• Introduction and Overview
• Highlights
• Government Agencies
• Demographic and Other Social Trends
• Social Protection
• Child, Youth and Family Policy Regimes
• Maternity, Paternity, Parental, and Family Leaves
• Early Childhood Education and Care (ECEC)
• Family Allowances
• Child and Family Tax Benefits
• Child Support
• Other Child Conditioned Income Transfers
• Child and Adolescent Health
• School-Aged Children: Policies and Programs
• Housing
• Youth
• Reconciliation of Work and Family Life
• References
• Notes
• Contacts

(Last updated August 2005)

Introduction and Overview

Some observers emphasize Australia's membership in the Anglo-American group, its preference for market solutions, its residual approach to social provision, its heavy reliance on means-testing and-for most social services-on the voluntary sector. It is one of the relatively rich countries with a large child and family poverty population.

On the other hand, according to Eardley, an Australian expert, "the Australian social security system differs markedly from that in many other countries-apart from New Zealand-in that it has no social insurance features. Benefits are paid out of general taxation revenue and are flat rate, but are graduated according to income and assets…. However…it would be a mistake to consider that Australian arrangements are similar to the social assistance schemes common in many other countries. They are mainstream rather than residual payments" (Eardley, et. al, 1996).

Australia, which occupies an entire continent, is geographically the third largest OECD country after Canada and the U.S., but its population of 20 million (2003) is exceeded by many. Like Canada and Iceland its population density is very low.

Australia is a federation of six states and two territories. Responsibility for almost all income transfers resides in the Commonwealth government. The states offer social services on a limited basis and local government plays a small social service role, if any. It is the non-governmental (largely not-for-profit) sector, which is the important social service provider. This sector is heavily subsidized by grants from various government departments, mostly federal. Nonetheless, overall social spending is modest and this affects most sectors.

Among OECD's 30 countries, Australia now ranks thirteenth in GDP per capita (in purchasing power parities) in a recent analysis, showing steady improvement in relative position (OECD, 2004, p. 12-13). While not quite as low as Japan, but similar to the U.S., Australia as a government does not collect as large a portion of the GDP in revenue or expend as large a portion as do other industrialized OECD countries. The personal income tax and corporate income tax are (comparatively) important in Australia, but there are no social security contributions at all, which is something that can also be said only of New Zealand in the OECD world.

A recent review of Australian child policy raises the question of whether Australia is at the crossroads (Press & Hayes, 2000, p. 57):

Australia, like many other nations, is undergoing complex processes of change, in multiple areas of national life. These include demographic, social and economic changes. Demographically, the nation is experiencing a reduced birth rate (reflecting the lowest fertility rate in recorded history) at the same time as life expectancy is increasing substantially. The convergence of these two trends has resulted in a considerable change in the age distribution of the population, with the proportion of those aged over 65 increasing while the proportion aged under 15 is decreasing. Socially, the proportions of single-parent and couple-only families are increasing while the proportion of couple families with dependent children is decreasing, as is family size. Concurrent with these trends has been the steady increase in women's participation in the workforce. Economically, as in other Western nations, the distribution of the nation's wealth across social groups has been changing, with less wealth possessed by those in the lower social groups than those in the middle and upper income groups.

Related to these economic changes are shifts in the nature of Australia's economic base from its historical dependence on primary industry and natural resources, to a heavier dependence on service industries, including tourism and the knowledge, information and communication technology-based industries. Increasingly, Australian industries require greater flexibility from their workforces. As a result, the nature of work is changing, with decreasing unemployment and considerable variation in work arrangements for those who are employed. An increasing proportion of Australians work non-standard hours resulting in greater variation in the hours of work, the pattern of work across the year and, in some instances, the places of work. Increased casualisation of the workforce is a prominent feature of Australian industry with clear implications for ECEC. As a result, the needs of families may conflict with employer demands and family-friendly work practices are still not extensively available.

These trends highlight some salient tensions concerning Australian images of children and their place in the nation. Unlike some other nations, it is difficult to discern a consensus view of children in Australia. Historically, social policy perspectives have swung between a focus on children in their own right, and on children viewed in the wider context of their families. In recent decades, the focus on families has emphasized the need to support the workforce participation of parents or to address the needs of children labeled as vulnerable. The tension between these broad views, and variations on them, has been a feature of Australian policy and practice. In part, this tension is reflected in the divide between care and education.

