Flat White

Big government’s war on young Australians

9 August 2017

4:34 PM

9 August 2017

4:34 PM

The major parties, unions and the bureaucracy have declared economic war on young people which threatens to create an invisible underclass locked out of economic participation.

In March, the Brotherhood of St Laurence reported that labour force underutilisation (underemployment plus unemployment) of people aged between 15 and 24 was at its lowest point since the ABS started measuring it in 1978.

That’s lower than the recession of the early 90s and the GFC. It should be the biggest issue in Australian politics but the report went virtually unnoticed.

It’s little wonder that employment for young people remains in such an appalling state given the flavour of the debate following the Fair Work Commission’s decision to cut weekend penalty rates earlier this year.

The CFMEU claimed that the penalty rate reductions were a “war on battlers” and a “war on the fair go”. That’s a pretty hysterical description of a decision that, among other things, reduced the Sunday rates of a fraction of hospitality workers from 175 per cent of Saturday rates to 150 per cent.

In fact, the CFMEU and others like it and are masking the true moral crisis in our industrial relations system – that it keeps people out of work. Exorbitant penalty rates prevent businesses from opening, let alone hiring new staff.


There is no union for the unemployed. The industrial relations system rewards the powerful at the expense of the powerless. That’s how, after 25 years without recession, labour force underutilisation of young people is at its highest rate in four decades (at least).

Another economic injustice wreaked against young people is public debt. As noted in The Australian in February, Australia’s gross public debt will reach $600 Billion in the next three years. That is $23,500 per person and more than $90,000 per person under the age of 18.

The fact that children are born in this country owing the government tens of thousands of dollars should be a source of shame for all Australians. It’s pretty galling for young people to be lectured on the discipline and sacrifice needed to buy a house by older generations when they are indulgently spending in the short term and expecting people that aren’t born yet to foot the bill.

Which brings me to another major area of disadvantage for young people – the property market. Earlier this year, Australia’s house prices growth surged to a seven year high. According to the latest survey by international housing affordability think tank Demographia, Australia has the third most unaffordable property market in the world. Sydney is the second most unaffordable city in the world and Melbourne is sixth.

Sure, no one has a birthright to enter the property market and, as flagged above, for most people buying a house requires discipline and sacrifice. And attacks on negative gearing are certainly ill-advised. However, the fact that housing is so expensive in a country with as much space as Australia is absurd. Fundamentally, this is due to land zoning and planning red tape. New entrants – often young people – bear the brunt of these retrograde policies.

Many like to claim that this is an attitudinal issue – that the reason young people can’t find work or enter the property market is because they have a sense of entitlement and aren’t prepared to “have a crack”.

This is untrue. In an IPA survey of 16-25 year olds last year, 60 per cent of respondents indicated they hoped to open their own business one day. Two-thirds said cutting government spending would help the economy. Young people don’t want a free ride, they just want opportunity.

Social and cultural disconnect between elites and the rest, combined with economic cleavage, has instigated the rise of non-mainstream politics globally. Australia is yet to fully experience that economic cleavage but it is coming. If the major parties want to ensure their own survival, they must remove the barriers that prevent young people from participating.

But that’s hardly the point. Economic participation and personal fulfilment go hand in hand. By placing obstacles in the path of young people entering the economy, we are denying vast swathes of the population lives of value, meaning and dignity.

Peter Gregory is a Research Fellow at the Institute of Public Affairs

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