Address to the Sydney Institute ‘A Square Deal for Families and Young Australians’
Our place in the world and the lifestyle we have worked hard to achieve cannot be taken for granted. We will continue to succeed so long as we choose to do so.
More than a hundred years ago, when our nation was just beginning, Teddy Roosevelt described the key to national greatness as being “found in the average citizenship of the nation”.
Roosevelt argued that “common sense, the power of accepting personal responsibility, yet acting in conjunction with others, courage and resolution” were “the qualities which mark a masterful people”.
He said each person should be treated on their merits and worth as an individual – that they should be given a ‘square deal’, because they are ‘entitled no more and should receive no less’.
Such a belief in the power and responsibility of each individual sits at the heart of our Liberal philosophy, from Menzies to Abbott.
The Abbott Government is working to set Australians up for success on these terms.
We want to unlock the capacity of all Australians to enable them play their part in our nation’s future and share in Australia’s ongoing success.
Australians look to their Government to provide the stability, certainty and direction that enables them to plan for their future with confidence in an increasingly uncertain world.
The decisions we are taking and the actions we are implementing as a Government are designed to achieve this goal.
As we make necessary changes, we must do so in a way that allows people to adjust to and benefit from the changes we are making.
We must continue to be up front about the challenges we face, while being sympathetic and understanding of the concerns that many Australians may have about how we address these challenges.
And we must keep looking forward with an optimistic spirit, never losing sight of what we can and are trying to achieve for the good of all Australians, both today and in the future.
As we approach the Centenary of ANZAC we are reminded about what we have inherited from those Australians who came before us – a free and secure nation, a strong economy, a cohesive society, the most successful immigration nation on earth, a fair and generous safety net for those who really need it and above all the values that have made all of this possible.
It is our responsibility as Australians and as a Government to honour these values, preserve these gains and pass on an even better Australia for future generations.
This is the test of good government and the test that the Abbott Government applies to itself every day.
In the social services portfolio this means running a welfare system based on need, rather than entitlement.
It means understanding that the best form of welfare is a job.
Welfare cannot be a career choice for Australians.
During the period of the Howard Government the percentage of Australians of working age receiving income support payments fell from almost one in four to less than one in six. At the same time the number of working age Australians in jobs increased from just over two thirds to almost three quarters.
Welfare must be there for those who need it, not just today but future generations as well, and it must be provided in a way that provides a pathway off welfare as soon as possible, for those who are able.
Even then it must be delivered in a way where Australians can still take some responsibility for important choices in their lives. This is why recent changes favouring consumer directed support in aged care and the NDIS are so important.
We are currently spending $150 billion a year in the social services portfolio – more than 9% of GDP – more than a third of the federal budget – more than twice the size of the entire NSW State Budget.
Such a sizeable investment in our safety net sets our society apart. It is a national asset.
But to maintain public trust in this important institution we must run a welfare system that respects the taxpayer as much as it does the beneficiaries.
There is no free welfare – a benefit paid to one Australian is a benefit paid for by another.
It takes more than eight out of ten income taxpayers to go to work every day just to pay for our welfare bill.
So this is a balance we must strive to maintain.
This evening I want to focus on the square deal needed for families and young people.
According to the last census, there were 1.47 million two parent families in Australia where both parents worked. This is around two thirds of two parent families. There were an additional 484,000 single parent families where the sole parent was in work, more than half of all single parent families. This is good news.
The increasing number of two income families and the increase in single parent families in work has been one of the key generational economic and social changes over the past 20 to 30 years.
Less than one in five families in Australia in 2011 were single income two parent families.
In our modern economy, for many families the decision to stay in work or go back to work is not a choice. It is the only way they can ensure that they are able to preserve the choices they want for their families rather than become dependent on income support and welfare.
This is also true for the 614,000 families in Australia where still no parent is working, including more than 400,000 single parent families. For the sake of their children, at the very least, we need to get these families into work.
12 per cent of Australian children are growing up in jobless families of which 42 per cent are single parent families. Almost 40% of children who grow up in a job less family will be welfare dependent by the age of 22.
We must do better than this.
Getting families into work or staying in work is as important an economic challenge as it is a social goal for our country.
According to ABS data, of the five and a half million people not in the workforce, three and a half million – more than 60 per cent – are women aged 18 or over.
The Grattan Institute has estimated that if we could catch the Canadians with six per cent more women in the paid workforce, the size of the Australian economy would be increased by about $25 billion per annum.
Supporting access to quality and affordable child care is a critical factor in delivering on these objectives.
Child care support is not just a social and educational subsidy, rather it has become an important economic policy lever.
The quality of child care and early childhood learning today means that where parents can access these services, they can go to work and be confident about their children’s care and development. These quality standards need to be maintained.
The Australian Government currently pays two thirds of the child care bill in the country through fee assistance of almost $7 billion, in a bid to make child care more affordable. Without any changes this cost will rise to $10 billion within the next three years.
Despite this there are still an estimated 165,000 Australian parents with children under 13 would like to work, or work more, but are unable to.
