Today’s young Australians could become the first generation to be worse off than their parents, according to a new report card from the Foundation for Young Australians (FYA).
The latest update to FYA’s report Renewing Australia’s Promise explores the challenges faced by Australia’s young people and the economic cost of them being left behind.
According to the report card, young people face several escalating challenges including “a cloud of rising debt, soaring house prices and the struggle to find secure, full-time employment”.
The report also claimed the “economic cost is real”, and if youth unemployment and underemployment were brought in line with the rest of the population, more than 125 million additional hours would have been worked in 2015, generating up to $11.3 billion in additional GDP.
FYA CEO Jan Owen AM said the report card showed very little has changed since it was first released in 2014, owing to a lack of action from government.
“A lack of investment from government means young Australians today are facing a very real possibility that their generation will be the first to be worse off than their parents,” Owen said.
“This report card shows us that while young people are doing well in some areas, they face a number of escalating challenges that are unique to their generation.
“They are also paying much more for their education than previous generations, yet this is not properly preparing them for work.
“Further, their pay packets have received smaller increases than older age groups and they’re are also taking on more debt to buy a house and are bearing the costs of an ageing population.”
According to the report, government spending on older Australians has increased while government spending on younger Australians has declined over the last 10 years.
By 2054 there will be only 2.7 workers for every retiree in Australia, down from 4.5 in 2015.
“For our nation to be able to support this aging population, our young people need to be thriving,” the report said.
“A lack of attention to the urgent need for investment means Australia is failing to take full advantage of our single most valuable resource – our young people.”
Other key findings from the report card include:
- Young people are 1.6 times more likely to complete year 12 and 1.7 times more likely to finish university than their parents.
- The average cost for higher education today is more than double previous generations and much more than the free education of their parents’ generation.
- It is predicted that more than half of all students and seven in 10 VET students are being trained for jobs that will be radically affected by automation.
- The quality of education in Australia is declining compared to other OECD countries.
- Young people would like to work more, with underemployment increasing by 270 per cent since 1985, from 4.7 per cent to 17.5 per cent.
- On average, people now need to take on a home loan that is 134 per cent of their disposable income, rather than the 32 per cent in 1988.
- It now takes the average Sydney homebuyer 15 years to save a deposit compared to the six years their parents had to save for.
- Not only are young people getting less from the government they are also contributing more as a result of the ageing population.
FYA is now calling on all political parties to invest in the next generation by placing young people at the heart of economic policy and equipping them to drive social and economic progress in Australia for decades to come.
“Australia’s young people are the engine that will drive future prosperity. They’re hungry for the chance to create a better world,” Owen said.
“The recent spike in young people enrolling to vote shows us that they are engaged in the political process and do want to have a say on issues that impact them.
“Leaders from all parties need to start listening to them and take action to equip young people for the challenges they face. We need to ensure they are ready to take Australia and the world forward.
“Policies around young people are too often considered in isolation and placed at the edge of public policy.
“Before this story gets worse, our nation’s leaders must commit to investing in the next generation by placing young people at the center of economic policy.”
FYA has developed an election platform with steps for a future government to take to invest in young people.
It includes a national enterprise skills strategy, development of a coordinated national ecosystem to back young entrepreneurs and creation of regional hubs for youth-led economic development.