Young Australians could be worse off than parents for first time, report warns

Updated

Young Australians are better educated, healthier and likely to live longer than their parents, but they are also facing a future of unstable employment, lower pay and growing debt.

A report today from the Foundation for Young Australians is warning that unless governments intervene now, living standards will deteriorate.

"We're facing the very real possibility that this generation will be the first to be worse off than their parents," said Jan Owen, the foundation's chief executive.

The report has drawn together a range of data to compare the livings standards of different generations.

Adjusted for inflation, people aged under 24 are earning about 7 per cent more than their parents did at the same age, but on average they are taking on three times as much debt.

"This generation's parents, in 1985, when many of them would have bought a house, had used about 27 per cent of their average income on their housing. This generation's expected to use 136 per cent," she said.

"So that's about six times what their parents paid, and that's why we can see that this is increasingly difficult for young people to enter the market.

"And, actually, not only access the great Australian dream, but also get hold of what in Australian terms to date has been the single greatest asset of every family."

Young people are also facing the prospect of less secure jobs during the decades its takes them to pay off their debts.

"Right now we've got almost 30 per cent of young Australians who are unemployed or under-employed," Ms Owen said.

"Young people who've got a university degree but aren't utilising it right now, that's about 25 per cent. They often leave university with, on average, $24,000 worth of debt right now when their parents had free or low-cost education, and it looks like that debt could rise to $40,000."

Tax burden, workplace changes

At the same time, young people will be forced to carry a greater tax burden as older Australians retire.

In 2012, there were five working Australians for every person aged over 65. By 2042, that number will halve.

"We need young people to be equipped with a very different set of skills coming out of school and higher education," argued Ms Owen.

"We describe them as enterprising skills, so a set of transferrable skills that you can take to your potentially 13 different jobs, which is what has been predicted that this generation of young people might have."

However, Ms Owen said it should not be up to young people alone to cope with the changing economy and workplace environment they are confronted with.

"Governments absolutely are front and centre, as is business, to a conversation about how we're going to do things differently," she said.

"The least that government should do is not disadvantage young people further.

"So higher rates of debt coming out of higher education, housing affordability - governments have the power to influence all of these areas in many different ways."

Topics: economic-trends, youth, work, australia

First posted