In the current era, there is a view that children are a diminishing resource to be highly valued. From this perspective, investment in the nation's children is a key priority. The image of children as an "investment" has been evident throughout the last century. In the 1930s Australia, along with New Zealand, led the world in addressing the problem of infant mortality. Across the 20th Century, successive Commonwealth, State and Territory Governments have placed considerable priority on public expenditure on education as a key underpinning of national development. In the latter part of the last century, however, issues related to the aging of the population tended to be a dominant policy focus. In addition, for the growing percentage of couples who choose to remain childless, investment in children may not be seen as a worthwhile national priority. There is some evidence, however, that children are again becoming the focus of national attention as reflected in recent government policy initiatives.

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Highlights

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Government Agencies

Most social security (income transfer) payments are made by the Department of Family and Community Services. There are administrative sub-units for specific programs. The Department of Education, Science and Training, and the Department of Workplace Relations make a wide range of income-related payments to youth. . In general, education (and ECEC) is a state function and income transfers a Commonwealth function. Many of the 750 local governments are also involved in provision of ECEC. At the end of 2004, a new Department of Human Services was established, including child support policy.

Demographic and Other Social Trends

Australia's under-15 (20 percent) and over-65 (13 percent) population proportions in 2003 are both close to the OECD average and the prospects are for an aging population, like that of Europe, moderated by the now accelerated immigration. The culture still reflects its recent "young population" experience. The country has also experienced a large fertility decline since the 1970s, is now (2001) on a level with several of the higher-ranking major European countries in total fertility (1.8), but below the U.S., which is at the critical replacement rate (2.1). However, having ended its "white Australia policy" in the 1960s and its immigration constraints on all but Europeans, Australia now has a significant flow of young Asian immigrants and immigrants account for half of births. Its population includes a small percentage of Aborigines, and they are socially and economically disadvantaged. The country is increasingly multicultural.

Australia has a significant youth population, the 15-24s (2.6 million) constituting 14 percent of the population in 2001. 59 percent were living with parents and 53 percent were in full-time or part-time study. Australia's male and female under-25s unemployment rates were below rates for some of the leading industrialized OECD countries, but not U.S. and U.K.

Australia shares high divorce and separation trends with Europe and the U.S. and saw an increase in lone mothers with dependent children from 13 to 22 percent of families between 1988 and 1999. Marriages tend to be late, as is child bearing. Half of all couples cohabit before marriage.

Of children in Australia (2004), 21 percent were in lone-parent families, placing Australia with Canada, the Nordic countries, the U.K., and the U.S. and well above other European and other OECD members (UNICEF, 2000, Figure 3).

Although Australia has the lowest rate of lone-parent employment among the English-speaking countries; it also has the lowest child poverty rates in the group-the result of relatively generous family benefits and good child-support collections. Moreover, employment of single mothers is increasing. Full-time work by lone mothers has been decreasing and the part-time component growing (OECD, 2003). About seventy percent of women are in some kind of paid work, part-time or full-time, more like U.K. than the Nordic countries, but less part-time than Netherlands and Switzerland. In 2000, nearly 45 percent of mothers of children under age 3 and 63.5 percent of children ages 3-6 had mothers in the labor force, the majority part-time. Those mothers with partners were more likely to be at work than lone parents. Only 15 percent of lone mothers with children under 3 were in full-time work. A significant portion of the population does not favor work for mothers of young children. Among all family types, mothers tend to work more as children approach age 2. However, despite recent official interest in encouraging work force training or entry for such mothers, public aid programs only counsel about such options. Only when the youngest child is 12 years of age is there some "mild" pressure (OECD, 2000, Sections 1,2,6; OECD, 2002a, Table 2.9 & p. 162).

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Social Protection

Historically, Australia developed one on the world's first (1908) social security systems but, as noted above, it departs substantially from the major world models in its stress on means-or income-tested benefits.

As part of a more general tax reform, Australia recently restructured its family payment system. The major goals of the reform are to simplify the system of payments, to increase the family benefits, and to reduce disincentives to work. Until recently, Australia has operated seven different schemes to provide benefits to parents, based on the number of dependent children. All current allowances are means tested and have sudden death income tests, so that there is a 100 percent withdrawal of benefits as earned income increases beyond a threshold. From July 2000, the number of types of payments for families was reduced from seven to two: a Family Tax Benefit (including extra help for single income families) and a Child Care Benefit. Payments are made through a new single and specialized Family Assistance Office, rather than being split between the two departments responsible for social security payments and taxation. The 100 percent withdrawal rate for beneficiaries earning income above the threshold was replaced with a 30 percent taper rate, thus increasing the incentives for low to middle income families to escape poverty through earning additional income. The yearly benefit per child, in particular for single income families, and the maximum assistance for childcare for lower income families, was increased. (Bertelsmann, Issue 8, 2003. See website.) Despite the income-tested nature of its benefits, almost 80-85% of families receive at least some benefit.