While many factors influence a family’s decision about workforce participation, the Productivity Commission has identified the lack of affordable and accessible childcare as a critical one, especially for middle to low income families.
The Productivity Commission found that the current system for delivering support was unnecessarily complex, arguably inflationary and failed to target support where it would have the biggest impact on workforce participation decisions, especially for mothers.
Families should not be faced with the choice of either being forced to leave work when they have children or working just to pay for child care.
This is the kitchen table conversation parents are having today.
We want child care to work for families rather than families having to work for child care.
The Commission was also highly critical of the way support was delivered to genuinely disadvantaged families, where financial support for early childhood learning is less about workforce participation but more for the wellbeing and development of the child.
The current system tries to be all things to all people. It also uses quite broad brush measures, such as the community support and JET programmes as well as the child care benefit to address quite specific disadvantage needs. The result is to compromise on all the objectives and in some cases flagrant abuse.
In our first year my Department, working with the Department of Human Services and the AFP, prevented an estimated $70-90 million in child care assistance rorts by some 60 operators.
The Government is finalising our response to the Productivity Commission report. We wish to craft a child care system that is simpler, more affordable, more flexible, maintains quality standards and most importantly one that reduces the barriers to workforce participation.
More specifically, we believe there is a strong case to deliver a new set of arrangements that:
- consolidates the various existing programmes into a single mainstream subsidy scheme focused on workforce participation that directs greater support to middle to lower income families, utilising an alternative to the benchmark pricing method recommended by the Productivity Commission and providing payments direct to service providers,
- ensures a greater linkage between the provision of mainstream fee subsidies to workforce participation activity, be it work, looking for work or studying,
- opens up more flexible options for families who cannot rely on mainstream services because of the nature of their work or other specialised requirements, and
- delivers more tailored assistance to genuinely disadvantaged families and children which may arise from a vast array of factors including special needs, poverty and the under supply of services due to the remoteness of location or the commercial costs of providing services in particular locations, just to name a few.
Our more detailed response will be released between now and the Federal budget.
In this year’s budget we will also seek to provide a square deal for young people, to release them from a life on welfare, and realise their potential.
We simply cannot allow or afford for a generation of young Australians who are currently not learning or earning to be written off.
While the majority of young Australians move successfully between school and post-school education or employment, there are too many who find this transition difficult.
The unemployment rate for young people is more than twice that for Australians overall.
The national unemployment rate is just over six percent and youth unemployment is nearly 14 per cent.
What is more, since the global financial crisis, the rate of youth unemployment has increased substantially more than the rate of overall unemployment.
In February this year roughly 290,000 young Australians were unemployed, with approximately 180,000 on Newstart or Youth Allowance.
Around one in five young Australians are not fully engaged in either work or study.
Particularly worrying are figures that show that young people account for around 30 per cent of long term unemployed.
Such a scenario poses serious concerns for national productivity and individual well-being. The two are linked, and as the Brotherhood of St Laurence says:
An extended period out of the workforce for a young person in this most formative period of their lives places them at risk of a life sentence of poverty and exclusion from the mainstream of our society ….
The solution is clear ….. invest in young people now … this national task is as vital as building roads, railways and ports.
Research tells us that early intervention to build soft skills and to set a vision for their working future is fundamental to assisting young people at risk.
Starting on 1 July 2015, Jobactive will replace the current Job Services Australia.
As part of Jobactive there are new, additional services to help young job seekers find and keep a job.
These new services are targeted at those young job seekers who are fit and able (ie Stream A) – and are designed to promote a ‘work-first’ approach among young people.
The new servicing includes more frequent contact with the providers (ie monthly contacts) and signing up to a Job Plan that will outline what they will do to become more job ready and satisfy their mutual obligation requirements.
There will be a requirement for six months of Work for the Dole for 25 hours per week.
Other approved activity includes part time work, part time study in an eligible course, participation in accredited language, literacy and numeracy training or voluntary work.
Work for the Dole Coordinators will start on 1 May 2015 to source suitable Work for the Dole activities in not-for-profit organisations such as local councils, schools, community organisations and state and federal government agencies. These activities will help prepare job seekers for the work environment.
Young job seekers under 30 who have been unemployed for 12 months or more can receive a bonus payment of $2,500 if they find a job and stay off welfare for 12 months. These same job seekers can receive a further bonus of $4,000 if they remain in work and off welfare for a further 12 months. Around 28,000 young people are on track to receive this bonus in the second half of this year.
Young job seekers can also access the Relocation Assistance to take up a job programme which helps meet the costs of moving such as removalists, rent and bond and transport costs.
Job seekers can receive up to $3,000 if they move to a metropolitan area to take up a job and up to $6,000 if they move to a regional area. People with dependent children can also receive up to a further $3,000 to help with the costs of moving. This assistance is proving very popular with young men in particular with many moving to regional areas to take up opportunities.
We are also reforming the vocational education and training systems to better prepare young people for work. Seventy per cent of new jobs created by 2017 will require at least Certificate III qualifications.
Our efforts in this areas includes stronger regulation of registered training organisations.
