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May 19, 2014

War on kids: budget just latest attack on younger Australians

The federal budget measures targeting young people are just part of a much wider policy attack on younger Australians.

One of the most common criticisms of last week’s federal budget was the extent to which it targeted young people. Critics correctly noted a range of measures targeted at younger generations:

  • Unemployed people under 30 will, unless exempted, be prevented from accessing Newstart for six months, and then kicked off it after six months, at a time when the government forecasts unemployment to rise by over 50,000;
  • People under 35 with disabilities face being moved off the Disability Support Pension and onto Newstart;
  • Apprentices will lose nearly a billion dollars from the abolition of the “Tools For Your Trade” program and will face significant costs, and higher debt, if they want to take on an apprenticeship;
  • Graduates will be required to contribute more to, or accelerate their repayment of, higher education loans by $4.3 billion over in the next four years. Those undertaking postgraduate degrees will also have to pay more;
  • Younger people will be the ones who have to work until they’re 70 to support the health, welfare and aged-care systems looking after older generations; and
  • University fees will also be deregulated to enable tertiary institutions to begin charging hundreds of thousands of dollars for courses.

There’s particular irony in the government’s changes to higher education funding given who is doing it. The average age of Tony Abbott’s cabinet is around 53 — a generation of men who benefited from free higher education. Treasurer Joe Hockey, for example, who was at Sydney University at the same time I was, would have only paid the “administration fee” introduced by Labor in the mid-1980s for his law degree; it wasn’t until the end of the 1980s that the Higher Education Contribution Scheme was introduced by the Hawke government.

For young people considering study or training options who don’t have family resources to fall back on — parents who can help them pay their way through a degree, or buy them trade tools — the future looks considerably bleaker now than it did before last Tuesday.

But this focus on how the budget affects the young is misleading, because its measures are only the most recent, and relatively small, part of a much wider array of policies skewed against them but so embedded in our political and economic culture we barely see it. The government insists that its budget strategy is about ensuring we don’t saddle future generations with debt. But the path back to surplus will take so long partly because while the government is cutting Newstart payments, punishing students and targeting low-income earners, it is handing out largesse to other groups.

For example, all companies below $5 million in revenue (which will include large companies able to restructure themselves accordingly) will be given a 1.5% tax cut, costing nearly $10 billion over forward estimates. The already massive cost of superannuation tax concessions, which flow disproportionately to high-income earners and middle-aged and older Australians (and usually men, rather than women), will rise from $30 billion this year to $50 billion in 2018. And the $80 billion in cuts to funding for health and education will flow through into poorer health and educational outcomes and more fragmented health and education systems.

As a sort of bow on the gift-wrapped government present of cuts, not even immunisation, which faces a battle against the dribbling lunacy of anti-vaxers, will be exempt from the bulk-billing co-payment.

“… as a society, we’re engaged in an economic war on our younger citizens.”

One of the front lines of this war on the young is the government’s refusal to countenance any action on climate change — even to the extent of announcing the end of Direct Action before it had even begun. Indeed, large CO2 and other greenhouse gas emitters — those responsible for Australia’s contribution to climate change — will benefit by nearly $10 billion from the abolition of the carbon price. Failure to address climate change now is a vast inter-generational shift in wealth from Australians who will live in the second half of this century – and who will face lower economic growth, higher prices, fewer jobs and higher taxes as a result of it — to our own, so that we can enjoy a standard so living so neglibly higher that it is no longer even noticed by consumers.

And both sides of politics have resisted doing anything significant about housing affordability beyond talking about it — meaning property owners (whose homes are exempt from capital gains tax) and those with sufficient income to take advantage of negative gearing are privileged over those entering the housing market. This complements the resentment of existing property owners toward increasing the density of housing in established suburbs and the unwillingness of state and local governments to provide the land and infrastructure needed to significantly increase housing stock, ensuring younger people are priced out of the housing market in major population centres. Both negative gearing and the capital gains tax exemption also have significant revenue impacts that cost governments tens of billions of dollars of year, but remain untouched by policymakers.

Thus the short-term measures targeting people under 35 in the budget occur in a broader policy landscape of deeply embedded long-term policies against their interests. And that landscape is one in which the government’s generosity to previous generations — free education in the 1970s and 1980s, middle-class welfare and generous pensions in the noughties — is shut down for them under the insistence that it’s doing them good, that they must pay their own way and support an ageing population as well.

This policy bias against the young and future generations isn’t a monopoly of one side of politics. Both sides at the federal, state and local level have presided over a de facto housing policy that favours home owners over young people for generations; it was Labor that dramatically ramped up higher education costs and began the commodification of higher education that has turned education into just another service and export industry. Moreover, the Left has its own particular way of waging war on young people, which like the Coalition’s is dressed up as being for their own benefit. The Left specialises in paternalistic demonisation of young people, insisting, in the face of constant evidence to the contrary, that young people are prone to alcohol abuse and violence and regularly calling for the drinking age to be lifted, places where young people socialise to be shut down and social media somehow censored.

