Matters of Interest

Newstart Allowance

The Hon. T.T. NGO (15:24): Today I would like to express my concern over the Abbott government's changes to the Newstart allowance that will negatively impact our youth. Axing the Newstart allowance for up to six months is not the solution to our high youth unemployment rates. It is abandoning our youth when they may need the most help. It is interesting to note The Daily Telegraph reporting a couple of weeks ago that this was a measure that was reportedly considered too harsh by senior members of the Coalition government such as ministers Eric Abetz and Kevin Andrews. Nevertheless, it was included in the 2014-15 federal budget on Mr Abbott's insistence.

As an applied science in computing and information economy graduate, it took me close to 12 months to gain employment due to the relatively small IT industry in South Australia. Those 12 months I spent time knocking on doors and doing a lot of work experience. If I was forced to wait six months for an allowance, I may have had to take up the Abbott government's suggestion and work as a fruit picker. I would not have had the time to build up my work experience in the IT industry. I am sure that at this moment there are thousands of South Australian students in a similar situation. Repeatedly telling them that they should get a fruit-picking job is not a solution. It is selling our students short.

The Abbott government's own papers tell them that up to 65,000 or 30 per cent of graduates will be jobless four months after finishing their degree. Starting salaries are also predicted to fall and will be worse from 2016-17. At the same time, student debts are expected to soar due to deregulation of university fees. This evidence demonstrates that graduates should be entitled to six months or a year on Newstart to look for work in the first instance, not the other way around as proposed by the Abbott government where young people will need to wait to receive Newstart for up to six months.

One of the key elements of the original changes proposed to the Newstart allowance was the mandatory requirement for job seekers to apply for up to 40 jobs or face their benefits being cut off. This proposed mandatory requirement was prohibitive to people trying to gain work experience to enable them to gain employment in a field relevant to their studies. It also would have placed a huge burden on employers who would have been swamped by large numbers of job applicants placing a large cost burden on their organisations. The Abbott government has since reversed this decision, returning to the current requirement of 20 job applications a month.

Changes to Newstart come at a time when our youth will face huge debts due to the deregulation of university fees. It also comes at a time when university students continue to graduate from fields where there is little or no demand for employment in their relevant industry. As I have said previously in Matters of Interest, maybe the Abbott government should focus on its reforms in the tertiary sector rather than punish our youth who are trying to build up their experience to get a job. Newstart does not give people enough money to live comfortably, but it can help young people to get by. If we do not provide this support for up to six months, we will be leaving our young generation behind.