A hardline stance won't work for youth unemployment

Scott Morrison may be the Coalition's star performer, but his ministerial ability won't solve the big flaws in the Coalition's approach to tackling youth unemployment.

When Prime Minister Tony Abbott announced his cabinet reshuffle one move stood out among the rest: the appointment of hardliner Scott Morrison to the social services portfolio. Morrison has his critics -- natural for a portfolio such as immigration -- but by virtue of effectively stopping the boats he became a star performer in an otherwise poor year for the Coalition front bench.

As a result, it was not that surprising that he was gifted the portfolio that gave the Abbott government no end of grief last year. But will Morrison be any more successful than his predecessor?

I’d argue that the Coalition’s failure to create momentum for welfare reform sits squarely at the feet of the policies themselves rather than ministerial ability. In more colloquial terms, you can’t polish a turd.

Let’s consider the problem of youth unemployment. The federal government has framed this as a lifters versus leaners debate: the underlying assumption is that younger Australians who are unemployed are simply lazy. They clearly don’t want to work and are therefore a drain on the economy.

The policies introduced in the May budget reflect this world view. They believe that a bit of tough love will do the trick; that by withholding welfare payments from younger Australians they will encourage them to get off their backsides and find a job.

The simplicity of that world view is almost endearing. Wouldn’t it be nice if the world was that simple?

Unfortunately, the reality indicates that we need a more holistic approach to tackling youth unemployment -- one rooted in facts and figures rather than blind emotion.

Since the May election, youth unemployment has emerged as a massive economic issue. Our economy, weak as it is, has systematically deprived younger Australians of the work experience that is integral to boosting productivity and growth in the decades to come.

The unemployment rate for those between the ages of 15 and 24 sits at 14 per cent -- its highest level in 16 years. But that number understates the weakness in the labour market, with the participation rate sitting near a multi-decade low.

The turning point for youth unemployment was the global financial crisis. Employment statistics for the Australian economy show that this was the moment when employment growth slowed. Younger Australians, who often enjoy little job security, were the ones that inevitably lost out.

More concerning is the fact that the situation never changed. The Australian economy, to this day, still doesn’t produce enough jobs to absorb its population growth. Australia is plagued by a lack of opportunity rather than the more easily fixed lack of motivation.

Youth unemployment is high regardless of whether they are studying full-time or not. It’s elevated for both males and females. It’s high across the board, reflecting the dire need for sensible solutions rather than ideological dogma.

For example, the unemployment rate for 15 to 24-year-olds studying full time climbed to 18 per cent in November, rising almost four percentage points in the past year. The unemployment rate for this cohort is at its highest level in almost 18 years.

I doubt that university students have suddenly decided that they no longer need money. Beer isn’t getting any cheaper. There has to be more to it than young people being lazy.

The proposals outlined by the federal government in the May budget appear inadequate. Its centrepiece was to reintroduce the ‘Work for the Dole’ program, which research shows actually makes it more difficult to find a job.

The second part of its approach is to delay welfare payments for those under the age of 30 years. In theory, this approach could work during times when the economy is creating a high number of jobs.

But at the moment that’s clearly not the case, which highlights what the Coalition’s welfare solution should be: creating incentives for job creation and growth. Their policy as it stands effectively punishes the unemployed for having the audacity to become unemployed during tough times.

The whole situation becomes farcical when you remember that the federal government continues to oversee high levels of immigration -- pushing population well above the level of job creation -- and record numbers of temporary 457 Visas.

It’s a completely illogical strategy and, no matter how effective Scott Morrison is as a minister, is a strategy that is doomed to fail. No 'tough love' approach can work if the opportunities don’t exist and right now the labour market for younger Australians is the weakest it has been in around two decades.

It’s time we got serious on youth unemployment. It is a problem -- far greater than our current budget issues -- and one that has serious long-term consequences. We are actively failing our youth and in doing so we are setting ourselves up for economic failure.

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