Alarm over spectre of young, lost generation

In the tumble of news this week a report raising a very big question slipped by with almost no fuss.

The COAG Reform Council - the body that checks whether the Prime Minister and premiers of the day actually achieve the grand commitments they make at all those tedious heads of government meetings - revealed that the proportion of 18- to 24-year-olds neither studying nor working had risen from 23.7 per cent in 2008 to 27.5 per cent last year.

It sounds like another dry statistic until you think about it. That's 620,000 young Australians doing not very much in those years when they need to be doing a lot to start a successful working life and achieving the financial security and personal stability that goes with it.

No one is exactly sure why the number has gone up, or exactly what these people are doing.

''It's perplexing,'' said the council's deputy chairman, Greg Craven. ''And very concerning. For a country that has experienced 20 years of continuous economic growth it is alarming that one in four young people are disengaged.''

''We are there as an early warning system … we are sounding an alert, an alarm, there does seem to be an inadequate rate of participation in work or further study … and this is the sort of thing governments really should want to find out about sooner rather than later.

''We need to find out what these young people are doing.''

It doesn't seem to be a rogue statistic. The findings are backed by a recent report by the Foundation for Young Australians, which found about one quarter of 18- to 24-year-olds were not in full-time education, training or work.

And the possibility it is just young people just taking some time to find their way in the world is largely scotched by the fact that the research was survey based, so school leavers on gap years overseas would not be included in the statistics, although those taking time off at home would.

The council provided only a partial answer. The figure was due to fewer 18- to 24-year-olds in full-time employment (down from almost 46 per cent in 2008 to almost 40 per cent last year) rather than a fall in young people doing an education or training course.

The chief executive of the Australian Industry Group, Innes Willox, thinks it is because the impact of the global financial crisis is still being felt by young workers - they are the first to get sacked or to miss out on jobs and their careers don't catch up in the recovery.

They risk moving directly from the ranks of ''youth unemployed'' to the ranks of ''long-term unemployed'', of becoming a generation lost.

Unionists argue this could also be partly due to the rise of ''insecure work'' - what would once have been full-time jobs being offered as permanent part-time, casual or labour-hire positions.

Whatever the cause, the figures must be galling for the government since this is exactly what then prime minister Kevin Rudd and his then deputy Julia Gillard said in 2009 they did not want to happen.

Gillard insisted the first October 2008 stimulus package include an increase of her ''productivity places'' training program to help victims of the downturn.

As the financial crisis swept the world, Rudd then announced a ''compact with young Australians'' to specifically tackle the predictable impact on young people leaving school to face an employment market offering few jobs.

''We don't want to repeat the mistakes of the past whereby young people who lose their job become the long-term unemployed of tomorrow,'' he said.

The government's answer was to try to make sure the global recession did not result in young people ''doing nothing''.

His ''earn or learn compact'', signed by the premiers on April 30, 2009, was specific and included ''strengthening conditions for welfare payments''.

It said that ''anyone under the age of 20 without a year 12 or equivalent qualification must be in education or training to receive a youth allowance'', and that ''the same condition must be met if the parents of young people in the same circumstances wish to receive Family Tax Benefit Part A … if young people or their parents want to receive government benefits the quid pro quo is that the young person is working or earning a year 12 equivalent qualification''.

It earned glowing headlines such as ''Rudd gets jobless teens training'' and ''Parents Penalty - No School, No Study, No Family Benefit''.

But contrary to the government's specific policy aim, we now know that 620,000 are neither earning nor learning. So why didn't the ''earn or learn compact'' work? It was implemented, for the most part.

Originally the fortnightly family tax benefit payments being received back then by parents of 300,000 young people between 16 and 21 were made conditional, although then the benefit was cut entirely for parents of children over 18. (Parents of 16- to 18-year-olds had their payment raised, with school attendance a requirement, but it was always a legal obligation for most of them to send their kids to school anyway.)

Cutting the eligibility age for FTB A does remove the possibility that parents of youngsters over 18 could receive money while their offspring sit on the couch, but it no longer provides the incentive that they could continue to receive the money if they encouraged (or shoved) the child out the door and into a training course or a job.

Youth allowance recipients are now required to do 25 hours paid work or volunteer work if they don't have a year 12 certificate and aren't trying to get one.

It hasn't been enough. And now spending on vocational training is being slashed by the cash-poor state governments in Victoria, NSW and Queensland - something the Australian Industry Group's Willox says is concerning.

Although the new statistics slipped through the news cycle with barely a ripple, state and federal politicians should take heed.

Because the spectre raised by Rudd could be becoming a reality - the financial crisis might have created a large group of unemployed young people who are falling through the system.

We might have avoided a recession but reaped this social consequence instead.