We can't afford to have 260,000 youth unemployed: former Treasury head Ken Henry

Australia cannot afford the level of youth unemployment that has risen to 260,000 and is eroding many young people's self-respect and potential, says former Treasury Secretary Dr Ken Henry.

Dr Henry, who was Secretary of the Department of Treasury from 2001 to 2011, made these remarks in his foreword to the Brotherhood of St Laurence's April Youth Employment Monitor as part of the national welfare group's My Chance, Our Future campaign to tackle youth unemployment.

Dr Henry said that In the 14 years leading up to the global financial crisis in 2008, youth unemployment had been trending down – from more than 380,000 (seasonally adjusted) in October 1992 to less than 160,000 in August 2008.

"Today, the number of those aged 15 to 24 who are unemployed has climbed back to around 260,000. Strikingly, this is more than the total number of people, of all ages, who are employed in the state of Tasmania," he writes. "Australia simply cannot afford this level of youth unemployment."

"Young people who are not in the education system and who are denied work are deprived of the freedom to lead a life they would choose," he writes. "They are being denied the capability to participate fully in the activities of their community."

"In many cases, young people’s self-respect and dignity is eroded. This is true for all people who are unemployed, of course. But for those who are young, unemployment can have a permanent impact by impeding the development of their talents and potential. These are essential ingredients for Australia’s youth to be able to make good choices throughout life.

"Dr Henry also highlighted the impact of unemployment on Australia's standard of living and government services.He said that the combination of the fall in average working hours as part-time employment increases, the slowdown in growth in labour productivity and the reduction in the proportion of people of working age as the population ages, means that initiatives to cut unemployment must do the heavy lifting in sustaining growth in GDP (gross domestic product) per capita.

GDP per capita is a key measure of living standards, and also a key determinant in government revenue that funds education, pensions, health and other essentials.More details on the Brotherhood's Youth Employment Campaign