The Government has also committed $44 million to fund two new pilot programmes to address youth unemployment by supporting businesses to employ young people; and community organisations to help young people return to school, start vocational training or move into work.
And we are encouraging people to train for those areas where skills are needed and which are going to experience growth in the coming years.
Aged care is one. This is another upside of our ageing boom. Deloitte has nominated the sector as one of the 25 high job creating sectors of the future.
Education and training, retail and construction are also areas experiencing significant jobs growth, including at entry level, which we expect to continue into the future.
Among the young people most at risk of the life sentence referred to by the Brotherhood of St Laurence, are those with disability, including a mental health issue, those from poorer families, Indigenous Australians and those with lower levels of literacy or numeracy. There are also challenges for young people who have newly arrived in Australia, especially as part of our refugee and humanitarian programme who are at risk of becoming marginalised.
Some of the work with unemployed young people being done by non-government organisations is also producing very heartening results and deserves support.
The Brotherhood of St Laurence is trialling a Youth Transitions Service in the most disadvantaged areas of Melbourne’s western and northern suburbs.
They know that according to the Household Income and Labour Dynamic Australia (HILDA) data that a young person who is out of work and education between 15 and 20 years of age is four and half times more likely to be out of work by the time they reach ages 25-30, than those who were in work or education.
Their programme is based on enabling young people to become work ready and connect with employment opportunities and, through mentoring support and other measures, to be able to stick in a job.
BSL reports that of those young people taking part in the trial programme, 70 per cent are successfully moving into work or study.
That is great news and shows what can be achieved.
Another are we need to focus on is young migrants, including recently resettled refugees.
These young people bring with them many positive attributes, including resilience and a strong desire to succeed in Australia. However, at the same time, many of them have specific needs.
For example, many young refugees have experienced limited or disrupted education before moving to Australia and their experiences can impact their ability to engage with Australian society as a whole, including participation in education or work.
The backgrounds and specific cultural and social needs of young migrants and refugees are not always understood – including by mainstream services and the workplace. This is often because of the very successful education and employment outcomes achieved in mainstream migrant communities more broadly. This means that more marginalised and vulnerable migrant youth can be overlooked.
Disengagement of these youth poses broader risks to social cohesion, especially when they are concentrated in particular geographic areas in our major cities. Some of them are vulnerable targets for extremist predators in their communities seeking to proselytize, indoctrinate and radicalize.
Racism, discrimination and negative events overseas can create an ‘us and them’ mentality for these young, marginalized, vulnerable people who can clearly down two very different paths. The 2014 Social Cohesion survey conducted for the Scanlon Foundation reported experience of discrimination at 18%, closest to the highest level on record for these surveys.
Now is the time to intervene and ensure they make the right choices and go down the right path.
We achieve this by getting these vulnerable young people into jobs and education and into the mainstream of our community. This means case management and mentoring to develop confidence and overcome educational barriers, language training and employment transition services.
There are success stories in this area and there can be more.
Another area where there is some outstanding progress being made is in the area of mental illness and young people.
Mental illness can start very early and be a huge barrier to workforce participation.
It is estimated that about 75 per cent of mental disorders have developed by the age of 25 which means many young people have missed out on important aspects of their education while a disorder has been developing.
And there are a growing number of young people who have a mental illness. The ABS (2013) advise that 30% of females and 23% of males aged between 16-24 years had experienced symptoms of a mental disorder.
Leaders in the field like Patrick McGorry have done fantastic work breaking the barriers to employing young people with mental illness.
Work that includes providing early intervention and individual support to ensure that young people are engaged to their full potential in the workplace and therefore would need to be in receipt of welfare payments for long periods.
Patrick McGorry’s centre for excellence in mental health, Orygen, published a paper last year on work, education and young people with mental illness.
The paper recommended using an Individual Placement and Support model of employment assistance for young people with mental illness. This model is based on the philosophy that working can have a positive effect on clients’ mental health and that employment is an important part of the recovery process.
The model aims to increase employment opportunities for people with severe mental illness who are at risk of not engaging or dis-engaging with the workforce. It integrates employment and vocational support with mental health and non-vocational support, and focuses on individual needs of people with mental illness who are seeking employment.
This includes rapid job search and placing people with mental illness into competitive employment where they can learn on the job, rather than the currently accepted approach of providing training first, before employment.
Orygen conducted trials on young people aged 16 to 25, who have a diagnosed psychotic illness, and found that those who received assistance were highly likely to find a job and stay in a job. In one trial 85 per cent demonstrated success in achieving employment or educational outcomes, with 60 per cent remaining there 18 months later.
Further measures to get young people into work and escape a welfare life sentence will be contained in this years’ budget as part of our jobs and small business package.
Together with our families package these measures will not only be good for those Australians directly receiving support but they will be good for our country as well.
When you are on welfare the Government defines your choices. When you are not dependent on welfare payments, you are determining more of your own choices.
This must remain our aspiration for every Australian wherever possible, for as long as possible.
That is when our citizens will be at their strongest. As a consequence, and as Teddy Roosevelt said, that is when our nation will also be at its strongest.