This is how Newstart is failing young Australians

There are too many jobs and our economy is growing. So why are 250,000 young people out of work and on welfare payments?

There’s an old stereotype that people on welfare payments are bludging and not doing anything to find a job, but research shows the system is making it impossible to get people off welfare.

Parliamentary inquiries, social advocates, and unemployed people warn this system is failing young people, and pushing them further into poverty.

Plus, there are widespread concerns welfare payments aren’t enough for basic expenses like food and rent.

Hack has spoken to dozens of people who are either living without a job or trying to help those who are unemployed. This is what they say must change.

How does the welfare system work?

Newstart is the main income support for unemployed people looking for work.

A single person gets less than $40 a day on Newstart, or $275 a week.

If you’re under 21 and studying, you can apply for youth allowance instead which is a slightly lower rate.

The rate of Newstart hasn’t been raised in real terms since 1996 and several organisations and politicians from both sides are calling for an increase.

Amanda and her son

Amanda and her son triple j Hack: Avani Dias

Amanda Jarret lives in Coffs Harbour on the mid-North Coast, which has one of the highest youth unemployment rates in the country. Almost a quarter of young people (aged 15 to 24) there are looking for work.

She’s been on Newstart for the past three years after losing her job in the aged care sector.

“Newstart doesn’t pay my rent… and I’m not a person who just wants to sit back and doesn’t want to work. I want to work, and I’m trying everything,” she told Hack.

“I do have certificates in business and community services and stuff like that but I keep getting knocked back from jobs I don’t know why.”

Here are the worst 20 places for youth unemployment, according to ABS data that has been analysed by the Brotherhood of St Laurence.

In order to get Newstart, recipients need to show they’re applying for jobs or doing training courses. They do that through private employment service providers which run programs in how to get employed and find work.

The providers are funded by the Federal Government and the system of job-hunting for welfare benefits is called Jobactive.

It’s run by the Department for Jobs and Small Business, which told Hack 59 per cent of people in the program were employed or in education three months after participating in it. But it’s unclear how much of that is full time work which would keep people off Centrelink for a long time.

Countless qualifications but no job prospects

A big criticism of the Jobactive model is that it does not get unemployed people into the type of work which will keep them off Centrelink permanently.

The programs, run by the private service providers, have different goals, from getting a young person into a job to enrolling them in a Certificate III training course.

Several young people Hack has spoken to have said they’ve done several courses which are irrelevant to the jobs they’re going for in the region they live in.

Joanna Kearney has been unemployed for nearly ten years. She has completed at least four TAFE certificates because this was required by the employment service providers in order to get welfare payments.

She said none of them have helped her get a job.


Joanna Kearney

“There’s a lot of push to keep doing the courses and once you’ve done a few, [employment service providers] push you to do higher level ones you may not be prepared for,” she told Hack.

“It feels like a hamster wheel running around to meet those [welfare] requirements.

“It’s not just fill out a form once a month and you get free money…you have appointments, you have work for the dole, you have job search.”

Amanda – who is also long-term unemployed – said despite her work experience and also having several TAFE certificates, she has the same qualifications as other unemployed people who go for the same jobs.

“I have certificates in business and community services and stuff like that but I keep getting knocked back,” she said.

“It’s just deflating… and when you’re constantly giving something your all, you’re getting knocked back, kicked in the teeth 24/7, you fall off the rails.”

Too many jobs but not enough job applications

report by the Regional Institute of Australia has found country areas are in the midst of a workforce crisis with too many job vacancies.

According to the report, there are 40,000 job vacancies across regional Australia and that number is growing. The biggest gap is in the healthcare and social assistance sector, which includes aged care.

So why aren’t the thousands of young unemployed people getting work if there are so many available jobs?

The overwhelming consensus is employment service providers aren’t training unemployed people in industries where there are vacancies, according to several employers Hack has spoken to on the Mid North Coast.

Karen-Louise Angus from Nambucca Valley Care is responsible for recruiting more than 310 aged care staff in the area.

She says she recruits for entry-level jobs which don’t require any qualifications, and this is reflected in the number of young workers on her staff: 20 per cent are under 25.

But she said despite being one of the few local employers willing to hire young people, she’s not getting as many job applications as she should.

Aged care staff

Aged care staff from Nambucca Valley Care (Brittany, Cody, Karen-Louise)

“The big focus at the moment is on the level of youth unemployment, and it’s high… but we’re not seeing that reflected in our attendance at our information sessions or in applications for work,” she said.

“We try and engage with the job service agencies so they send people to our programs but we have to push and almost draw teeth from them to get people to attend.”

Job providers not providing the right training

After trying and failing to get Centrelink’s employment service providers to train people in the right areas, Nambucca Valley Care decided to start its own independent training organisation instead to recruit young unemployed people.

Stephen Harris from Express Coach Builders in Macksville, south of Coffs Harbour, is another employer who wants to hire more young people. But he said people going through the welfare job programs don’t have the right qualifications.

“We find that people are being trained in the wrong courses for our business, they’re being trained in completely irrelevant courses from our point of view,” he said.

“We’d prefer to have people who are trained in welding or fabrication, which are short courses and they could be offered [by providers] and then they could join us as trades assistants.”

Both Stephen and Karen Louise said the government’s job providers often don’t come to employers to ask what training they should put unemployed young people in.

A recent Senate inquiry found people, on average, spend five years on Centrelink working with employment service providers.

Barriers to employment

In March, the Federal Government announced a $1.3 billion overhaul of the Jobactive system. It focuses on a new digital “self service” portal for job applications.

Job seekers will also be freed of demands to apply for 20 positions a month.

But with no commitment from the Coalition or Labor to raise Newstart or overhaul the business model of the Jobactive system, young people who spoke to Hack warned they’ll continue to be pushed into poverty.

They said another barrier is the absence of affordable and regular public transport to get to work, job interviews, and training workshops.

On top of this, many of the young people who shared their stories were the fourth unemployed generation in their families.

Joanna, whose parents were unemployed, said when your friends, family, and everyone else around you doesn’t have a job, it’s difficult to get out of the cycle.

“Not everyone gets that exposure, it’s not necessarily bad parenting or anything, if you haven’t got a job history you can’t tell your children about your job history.”

Leave a Reply