach to assisting
unemployed young people, the Government has developed the Youth Employment
The Strategy is well-structured and, indeed, best
practice, inasmuch as it supports intensive interventions for disadvantaged
young people who are at risk of becoming disengaged and long-term unemployed.
The Budget’s emphasis on work experience, earlier access to the Youth Wage
Subsidy, and coordinated regional support for young people at risk, is likely
to assist some young people in moving towards employment.
A number of commentators have observed that
the Strategy represents an important first step in tackling youth unemployment.
If sustainable employment outcomes are to be realised for disadvantaged young
people, however, then this is likely to demand ongoing intensive support for
them, as well as more jobs and employers who are willing to hire young people.
As such, much will depend on the success or otherwise of the Budget’s Growing Jobs
and Small Business package. Should small business owners be unwilling or unable
to employ young people, then an alternative strategy for increasing
productivity and investment in jobs for young people may be required.
Australian Bureau of Statistics (ABS), Labour
Force, Australia, Apr 2015, cat. no. 6202.0, ABS, Canberra, 2015. As Table
17 shows, as at July 2009, the end of the global financial crisis, the rate of
unemployment among those aged 15 to 24 years was 11.9%. At April 2015, the rate
The budget information in this article has been taken from the
following document unless otherwise sourced: Australian Government, Budget
measures: budget paper no. 2: 2015–16.
Brotherhood of St Laurence, Youth
Employment Strategy: action started to address crisis of youth joblessness,
media release, 12 May 2015.
Australian Council of Social Service, ACOSS on Budget 2015: better
direction but lower income earners still doing the heavy lifting, media
release, 12 May 2015.
Wage Subsidy is targeted at job seekers who are aged 50 years or over and
who have been unemployed or on income support for a minimum of six months.
Under current arrangements employers are paid $3,000 after six months, $3,000
after 12 months, $2,000 after 18 months and $2,000 after 24 months.
See B Shields, ‘Key
Abbott government employment scheme struggles to meet target’, The Sydney
Morning Herald, (online edition), 2 January 2015.
D Hurst, Federal
budget 2015: job seeker penalty increases to cost more than savings, The
Guardian, (online edition), 14 May 2015.
M Fifield (Assistant Minister for Social Services) and S Morrison
(Minister for Social Services), 2015
Budget to support NDIS roll-out, disability employment and carers,
media release, 12 May 2015.
People with Disability Australia, 2015 Budget:
modest but welcome measures for disability, media release, 12 May 2015.
See also Australian Federation of Disability Organisations, Moderate
budget promotes employment but leaves people with disability and family
organisations in limbo, media release, 13 May 2015.
See Department of Employment (DoE), ‘Job
Commitment Bonus for Young Australians’, DoE
For interim evalutions of the Youth Connections program see Danolopartners,
evaluation of the National Partnership on Youth Attainment and Transitions: a
report for the Department of Education, Employment and Workplace Relations 2
April 2012, pp. 154–5 and Danolopartners, Second
Interim Evaluation of the National Partnership on Youth Attainment and
Transitions: a report for the Department of Education, Employment and Workplace
Relations 21 December 2012, p. 46.
The Brotherhood of St Laurence (BSL), which has an ongoing campaign on
the issue of unemployment, has been especially active in pushing for policy
action on youth unemployment. See BSL, ‘Youth employment – My
chance, our future’, BSL website.
For example, see: Organisation for Economic Cooperation and Development
to a good start? Jobs for youth, OECD, Paris, 2010; and International
Labour Office, Increasing
the employability of disadvantaged youth, Skills for Employment policy
brief, ILO, Geneva, 2011.
For example, see: ProBono News, Jobs
and employment strategies a good start, media release, 13 May 2015.
All online articles accessed May 2015.
For copyright reasons some linked items are only available to members of Parliament.
© Commonwealth of Australia
With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.
In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.
To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.
Inquiries regarding the licence and any use of the publication are welcome to email@example.com.
This work has been prepared to support the work of the Australian Parliament using information available at the time of production. The views expressed do not reflect an official position of the Parliamentary Library, nor do they constitute professional legal opinion.
Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library‘s Central Entry Point for referral.