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(last updated October2001)
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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"(1).
Australia, which occupies an entire continent, is geographically
the second largest OECD country after the U.S., but its population
of 19 million (late 1990s) 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
non-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 16 "rich" industrial states (Canada and U.S. included)
Australia now ranks sixth in GDP per capita (in purchasing
power parities) in a recent analysis (2),
showing steady improvement in relative position. While not
quite as low as the U.S. and Japan, Australia as a government
does not collect as large a portion of the GDP in revenue
or expend as large a portion as do most European Union countries.
The personal income tax and corporate income tax are (comparatively)
important in Australia, but there are no social security contributions
at all.
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Highlights
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country highlights in pdf format.
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Government Agencies
Most social security (income transfer) payments are made
by the Department of Social Security. The Department of Veteran
Affairs handles payments to veterans. Major responsibilities
reside in the Department of Family and Community Services.
The Department of Education makes a wide range of income-related
payments to secondary school and tertiary students. The Commonwealth
Youth Bureau has the lead on prevention activities and services.
In general, education (and ECEC) is a state function and income
transfers a Commonwealth function. May of the 750 local governments
are also involved in provision of ECEC.
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Demographic and Other Social Trends
Australia's under-15 (21 percent) and over-65 (12 percent)
population proportions are both at 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 (1996) on a level with several of the major
European countries in total fertility (1.8) and below the
U.S. 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 15-19s
(1.3 million) and the 20-24s (1.4 million) constituting 15
percent of the population in 1996 but projected to fall to
12 percent. Of the 15-19s, 86 percent were living with parents
and 77 percent were in full-time or part-time study. Some
32 percent of full-time job commitments were to apprenticeships.
Australia's 52 percent was among the OECD's highest employment
rates for 15-19s. During the late 1990s, 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 21 percent of families between
1988 and 1999. Marriages tend to be late, as is child bearing.
Half of all couples cohabitate before marriage.
Of children in Australia (late 1990s), 14.1 percent were
in lone-parent families, placing Australia with Canada, the
Nordic countries, the U.K., and the U.S. and well above European
and other OECD members.(3)
Australia has the lowest rate of sole parent employment among
the English-speaking countries but (because family benefits
are generous, child-support collections and work by sole parents
are growing) the lowest child poverty rates in the group.
Full-time work by lone mothers has been decreasing and the
part-time component growing.(4)
Seventy (70) 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 1997
nearly half the mothers of the 4's were at work (not a high
rate). Those mothers with partners (62 percent) were more
likely to be at work than lone parents (51 percent). Only
7 percent of lone mothers with children under 3 were in full-time
work.(5)
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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. It provides three
types of means-tested social security benefits:
- "Pensions." The aged, veterans, invalids, lone parents
and "carers" are subject to a relatively generous means
test.
- "Benefits" for the unemployed, the sick, and those who
fall outside of any category are more like social assistance,
but are less restrictive than "income support" in the U.K.
and far less than U.S. social assistance.
- There is a wide range of supplementary allowances, including
payments to families with children. The most important of
these are the family allowances(6).
Thus the competing interpretations of the system as "a form
of negative income tax for the elderly and some other groups,
or…an integrated system of social assistance and partial social
insurance"(7).
However, the view that this system is different is buttressed
by the fact that there is virtually no discretion in any of
the components of the social security system, while rights
are spelled out in the legislation.
Economists and other policy scholars have pointed to "notch
effects" and potential poverty "traps" created by intertwined
income or means-tested programs which often constitute components
of a family's income package.
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(8).
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(9).
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(10).
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Child, Youth and Family Policies
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 only Australia, New Zealand, and the United
States lack national, paid, statutory leave in the industrial
world.
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 A$870.30 in 1997.
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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 jurisdiction and variations in
policy approaches and delivery and the absence of a national
ECEC framework. 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.(11)
Australia's assistance for child care has been limited in
the past, but major efforts at reconceptualization and improvement
have been launched in recent years. According to Meyers and
Gornick, in the mid and late 1990s, of children aged 0,1,2,
some 5 percent were served in publicly-financed care; of the
3,4,5s, some 40 percent were served in publicly-financed care,
typically part-day(12).
For pre-schoolers, informal arrangements, mostly with
relatives, is the most common form of care(13).
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 child care 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(14).
Australia was part of a 2000 OECD review of ECEC in
twelve countries. Consult the full Australian report on
line or download it at: http://www1.oecd.org/els/pdfs/EDSECECDOCA017.pdf
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Family Allowances
Prior to July 2000, Australia had operated seven different
schemes to provide help to low-income parents and their children,
four through the social security system (family allowance,
parenting allowance, family tax payment, and guardian allowance)
and three through the tax system (rebates for sole
parents, rebates for dependent spouses, and family tax assistance).
To end work disincentives (ineligibility as soon as one reached
a threshold) and numerous notch problems, the current schema,
part of a general tax reform offers a 30 percent taper above
the threshold. There is one Family Tax Benefit (with extra
help for single income families) and a child care benefit.
