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AUSTRALIA: Children, Youth Feel the Heat of the Financial Crisis

Neena Bhandari

SYDNEY, Dec 2 2009 (IPS) - Once a week lunch order from the school canteen was something Emily and Damien’s children looked forward to, but since the global financial crisis began last year, little treats and outings are an absolute ‘No’.

Salvation Army's Paul Moulds: 'Young people are back into very difficult circumstances.' Credit: Paul Moulds

Salvation Army's Paul Moulds: 'Young people are back into very difficult circumstances.' Credit: Paul Moulds

“Lunch order for our four kids aged 14, 13, 9 and 8 costs 50 [Australian] dollars (46 U.S. dollars), and at a time when our weekly shopping bills have gone up by 150 [Australian] dollars (139 U.S. dollars), it is a luxury we can’t afford,” says Emily, who is blind in one eye and has half vision in the other. She has been compelled to take up a job while her partner, Damien, a truck driver, has to work seven days a week to make both ends meet.

“Before the economic crisis, we were doing much better on a single income, but now even with two salaries, we are struggling and the children have had to forego getting new clothes, school uniforms, going to the zoo or museum. It is becoming extremely difficult to cope financially and physically,” says Emily, who works as a youth worker for a public community organisation and whose name and Damien’s have been changed to protect their identities.

In the 2009 Social Research Survey of Households with Children, commissioned by Family Relationship Services Australia, 54 percent of respondents report experiencing a current impact of the global economic crisis on the ability of families to provide opportunities for their children.

Emily’s family is one of many struggling to buy Christmas presents this year. “The next few weeks are going to be very difficult as we try and save every cent to buy something for the kids for Christmas,” says Emily, who has been provided accommodation and support by St Vincent de Paul Society, a charity.

The economic downturn has seen increased numbers of Australian families without paid work, rising from 11.8 percent to 13.9 percent of all families with children from June 2008 to 2009.

Almost one in 10 homeless Australians are aged under 12 and more than one in three are young people aged 12 to 24. “The biggest impact of the financial crisis has been the relapse of young people back into very difficult circumstances,” Paul Moulds, director of The Salvation Army’s Oasis Youth Support Network in Sydney, tells IPS.

The Network, which works with homeless youth between 16 and 24 years, of whom 50 to 60 percent are between 16 and 18, has seen an increase in the number of homeless teenagers in the past year.

Moulds says a number of young people, who had been in the centre in the past and “had resolved their problems and moved forward with their lives, got jobs (and) housing,” have lost their jobs since the economic downturn.

“And as their housing was based on their income and most people we work with didn’t have strong family support, they have faced eviction and are once again homeless,”adds Moulds.

Most young people are often employed in manufacturing, services, tourism— and when these industries contracted, young people who are least qualified and experienced have been the first to go. “We have found offering rental payment subsidies for homeless youth is a more effective form of intervention than getting them re-employed in the current scenario,”Moulds says.

Australian government statistics show that children and youth in homeless families are at greater risk of experiencing ongoing homelessness and healthcare issues over their lifetime.

A study by The Foundation for Young Australians has revealed a sharp rise in the rate of youth “disengagement from work and study.” The report, ‘2009 How Young People Are Faring’, shows that the proportion of teenagers not learning or earning full-time has gone up from 13.4 percent a year ago to 16.4 percent, the highest level since the recession of the early 1990s.

Based on the report 17.6 percent of 17-year-olds are “marginalised to part- time work (8.3 percent), unemployment (5.2 percent) or withdrawal from the labour market (4.1 percent).” The corresponding figures for 18- and 19- year-olds are 27.4 percent and 26.9 percent, respectively. The report further found the rate of unemployment among teenagers who were not in full-time education has risen from 12.2 percent in 2008 to 18.5 percent in 2009; one of the largest annual increases for teenagers over the past two decades; and the last 12 months have seen reduced rates of entry into full-time work for school leavers.

“Many youth are delaying or avoiding any augmentation of human capital because of financial constraints. While there is an increase in university enrollments, young people are taking short-term, job-specific courses instead of longer-duration degree courses. The burden on teenagers has increased with parents losing jobs; many are having to look after their aged parents and search for jobs rather than study to tide over this period of poor employment,” Raghbendra Jha, professor of economics and executive director of Australia South Asia Research Centre at the Australian National University in Canberra, tells IPS.

An overview by the Organisation for Economic Co-operation and Development (OECD) of the global economy predicts Australia’s unemployment rate will peak at 6.3 percent. It expects the country’s economy to grow by 0.8 percent this year. However, it says leaving the stimulus measures in place for too long would be harmful and has called on the world’s major economies to prepare exit strategies.

Jha concedes that while the government’s stimulus packages have helped, they are only temporary support. “As the government slides into debt, it will have to reduce child entitlements and benefits, which would adversely impact on youth and children in the years to come,” he says.

Based on data from the Australian Department of Education, Employment and Workplace Relations, between October 2008 and October 2009, total newstart and youth allowance recipients increased 32.0 percent from 493,773 to 651,836. The number of youth allowance job seekers increased 21.7 percent from 47,511 to 57,800.

This is when Australia is the only developed economy to have side-stepped a recession in the wake of the global financial crisis and the Reserve Bank of Australia is the only central bank in the Group of 20 nations to be raising interest rates.

An Australian Council of Social Service (ACOSS) report points out that low- paid Australian families do not receive adequate financial support to meet the costs of raising their children. Sole parents, families without paid work and those raising teenagers struggle to pay for groceries, clothes, school books and face greater levels of poverty and disadvantage.

Family payments cover less than half the cost of raising teenagers aged 16 and older. Over half of sole parents on income support payments could not pay utility bills in the last 12 months, and a quarter could not afford up-to- date school books or clothes. Almost 10 percent of Australian working-age households with children do not have employed parents, double the average for OECD countries.

“The deepening global financial crisis has multiple implications for children and young people. Even those from affluent backgrounds who may not experience serious material hardship face a sudden loss of social status, including perhaps a change of school, which can also create stress,” says Richard Eckersley, a member of the Australian Research Alliance for Children and Youth, a national non-profit organisation working to create better futures for Australia’s children and young people, told IPS.

“All these things put strains on marriages and families, increasing the risk of conflict and breakdown,” he says.

At a time when Australia has a relatively high rate of child poverty at 11 percent, job losses, housing foreclosures and failed businesses are expected to push more children and youth into poverty.

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