Among the most controversial of the measures announced in the May budget was the move to deny 15 to 29-year-olds access to unemployment benefits for up to six months.
This waiting period would be subject to a discount of one month for every full time equivalent year worked to a maximum of five months. There would also be a six month cycle-on cycle-off period over a year.
The Abbott government has thus far not had much luck convincing the crucial crossbench senators of the merits of this scheme, which has been characterised as 'punishing' the jobless for being out of work.
The policy is about reform rather than budget cuts, as it is only estimated to save $1.2 billion over four years. It is mainly about hassling the under-30s to find work. There is some evidence to suggest that periods of joblessness early in life can have a scarring effect on people's future work prospects.
About 60% of recipients of Youth Allowance Other (the payment for 15 to 21-year-olds) have been unemployed for twelve months or more, even though people in this age bracket are aided in job search by youth wage rates. (In general, though, minimum wage rates are a barrier to employment.)
But, there are other policies the government could consider to address youth joblessness.
A CIS report last year detailed how more and more people on unemployment benefits are not required to look for work. Current policy settings mean young people without a Year 12 or equivalent qualification are not required to look for work as a condition of receiving payment. Making job search mandatory as part of the activity test for Youth Allowance Other is a good idea and one that could receive crossbench support.
The Abbott government has also proposed new 'earn or learn' measures to push young people into education and training schemes in order to retain the dole. However, this merely kicks the can down the road and means taxpayers subsidise expensive training courses that fail to produce the desired outcome. Work by CIS Senior Fellow Peter Saunders has shown that education and training are not very effective at increasing job prospects, except for a select few.
Instead of 'more training', the government should consider implementing time limits on Youth Allowance and Newstart for under-30s as an alternative to a waiting period. This would still keep assistance available to those who simply need time to find work. But it would also be clear that this assistance is strictly short-term and intended to assist with a transition to work.
Long-term welfare reliance among youth is a serious problem. Given the cross-bench hostility to waiting times for the dole, alternatives are needed. Time-limits on the dole may be more politically palatable as well, because rather than penalising those out of work, they simply encourage the unemployed to hurry up and get a job.
Trisha Jha is a Policy Analyst at The Centre for Independent Studies.
Home > Commentary > Opinion > Time-limits the alternative to waiting times for the dole
Time-limits the alternative to waiting times for the dole
This waiting period would be subject to a discount of one month for every full time equivalent year worked to a maximum of five months. There would also be a six month cycle-on cycle-off period over a year.
The Abbott government has thus far not had much luck convincing the crucial crossbench senators of the merits of this scheme, which has been characterised as 'punishing' the jobless for being out of work.
The policy is about reform rather than budget cuts, as it is only estimated to save $1.2 billion over four years. It is mainly about hassling the under-30s to find work. There is some evidence to suggest that periods of joblessness early in life can have a scarring effect on people's future work prospects.
About 60% of recipients of Youth Allowance Other (the payment for 15 to 21-year-olds) have been unemployed for twelve months or more, even though people in this age bracket are aided in job search by youth wage rates. (In general, though, minimum wage rates are a barrier to employment.)
But, there are other policies the government could consider to address youth joblessness.
A CIS report last year detailed how more and more people on unemployment benefits are not required to look for work. Current policy settings mean young people without a Year 12 or equivalent qualification are not required to look for work as a condition of receiving payment. Making job search mandatory as part of the activity test for Youth Allowance Other is a good idea and one that could receive crossbench support.
The Abbott government has also proposed new 'earn or learn' measures to push young people into education and training schemes in order to retain the dole. However, this merely kicks the can down the road and means taxpayers subsidise expensive training courses that fail to produce the desired outcome. Work by CIS Senior Fellow Peter Saunders has shown that education and training are not very effective at increasing job prospects, except for a select few.
Instead of 'more training', the government should consider implementing time limits on Youth Allowance and Newstart for under-30s as an alternative to a waiting period. This would still keep assistance available to those who simply need time to find work. But it would also be clear that this assistance is strictly short-term and intended to assist with a transition to work.
Long-term welfare reliance among youth is a serious problem. Given the cross-bench hostility to waiting times for the dole, alternatives are needed. Time-limits on the dole may be more politically palatable as well, because rather than penalising those out of work, they simply encourage the unemployed to hurry up and get a job.
Trisha Jha is a Policy Analyst at The Centre for Independent Studies.
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