But the symbolism of the budget attack on the young is apt: targeting young people appears to be a particular characteristic of the Coalition, a government of middle-aged and old white men heavily reliant on middle-aged and old white men for advice, with a policy agenda of ensuring economic and fiscal benefits continue to flow to people like themselves while the rest of Australia “shares the burden”. The Coalition has form on trying to block measures designed to encourage young people to enrol to vote, perhaps under the misapprehension that young people tend to automatically be progressive, although the simple maths of the Australian electorate are that the fewer non-older Australians are enrolled to vote, the more influence older Australians have, and they are strongly attached to the Coalition.

But regardless of whether the Coalition is the more determined opponent of the young or not, the budget is unusual only in making apparent what is normally ignored as business-as-usual: as a society, we’re engaged in an economic war on our younger citizens.

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72 comments

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72 thoughts on “War on kids: budget just latest attack on younger Australians

  1. paddy

    Nailed it pretty well there Bernard.
    Abbott as the champion of the anti-vaxers is particularly gross.
    Just as well it appears that Clive is too canny an operator to get sucked in to that piece of garbage.
    It appears (at least from my twitter feed) that @CliveFPalmer confirms PUP will vote AGAINST raising the pension age,GP co-payment & 6mnth delay in receiving newstart

  2. kevrenor

    I’m an older whitish male, and this isn’t done in my name!

    I have three kids with HECS/HELP debts, but even if I didn’t my grandchildren deserve a better future.

  3. MJPC

    Thank you BK for encapsulating the issues for youth from this budget.
    There is only one positive; that being Abbott and his crew are stirring up youth to protest, something that has been missing for many years, but needed now more than ever on so many issues.
    No LNP imposter will be able to visit any higher learning centre without the possibility of protest action action against them.
    Todays: Sophie Mirabella who was at a Melbourne Uni (another LNP snout in the trough) received a rousing welcome for her diatribe on the new world order of LNP privilege; Revoultions always come from below.

  4. Laura Curtis

    Thanks for this Keane. I’ll have to show this to my parents – socially liberal to the point of being bleeding hearts, yet they still insist that houses only seem expensive and that if I just considered the fact of wage inflation, I’d see that it’s just as easy for me to get into the market as it was for them in the late 1970s. D’oh!

  5. Venise Alstergren

    “”…Coalition, a government of middle-aged and old white men heavily reliant on middle-aged and old white men for advice…”

    BERNARD, If the old white men had any brains I could learn to live with your description of old, middle-aged, etc. BUT why, oh why did Tony Abbott scrape the bottom of the rusty old boiler and come up with has beens, don’t wanna bees and men whose ears are bookends on a vacuum?

    How is it remotely possible to go forth and pick out the dregs in the electorate; idiots like Eric Abetz, George Brandis, Scott Morrison and Christopher Pyne and put them to running a country? The emperor Nero may have fiddled while Rome burned which puts him several kms ahead of Tony Abbott who has only giggled while watching Hockey-lighting the flame.

  6. The Pav

    I guess that if under 30 year old Australians are to receive a lesser amount than the rest does this mean they they are now exempt from things like conscription?,

    I eman at 18 you can
    vote
    drink,
    enter into contracts etc etc

    so on what basis is there an age discrimination for payments?

  7. JohnB

    “Old white men”.

    Where does that leave the Speaker of the House of Reps, Bronnie?

  8. Gary Carrol

    The real question is, will Abbott be allowed to get away with his pre-election lies. And will the print and electronic media be permitted to pursue Abbott as he should be. Probrably not !

  9. Dogs breakfast

    “we’re engaged in an economic war on our younger citizens.”

    That we are BK.

    And don’t think that there are plenty of middle aged white males out there, like me, who have children, and are disgusted by what looks like the most unfair budget in my lifetime.

    And I would wager there are plenty of childless middle aged people who are outraged by it as well. It isn’t just if you have children or not, it is about one’s sense of fairness.

    The dole changes, the unregulated uni fees AND the increasing of the interest rate on HECS/HELP, are a terrible squaring up against the youth.

    The lack of action on superannuation rorts and negative gearing are ideological signposts on where this government comes from, and is determined to head to.

    Hell in a handbasket.

  10. David Hand

    An economic war on younger people? I’m shedding a tear as I contemplate the awful prospect of our younger citizens going without backpacking holidays in Kathmandu or missing out on Oktoberfest in favour of study.

    How could the Coalition be so, how did you put it Bernard “waging economic war on our younger citizens”?

    Sob!!

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