Long a prosperous country on the basis of mineral and economic wealth, Australia experienced the economic pressures of the industrial world in the 1980s and 1990s. Nonetheless, a labor-political accord of the 1980s has (in a type of semi-corporatism, perhaps) protected wage standards and social policies to a degree even as market-pressures did affect employment and generally high living standards. While the OECD data show some relative increases, Australia retains its character as a relatively low taxer (but with a progressive tax system), a low government spender, and a low social protection spender-all proportionately-while benefit and program specifics are sufficient but not among the most-generous. The government issues an annual Social Justice Statement that stresses equity, equality, access, and participation. A key commitment is to an adequate level of income for those unable to provide for themselves. However, in a 15-country analysis in the early 1990s of economic assistance for children (there called "child benefits") Bradshaw and his collaborators ranked Australia 8.5 among the 15 in the generosity of the package, exceeded by Luxembourg, France, Germany, Belgium, all the Nordic countries, and by the U.K. On the other hand Australia led the U.S., Netherlands, Italy and all of Europe's poorest countries. In a 2002 replication, Bradshaw rated Australia as 3rd or 5th most generous of 22 countries, depending on the measure (Bradshaw, et al, 1993, Table 9.14; Bradshaw, 2002, pp. 168-169).

Offering further detail Gornick and Meyers found that in the mid-1990s Australia's total spending, as a share of GDP (26 percent), was just above a multi-country average of 24 percent and equal to the EU average. Similarly the per capita social spending in U.S. dollars, purchasing power parities, of $4640 was just above the cross-country average of $4293 and the EU $4505. Within these totals, Australia's "family policy" expenditures of 7.3 percent of all its social spending compares with the cross-country rate of 6.5 percent for the EU 6. However, maternity (parental leave) spending as a share of family policy spending of 9.2 percent was low, compared to a cross-country 20.2 percent or a cross-Europe average of 14.2. A new OECD analysis for 13 countries (1999 data), which considers net public social expenditures, with attention to the tax system and private sector, places Australia (17.9 percent) ahead of Korea, Ireland, and slightly ahead of the U.S. However, the range for the higher-ranked countries is only 18.1 to 29.7 percent. An earlier experimental analysis for 16 countries (1997), which treats private expenditures somewhat differently, gives similar results. However, when Canada and Ireland are included, they rank behind Australia, but the U.S. is a bit ahead (Meyers & Gornick, 2001, Tables 1 & 2; Adema, 2001, Table A2.1; OECD, 2002c, Table 8).

The most recently reported poverty analysis shows Australia, with the sixth highest per capita GDP among 19 industrialized countries as having the 8th highest (or 12th lowest) poverty rate using the U.S. absolute poverty measure. (The U.S. had the 9th highest rate.) Using the widely preferred relative measure (poverty as less than half the median income) Australia had the 9th highest rate among 23 countries (the 15th lowest), while the U.S. had the second highest rate. The poverty rate for children in Australia's lone parent families was 35.6 percent (the U.S. led at 55.4 percent), but only 8.8 percent, in other families (UNICEF, 2000, Figures 1, 2, & 3). Australia is among those countries (as is the U.S.) whose transfer payments are relatively ineffective in reducing the proportion of those who are poor.

Poverty declined in the 1980s but increased in the early 1990s. Poverty is not a featured issue on the Australian policy agenda. The focus is more on what is poverty and how it can be measured than what should or could be done to reduce or eliminate poverty. The issue is not the causes or consequences of poverty but how to measure it. Regardless of the measure used, child poverty increased in the 1990s. The numbers of working poor rose and policy clearly had an impact. Thus far, unfortunately, the family tax benefit has failed to stem the rise in child poverty (Adelman, 2003). In contrast, in the years from 1999 to 2001, child poverty rates declined in six of the 23 OECD countries, including Australia, ranking 18th, at 14.7 percent (using the relative definition of poverty at below 50 percent of median income) (UNICEF, 2005).

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Child, Youth and Family Policy Regimes

Maternity, Paternity, Parental, and Family Leaves

Since 1994, all employees with 12 months of continuous service have been entitled to 52 weeks of unpaid leave to care for a newborn or adopted child. Parents may share this leave. Commonwealth employees are entitled to 12 weeks of paid maternity leave and state-government employees to 6-12 weeks. Paid maternity leaves are available in some parts of the private sector (23 percent of employees), as are paid paternity leaves (13 percent coverage). But in the industrial world only Australia and the United States lack national, paid, statutory leave. The current estimate (2004) is that about 39 percent of female employees in Australia can take an average of 7 weeks paid maternity leave, up from 28 weeks in 1997 (Australia Parliament E-brief, August 11, 2004).

