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Speech by Senator the Hon Ursula Stephens

Royal Melbourne Institute of Technology (RMIT) forum ‘The Global Financial Crisis and Australia’s Young People’ Video Presentation

Location: Royal Melbourne Institute of Technology (RMIT) forum, Melbourne

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Hello everyone and thanks to RMIT for inviting me to speak to you about the global financial crisis and what it means for young people in Australia.

I’m sorry I’m not here in person – but in Parliament we’re preoccupied with this very issue – and how we can buffer Australia from the harshest impacts of a financial crisis that isn’t of our making, but which will have real consequences for us as a nation.

I acknowledge the wisdom and culture of our first Australians and congratulate RMIT for convening today’s open forum to discuss how young people in Australia will fare in these difficult times of economic uncertainty. This is an issue of utmost importance to the Australian Government and I’m disappointed that I can’t hear from you directly, but I understand that one of you will be presenting the outcomes of the forum and your key concerns to government and I look forward to getting that feedback.

I don’t want to be alarmist, or a nay-sayer, so I think it would be helpful for me to frame the discussion that comes after my presentation with some facts, and the government’s policy responses; then I’d like to pose some questions for you to think about.

In Australia there are about 2.9 million young Australians aged 15 to 24. Each one of you has different circumstances, needs, aspirations and dreams. You represent our future – you’re the leaders of tomorrow – that’s so much more than a cliché, it’s what guides our policy making in government. We have a responsibility to support you to make the transitions to become healthy, engaged and responsible adults so that you can look after us, and the country, in our old age.

In fact this is a national priority, and in the current economic circumstances, we can achieve this only if we do two things: firstly we have to focus on minimising the negative impacts of the economic downturn on young Australians, and secondly, we have to ensure that young people who are already facing disadvantage aren’t left further behind.

Already youth unemployment is now 9.9 per cent nationally, more than double the overall national unemployment rate. So, nearly 3 million young Australians and almost 10% are unemployed – that’s about 300,000 young Australians who are particularly at risk in this time of economic uncertainty.

We have been working hard to help improve the links between young people and the institutions that build their security, opportunity and hope for the future and we’ve stepped up our efforts to support our young Australians.

To begin with, we want to encourage young people to stay at school, because it’s proven that levels of education impact on life chances for all of us. We want young Australians to benefit from our education revolution – so we’re investing massively in improving teaching and learning, technology, subject choices and pathways, VET courses, and trades training centres in high school to help students to gain a qualification before leaving school.

We’re doing this because we know that during periods of economic downturn young people can be particularly affected. If you haven’t finished your education or don’t have training qualifications then you are definitely more vulnerable to changed economic circumstances.

You won’t remember the economic downturn of the early 1990s, but then full-time unemployment for young people aged 15 to 24 soared to around 20 per cent, with serious long term consequences. Even though the economic circumstances are different today the risk of high youth unemployment is very real.

You can probably confirm what we’re already hearing – that many large employers of young people such as in the retail, hospitality, building and construction sectors are feeling the pinch and are scaling back shifts and putting staff off. And these stories are even tougher for regions across Australia that already have a relatively high youth unemployment rate.

So, you can see why as the government, we’re worried for your sake. That’s why our broad commitment to creating a stronger, fairer Australia through our social inclusion agenda, is only going to become more important in light of the changing economic circumstances.

The premise underlying this agenda is that we believe all Australians need to be given the opportunity to participate. It’s about enabling all Australians to engage in work, to connect with your friends, family and community, to access the services you need in a timely way and to have a voice in decisions being made about the things that will affect you most.

It’s especially about giving people a voice. I recently met with a Melbourne-based organisation called Taskforce – a great bunch who work with disadvantaged young people who have opted out of school, their families, their communities – some have even tried to opt out of life.

The Taskforce team reminded me that without hope, people don’t feel they have a future, so their job is to rebuild lives by rebuilding hopes and dreams, optimism and opportunities. They also told me about the transformation that takes place in people’s lives when their experiences are acknowledged and when they are able to tell their story and have someone listen. That’s why it is very important to have a voice.

Tim Costello, the CEO of World Vision, recently said to me that crises also present us with opportunities. Opportunities to think differently about how we do things, how we work collaboratively and how to be smart, clever and innovative in our policy responses.

Our social inclusion agenda challenges us all to think very differently – because it is about seeking out the causes of social exclusion, not just the consequences of exclusion, and re-thinking about the ways we work to deliver services to make a lasting difference in people’s lives.

That’s why we have focused so much of our early Social Inclusion work on prevention and early intervention – supporting jobless families, especially those where the adults have been unemployed for long periods . We want tackle the issues of couch surfing and homelessness; and we especially want to change the lives and circumstances of Australians living with the challenges of mental illness or disability.

