A million face cash squeeze
Under changes announced in the first budget of John Howard's conservative government, a new youth allowance will combine the unemployment benefits system and student grants .
In its efforts to slash more than A$7 billion (Pounds 3.7 billion) from its spending over the next two years, the government will make it much harder for young people from well-to-do families to obtain grants, and will restrict the amount that others can claim by making university students dependent on their parents for an extra three years.
The government also intends to make young unemployed Australians work on environmental projects, run by a new "Green corps".
The youth allowance will affect more than 600,000 16 to 20-year-olds, as well as full-time students aged up to 25. The government says the standard allowance will simplify the present system with its 13 different allowances and encourage more young people to continue their education.
For the first time, unemployment benefits will be means tested in order to reduce government spending in cases where parents are able to support their children.
But the changes also mean that university students who are at present regarded as independent when they turn 22 - and are therefore eligible for much higher allowances - will now have to wait until they reach 25.
The National Union of Students is calling for a day of action, with rallies and street marches to protest against the government's budget decisions. It says that only politicians could think that 25-year-olds are dependent on their parents.