Carers' leaves or family leave enables employees to take time off to care for an immediate household member who is sick. The employee may take a maximum of 5 days using his/her own sickness or bereavement leave (or there may be other arrangements to make up the days).

Since 1996 there also has been a one-time lump-sum birth payment paid, linked to child immunizations. It is income-and asset-tested and amounted to more than A$1,000 in 2003.

A proposed maternity benefit reform in Australia aims at providing benefits to all working mothers, streamlining a number of existing benefits and making the payments for mothers more transparent. Currently, as indicated above, Australia is one of only two OECD countries that does not have a system of paid maternity leave in the traditional sense. Australia does, however, have a variety of family-related benefits, some of which include payments similar to a maternity benefit. There is the Baby Bonus, Family Tax Benefit A, Family Tax Benefit B, the Maternity Allowance, the Parenting Payment and child care support, all provided by the federal government. In addition, employers are required to provide unpaid parental leave. (The tax benefits are discussed subsequently.)

What follows draws from Bertelsmann, Issue 6 and 8:

The Baby Bonus provides a cash benefit upon the birth of the first child and is based on the prior income of the mother. It is payable for up to five years (Bertelsmann, Issue 6, p. 35, 2002). The annual payments range between a minimum of € 280 and a maximum of € 1,400, depending on prior earnings of the mother.

The Maternity Allowance is to help families with the costs associated with the birth of a new baby. It is paid as a non-taxable lump-sum at the birth of the child and is equivalent to about one week's wages.

The purpose of the Parenting Payment is to assist people with children, particularly low-income families, by providing an independent source of income. It is subject to an income and assets test and is paid to the primary care-giver of a dependent child. It is the main form of support for single parents. Single parents may receive up to € 120 per week if they have no other earnings, while mothers living with a partner may receive up to € 95 per week.

Permanent full-time and part-time employees who have worked for their employer for at least 12 continuous months have a minimum entitlement to 52 weeks of unpaid parental leave following the birth or adoption of a child.

The proposed reform would streamline these benefits and introduce greater consistency. Mothers who leave work to stay at home with their newborn children would receive 14 weeks at the rate of the federal minimum wage (currently € 243 per week) or the woman's previous weekly earnings from her last job, whichever is less. To be eligible the woman must have been gainfully employed (including casual employment, contract work and self-employment) for 40 of the 52 weeks before the birth. Work may have been with any number of employers and/or in any number of positions. The payment will not be means-tested.

Women who take maternity leave will not be eligible for the Maternity Allowance, the first 14 weeks of Family Tax Benefit Part A and Family Tax Benefit Part B, and the first 12 months of payments from the Baby Bonus. Should the proposals be accepted, the reform would provide about € 112 million of extra benefits (net amount after allowing for the loss of other benefits) for working mothers following the birth of their children.

The proposal has been supported by a broad spectrum of commentators, feminists, government officials, parliamentarians and academics. However, conservatives who strongly support a domestic role for women have pointed out that the benefit does nothing for their constituency and that the vast majority of women want to remain at home while their children are infants. They also note that the reforms are unlikely to have much of an effect on birth rates. Experts support an explicit benefit for working mothers but suspect that what is required is a broader consideration of all family payments. As has been pointed out, the proposed payment would lead to a sharper contrast with mothers who do not work before the birth of their children. For these women, there are other existing benefits, but they are means-tested. As with the Baby Bonus, unless the total range of family-related payments is considered, there is a danger that the introduction of another new payment will increase complexity.

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Early Childhood Education and Care (ECEC)

The ECEC picture is one of diversity and complexity, given both the number and mix of jurisdictions and variations in policy approaches and delivery, the absence of a national ECEC framework, and the limited roles of municipalities. To date, ECEC has primarily been a means of: (a) enabling parents to participate in the paid workforce; (b) providing respite for parents and children; (c) supporting families at risk. Most recently, as the Commonwealth develops policies and services, there has been attention to the role of child care in providing opportunities for child development, learning, socialization (OECD, 2000).

Australia was part of an OECD review of ECEC in twelve countries (1998-2002). Consult the full Australian report on line at: http://www1.oecd.org/e1s/pdfs/EDSECECDOCA017.pdf.

