‘Aussie youth face distinct challenges’: Deloitte urges policy reform for emerging generations

According to a recent report from Deloitte, the younger generation was originally expected to benefit from greater opportunities than the previous one. However, intergenerational inequity now exists and is posing significant risks.

The report, Australia’s Youth Agenda: Economic and Policy Imperatives, analysed economic and demographic data from various sources to highlight “the mounting economic and social challenges facing younger Australians, while making the case for embedding a youth lens in policymaking”.

According to the big four firm, the report was developed by a team of younger economists and “kick-started” an ongoing series that would aim to cover key issues faced by Australia’s youth.

Rhiannon Yetsenga, Deloitte Access Economics associate director and report lead author, said the Youth Agenda series would work to “delve deeper and provide fresh, data-driven insights on major topics from a youth perspective”.

“Today’s young people have come of age amid intensifying globalisation, a climate emergency, the rise of social media and AI, the COVID-19 pandemic, geopolitical turbulence, and a housing market beyond their grasp, they are more educated than any generation before them, yet face less secure work and delayed financial independence,” she said.

“Every generation grapples with unique challenges, and we would not argue that older Australians had it easy, because they didn’t. Our view is that young people are facing distinct challenges that are not being sufficiently addressed in the national conversation or policymaking process.”

Based on what has happened in the modern world, it was revealed that 42 per cent of Australians aged 18 to 24 felt as if they were missing out on their youth, and 41 per cent worried they wouldn’t be able to live a happy and healthy life as they grew older.

From this, Deloitte said it was important to understand young Australians’ distinct challenges and that their perspectives should be embedded into policymaking as a national economic imperative, as it could be key to “opening the door to a more inclusive society”.

From their research, the Deloitte economists found the top challenges that faced young Australians today included housing affordability, the pressure to have children young, lagging real wage growth, workplace flexibility, climate concerns, loneliness and different views on gender diverge.

According to the firm, economic settings continued to favour older Australians, as the average household aged 65-74 now had five times as much wealth as the average household aged 19-34, resulting in 40 per cent of young adults expecting to rely on family assistance to buy a home.

In addition to this, as the cost of living continues to skyrocket, young Australians aged 25 to 29 cut back on their overall spending more than any other age group in 2023–24.

This had the impact of reducing overall spending by 3.5 per cent, while Australians aged 60 and over increased spending above inflation.

Reformed housing tax settings, attracting and retaining skilled and early career migrants, flexible education and work pathways, investment in the growing sector and an embedded youth lens in the budget process were among the recommendations included within the report to help combat the escalating challenge faced by younger Australians.

Yetsenga said policymakers were aware of these challenges, and action needed to be taken to help the nation's current young and upcoming generations.

“Policymakers are aware of these issues but the continuous emphasis on demand-side subsidies without adequate supply-side policy only fuels prices, leaving young people to chase the market whilst combating rising rents,” she said.

“Real affordability demands confronting the politically harder task of broader tax reform – whether on housing tax or broader wealth settings – that continue to lock young Australians out.”