Payments are made through a single, specialized Family Assistance
Office where once they were split between social security
and taxation departments. Yearly per child maxima are to be
increased(15).
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Child and Family Tax Benefits
See above.
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Child Support
After a debate through the 1980s, Australia phased in its
program in 1988 and 1989. While there is no advanced maintenance
(child support assurance) scheme, there is a child support
agency which assesses support by the non-resident parent according
to a standard formula, which takes account of the number of
children (18 percent of taxable income for one child, 36 percent
for five or more). The agency attempts to enforce compliance
and there was a reported 2/3 compliance rate in 1997. Because
of complaints, non-resident parents have since been required
to pay a minimum of about U.S. $15 weekly. With regard to
the lack of advance maintenance, we note the other benefits
available to lone parents. There is on-going public debate
as to whether child support measures are too lenient or too
harsh.
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Other Child Conditioned
Income Transfers
A supplement to low income families with children originally
known as Family Allowance Supplement became the Additional
Family Payment (AFP) in 1987. It will recall the U.S. E.I.T.C.
and a similar U.K. program expanded in the Blair era. It offered
relatively high-threshold means-tested non-taxable assistance
for working parents with children. Since 1993 pensioners and
other beneficiaries with children in their care have received
the AFP on the same income basis as working families. (The
income test cuts in at 65 percent of average male earnings
and the exemption level increases with the number of children.)
Some 10 percent of all children in families received the AFP
and another 15 or 20 percent were in pensioner and beneficiary
families, making a total of about 25 percent. A table for
the early 1990s suggests that while the numbers of children
receiving Basic Family Payments was four times as large as
the AFP group, the expenditures for both programs were almost
identical(16).
There also are "double orphan" pensions and some smaller
means-tested programs to assist families of children who have
disabilities, care for orphans, have multiple births(17).
A Sole Parent Pension (SSP) is payable to a person who is
not a member of a couple and is caring for a child who is
under 16 years of age, or qualifies the person to receive
a Child Disability Allowance. A person is not required to
seek work to qualify for SSP. If such person obtains work,
the income may affect the rate payable under the income test.
In fact, as noted above, Australia's lone mother employment
rate is low and increasingly part-time.
There has been public concern in recent years as payments
to sole parents have increased from 240,000 to 382,000 in
a decade and are said to be heading to 405,000 by 2006. (Only
Ireland and U.K. have so much sole mother non-employment.)
The trend has been for more lone mothers, even with young
children, to work even if receiving income support, but the
work is usually part-time. The situation is being debated:
while opinion polls show the general public not favoring the
current exemption from work until a child is 16, over half
of respondents favor an exemption until the child is 5, when
a child may enter primary schools and also favor part-time
work(18).
A recent high-level governmental commission has proposed
(May, 2000) that sole parents demonstrate "some form of social
or economic participation in return for continuing economic
support"(19).
If both parents of a couple are unemployed, one of the parents
(who must be the primary carer of a child under 16) may chose
to receive a Parenting Allowance (PA) instead of the standard
unemployment benefit (Newstart Allowance); then, an active
job search is not required.
Unlike the Newstart Allowance, which is taxable, a component
of the PA is not. Unlike almost all the above child-conditioned
social security benefits, that are paid through the family
allowance system, a child dependent supplement to the Temporary
Disability Benefit is paid out by state authorities. It is
flat rate, indexed, and has some state variation.
In an OECD analysis (1997 data) of the family income impact
of all income transfer and tax measures, it was found that
a unemployed married couple with two children would have had
73 percent of the income of the same family in work. An unemployed
lone parent would have had 58 percent.
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Child and Adolescent Health
Australia has a universal health care system, but the private
sector is more important than in other OECD countries, except
for the U.S. Its health expenditure effort as a portion of
GDP or of overall public spending is comparatively high, but
mid-stream in per capita dollars in the "rich" world. Services
in public hospitals are free, but 40 percent of all in-patient
bed, nonetheless, are in an extensive system of private hospitals.
There are fees for GP consultations (about A$25 per visit)
but these are reimbursed (80 percent) by the governmental
health insurance known as "MEDICARE." Rather than require
individual payments, doctors may elect to be paid directly
by government (on an individual or group basis). There are
a variety of cost concessions for low income people. A small
income-related health tax levy supplements general revenue
financing. Dentistry is a free-market service.
Australia has good infant health and mortality indicators.
Systematic efforts are made to produce comprehensive reports
on child and youth health(20).
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School-Aged
Children: Policies and Programs
Most children enter primary school at 5. The compulsory ages
are 6-15. Some 90 percent in the age range 6-16 are enrolled.
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Youth
Students are eligible for a means-tested allowance. The Australian
unemployment insurance system includes the Youth Training
Allowance for men and women age 16 or 17 who are unemployed
and the Newstart Allowance, paid to those aged 18-60. As is
typical a recipient must be available for work and actively
seeking it. There is no duration limit. While the benefit
is taxable there in effect is no tax in the absence of other
income.