Australia's assistance for childcare has been limited in the past and the private sector is very important. Major efforts at conceptualization and improvement have been launched in recent years. A recent OECD review reported 31 percent of the under-3s were in care (mostly private) in 2002. In contrast, Meyers-Gornick had reported 5 percent coverage in the late 90s. Rural and remote areas are especially likely to have shortages. The recent review also reported coverage of 66 percent of the 3-5s in preschool (Meyers & Gornick, 2001, Table V; OECD, 2002a, p. 85-88 & Table 3.1). For pre-schoolers, informal arrangements, mostly with relatives, is the most common form of care (Bradshaw et al., 1993). Where compulsory schooling begins at 6, as it does in most of the country, 74 percent of the 5s are in preschool or kindergarten.

Pre-schools and kindergartens typically offer 3-hour programs. Most "long-day" care is in family day care and centers, largely not for profit. The latter involve some Commonwealth operating subsidies in addition to the fee-relief for parents as specified below. Most of those under-3s not in private arrangements or with relatives are in subsidized centers, which offer 9-hour programs, 5 days each week.

For working parents, the main public help comes in the form of income-related (not means-tested) fee relief:

(a) Child care assistance, for families with low-to middle-level incomes whose children use approved childcare services. There is a specified hourly rate ceiling for pre-school-age and school-age programs.

(b) Child care rebate for all families with children in registered care. The value per week depends on the number of children in a family in care. The rebate may cover up to 30 percent of a family's weekly costs. If both parents in a family work, or are in training, or are attending school, the family is eligible for both of these reliefs (Eardley et al., 1996).

Subsidies to Parents. A new system, the Child Care Benefit (CCB), came into effect on 1 July 2000. This benefit combined both Childcare Assistance (CA) and the Rebate into a single, more generous, payment. It is payable to families using approved services or registered informal carers, with families using approved services receiving a greater amount of assistance than those using informal care. The amount of CCB a family is entitled to depends on income and the number of children in care. The maximum amount of benefit payable for a family with one child in 50 hours of care per week is $122.

It is anticipated that Child Care Benefit will result in the cost of child care decreasing across most income ranges and circumstances. For example, the proportion of out-of-pocket expenses to disposable income for a family with an annual income of $25,000 and two children in part-time long day care has increased from 10% in 1996 to 12% in 1999. It is projected that this figure will drop to approximately 9% under Child Care Benefit. Increases in assistance under the new payment are expected to improve affordability of child care for most families. All rates and income limits for Child Care Benefits are indexed in July each year.

Some direct funding from the Commonwealth to early childhood services provides for the establishment of non-profit new family day care and outside school hours care services in the form of equipment, establishment and set-up grants. From 2001, private operators are eligible to apply for this funding.

In 2004, the average long day care center fee was $208 a week (and $211 in community long day (50 hours)). In family day care it was $185, also for 50 hours a week. The average fee per session was $6.68 for before school and $10.28 for after school. About 60 percent of center staff has formal qualifications (a B.A. degree with special child care training).

Pre-school trends. Commonwealth interest in pre-schools is not one of funding or provision, but is associated more with its broad educational and economic goals for schooling. The majority of parents pay some fee for pre-schools, although it is not compulsory. South Wales and Queensland fees vary depending upon the provider of the service.

The ABS statistical survey Child Care Australia released in June 2000 coincided with the OECD review visit, and includes the only data on enrolment trends in pre-schools. For the first time long day care passed pre-schools as the most used form of formal care outside of the home in 1999. Over the decade, there was a decline in the pre-school share of formal care from just over 50% in 1990 to 31.5% in 1999. This reflected the growth in the availability of long day care and the limited orientation of pre-schools to the needs of working parents. (OECD, Early Childhood Education and Care in Australia, Country Note, 2001)

Several child care initiatives aimed at increasing the supply of child care places were announced in December 2003, including outside school hours programs and family day care places (Australian 2004 Census of Child Care Places, 2005).

One of the concluding comments regarding ECEC in the OECD Background Report (2001) is: "The Australian system of ECEC is complex because of the range of service provision, the different roles of each tier of government, and the diverse policy frameworks in which ECEC is located. ECEC in Australia is based in a number of different policy areas, including educational outcomes, women's workforce participation, support for families, and support for children's development. Divided government responsibilities for ECEC contribute to this complexity and fragmentation. Although such factors give rise to a lack of uniformity they have also produced a number of innovative and regionally responsive initiatives. An ongoing tension is the desire, on the one hand, for increased national uniformity and, on the other hand, for enhanced local responsiveness and ownership." (OECD, 2000) Variations in ECEC policy and services also arise from the historical dichotomy between care and education. Australia was a participant in the OECD thematic service of ECEC programs.

See also the OECD Background and Country Reports for Australia on Early Childhood Education and Care in Australia (2001).