One of our important lessons has been that deep disadvantage in Australia is not only intergenerational but is also locational. You might want to look at Professor Tony Vinson’s research findings- ‘Dropping off the Edge’. His work shows that 1.7% of postcodes account for more than seven times their share of the major factors that cause poverty and disadvantage. It’s sobering to think that a baby’s destiny is almost predetermined because of where the family lives – but that’s what his statistics are telling us.

What we have to do as a government is find practical ways to turn that situation around, because such entrenched disadvantage represents a loss not only to those individuals and their communities, but also to the nation.

So, what opportunity does the current economic situation present for young people?

First of all we know that during downturns many young people choose to remain in education for a longer period or to take up training. In 1992, for example, the Year 12 school retention rate peaked at around 77 per cent, the highest in the last 20 years. That’s why increasing work, work experience, training and education opportunities is central to the Australian Government’s response to the global financial crisis.

Last October we announced a $10.4 billion Economic Security Strategy that was aimed at boosting spending and economic activity to keep people in work.

Just last month, we went further by announcing a massive $42 billion Nation Building and Jobs Plan. This vital stimulus package is expected to add 2 per cent to Gross Domestic Product and support approximately 90 000 jobs-many for young workers and apprentices.

The package includes:

  • $14.7 billion in infrastructure spending-called ‘Building the Education Revolution’-for 9540 Australian primary and secondary schools, including for the construction of more trades training centres in schools;
  • $2.6 billion ‘Back to School Bonus’ – which provides money to support students and their families, including $950 for each person on Youth Allowance who is at school or in training;
  • $511 million Training and Learning Bonus-that translates into a $950 incentive payment for each person not in work who enters training;
  • $6.6 billion to boost the national stock of social housing by around 20 000 houses and housing units and to repair a further 2500 dwellings, all aimed at stimulating the construction industry and providing opportunities for work;
  • We’re also investing $146 million to securing Apprenticeships and Traineeships by providing employers up to $2800 each in wage subsidies and bonuses to help re-employ retrenched apprentices, so that they can complete their trades.

We also know that historically training rates decline during an economic downturn. This often leads to skill gaps when the economy picks up again. We want to prevent this by investing in skills training so that when things improve we’ll have a skilled and ready workforce. We’re planning a huge investment of $2 billion over five years. The Productivity Places Program, which has already helped 80 000 people gain a qualification, will be an important shock absorber during the current crisis. It will put people-both retrenched workers and the longer term unemployed-in a better position to take up work as vacancies pick up. As well, the new model of employment services begins in July. It is designed to give intensive support to those most at risk of long term unemployment and will have specialist services for young people.

We’re thinking through the other opportunities that can be generated too. Opportunities like micro-finance and no interest loans, and chances to generate new businesses like social enterprises, especially around green jobs – energy efficiency and alternative supply, water quality and services, retrofitting and insulating homes and environmental conservation activities.

For those already enrolled at Uni we’re focusing on your long-term job options – with big incentives to convert your degrees to teaching maths, sciences and languages, nursing and early childhood development. We’re making long term investments in university campuses and facilities. All this is geared at positioning Australia beyond the economic downturn – we need to have our eye both on the short and the long term.

For those who’ve just graduated and haven’t found work, we’re thinking through placement schemes which can keep you connected to your profession and maintain your skills. And for those who are recently unemployed we are putting in place measures to ensure you have access to support services straight away.

In all our thinking, we are getting good advice from young Australians. We now have an Office for Youth within the Education and Employment portfolio and a Youth and youthful Minister in Kate Ellis. She is hearing young Australians speaking out on issues of concern and influencing the political process through the Australian Youth Forum and she convened a special 2020 Youth summit which raised a lot of great ideas we are trying to convert into good policy.

My own boys tell me that all this doom and gloom is starting to really worry them and that I have to lighten up! They tell me the government has to remember that most young Australians are optimistic, happy, creative and full of energy for new things. Youth volunteering for example has sky-rocketed in recent years – with lots of young Australians deciding to have a gap year and do something interesting before heading back to the books and the internet makes all that so much more possible.

It’s important for us to remember that – and to encourage your creativity and ideas. So, this is where my questions to you begin:

What else would you like to see the government doing to help young Australians weather the economic storm?

Have you thought about the things you can do to manage if things get really tough?

And, now that you know where we’re focusing our energies, where are the opportunities for you and how are you going to take advantage of them?

Thanks very much for your time today. I’m looking forward to your ideas and feedback – I hope your forum is very constructive – and don’t forget – we need to hear your voice!