A government website, The Source, has been developed by
the Commonwealth Youth Bureau as a resource for Australian
youth and those who work with them (www.thesource.gov.au).
Focused on the 15-25 age group, it includes an interactive
section, materials and leads about careers, jobs, education,
financial aid, various networks, as well as sports and entertainment
news.
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| Reconciliation
of Work and Family Life
The considerable flexibility with regard to leaves and flexible
child care options is the major Australian strategy for reconciling
work and family life. However, limited child care provision
for the under-3s, or of all-day coverage for pre-schoolers
are a major gap. Critical scholars have commented that in
Australia achieving integration of work and family life is
achieved by having one parent, predominantly the mother, work
part time(21).
As noted above single mothers have comparatively low labor
force participation and that is largely part time.
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| Housing
Benefits
Only 5 percent of rentals are in government-owned housing.
There is, however, an agreed policy that, except for higher-income
households, people not pay more than 20-25 percent of income
on housing costs. Housing assistance takes two forms:
- Rent Assistance, a non-taxable cash supplement for recipients
of social security or veteran benefits (families with children
in several categories included under family allowance scheme),
who rent in the private market. Students in government-subsidized
study (AUSTUDY) are eligible: this is an income-and asset-tested
benefit. It provides 75 percent of the amount over a threshold
rental.
- There is also a Commonwealth subsidy to states for public
housing (a limited program).
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References
Bertelsmann Foundation, editor,
International Reform Monitor, Issues 1-3, 1999- 2000 (Gutersloh,
Germany: Bertelsmann Fouindation).
Jonathan Bradshaw, et al, Support for Children: A Comparison
of Arrangements in Fifteen Countries, Department of Social
Security, Research Reports No.21 and 27 (London: HMSO, 1993).
(Vol. I and II).
Tony Eardley, "Sole Parents and Welfare Dependency," Social
Policy Research Center Newsletter, No. 76 (May, 2000),
pp. 1-4, 5, 6 (Australia: New South Wales).
Tony Eardley et al, Social Assistance in OECD Countries:
Country Reports, Department of Social Security, Research
Report No. 47 (London: HMSO, 1996), Vol. II, Ch. 2, "Australia".
Janet Gornick and Marcia K. Meyers, "Cross-National Family
Policy Developments During Economic Hard Times." presented
at annual research conference, Association for Policy Analysis
and Management (APPAM), Nov. 1999 (forthcoming). Tables 1,2.
Innocenti Report Card, Issue No. 1 (June, 2000), "A
League Table of Child Poverty in Rich Countries" (Florence,
Italy: UNICEF Innocenti Research Center).
Marcia K. Meyers and Janet C. Gornick, "Early
Childhood Education and Care: Cross National Variation in
Service Organization and Financing." Sheila B. Kamerman,
Ed., Early Childhood Education and Care: International
Perspectives, (New York: Institute for Child and Family
Policy, Columbia University, 2001), pp. 141-176
Lynelle Moon, Carol Meyer, Jacqueline Graw, Australia's
Young People: Their Health and Well-Being 1998, (Canberra:
Australian Institute of Health and Welfare, 1999).
OECD in Figures: Statistics for the Member Countries
(Paris: OECD, 1999 edition).
Frances Press and Alan Hayes, OECD Thematic Review of
Early Childhood Education and Care Policy: Australian Background
Report, (Sydney: Departments of Community Affairs and
Education), 2000.
Ilene Wolcott and Helen Glezer, Work and Family Life:
Achieving Integration (Australian Institute of Family
Studies, 1995.
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Notes
- Eardley, et. al, Social Assistance, Vol. II, Ch. 2, "Australia."
- Innocenti Report Card, Issue No. 1, figure 2.
- Ibid., figure 3.
- OECD in figures, p.12.
- OECD Thematic Review, section 1,2,6.
- Eardley, et all, op. cit., pp. 6-10.
- Ibid, p.11.
- Bradshaw, et al, Vol. II, Table 9.14.
- Meyers and Gornick, Tables1,2.
- Innocenti Report Card, figures 1,2,3.
- OECD Thematic Review
- Meyers and Gornick, Table V.
- Bradshaw et al.
- Eardley, op. cit., p.40.
- International Reform Monitor, Issue 2 (April 2000), p.
22.
- Ibid., p.9.
- Ibid., pp.9-10.
- Ibid., Also, Eardley, " Sole Parents and Welfare Dependency,"
p.1.
- Eardley, Ibid.
- See above re: Moon, 1998 and Moon, Meyer, Graw, 1998.
- Wolcott and Glezer.
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Contacts
Washington Embassy
- Embassy of Australia
- 1601 Massachusetts Avenue, N,W.
- Washington, DC 20036
- Phone: (202)
- Fax: (202)
Ministry
- Social Policy Research Centre
- University of New South Wales
- Sydney, NSW 2052, Australia
- Fax: 61(2) 9385 7838
- Phone 61(2) 9385 7308
- Email: sprc@unsw.edu.au
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