Yesterday marked the 10-year anniversary of Julia Gillard’s misogyny speech. Yet on the very same day in 2012, her government cut welfare payments for single-parent families — predominantly single mothers — leaving them $60-$100 a week worse off.
Other commentators have reflected on Gillard’s complicated legacy as an at-times disappointing feminist leader. I’m more concerned about the policy failure this moment exemplified, which started long before Gillard and continues today — a shameful neglect of family welfare.
More than one in six Australian children live in poverty. That’s over 774,000 kids with half-empty lunchboxes. Who have crooked teeth because their parents can’t afford braces. Who wave goodbye to their classmates aboard the school excursion bus, unable to join them because mum and dad couldn’t pay the extra fee.
Around 17% of the homeless population are children under 14, most of whom lack housing because their parents do too. This rate has remained stagnant since at least 2006. And children who are persistently poor are almost five times more likely to be persistently poor as adults.
Poverty is a deceptively simple problem
The media often depict child poverty as “a complex and multi-faceted issue”. But this overcomplicates matters. Poverty means a lack of money. Give families more money and the problem goes away. They may still face other issues like domestic violence or mental health, but these problems are also usually helped by extra income.
How to allocate that extra income? Wages growth would help families with at least one employed parent, but lower-income and single-parent families inevitably rely on welfare payments too.
Yet as Sean Kelly recently wrote, “many of these kids [in poverty] are already receiving the maximum amount of support. Our government knows about them, helps their parents a bit, but has decided not to help them enough to keep them out of poverty.”
Our child benefits are pretty stingy
Australia’s family benefits are globally mediocre. They’re technically right on the OECD average, but it’s dragged down by countries like Turkey and the US who provide next to nothing.
Part A of our Family Tax Benefit (for low-income earners only) provides $63-$257 per child per fortnight, while Part B (for middle-income earners too) provides up to $168 per child per fortnight.
You’ve also got to jump through multiple hoops to qualify. For instance, you must care for your child “at least 35% of the time”. And there are complex income tests and rate adjustments based on both partners’ incomes, as well as interactions with your tax returns.
The low rates and joint means tests leave stay-home parents financially dependent on their spouses, which makes it harder for domestic violence victims to leave abusive partners.
And as our chief mechanism for fighting child poverty, our family benefits are failing. Child poverty has climbed over 2.5% since 2003.
Hawke, the child’s champion
Bob Hawke might have slightly overpromised in 1987 when he vowed to end child poverty by 1990, but his government was undoubtedly more committed to fighting it than any government since. Due to his ambitious suite of welfare policies, child poverty fell by 50% among kids with non-working single parents and 80% for those with two non-working parents.
But subsequent governments eroded Hawke’s legacy. Howard moved single parents onto Newstart (now JobSeeker), Rudd clipped rates by indexing them to prices rather than wages, Gillard backdated Howard’s move, and Abbott and Turnbull froze rates altogether.
The Albanese government, many of whose ministers idolise Hawke, should follow his example and restore his poverty-crushing policies. Particularly, rates must be raised to make up for years of backsliding.
A handy helper in taxing times
There are good reasons for Albanese to go further, towards the European model of universal child benefits — basically a universal basic income for children. The World Economic Forum — hardly a collective of socialist firebrands — argues it’s a “fiscally responsible welfare policy” because abolishing means tests “avoids arbitrary benefit cut-offs for working families with children who may see their incomes fluctuate”.
It would also help the government if it were to scrap or modify the stage three tax cuts. A common argument in favour of cutting upper tax brackets is that many individuals on otherwise high incomes might not be “rich” if they’re supporting multiple dependents. As The Australian Financial Review‘s John Kehoe wrote last week: “Where mortgage repayments and rents are expensive, a family raising children with one parent on [$200,000] is not wealthy.”
This hypothetical person earns more than 98% of us, so their family is probably doing fine. But Kehoe raises a valid issue — household composition is one of the biggest determinants of economic wellbeing. As economist David Sligar has noted: “A worker who lives alone may earn the same wage as another worker who supports four children and a disabled spouse, but the former household is far better off than the latter in per capita living standards.”
Child payments are the best way to deal with this “big family bias” because they’re paid per child. Conversely, tax cuts give single rich people just as large a benefit to spend on fine wines, while single-earner families still stretch the earner’s pay to afford formula and nappies.
Taking the saved cash from halting stage three and funding generous, universal family benefits would ensure single-income households aren’t left behind, and provide Albanese and Chalmers a defensive line against AFR-style backlash.
Politicians love invoking children when moralising about the deficit or the latest moral panic, but they haven’t been serious about ensuring their wellbeing. It’s time they put their money where their mouths are.
How expensive is raising children in 2022? Let us know your experiences by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
Thanks for this article.
Covid supplementary payments have shown everyone how to alleviate poverty – give poor people more money.
And child poverty in Australia is not a “wicked problem”. It is a political decision, one we should all be ashamed of.
A malleable workforce must be kept as near to debt as possible and there is no greater ‘hostage to fortune‘ than ones children.
Some men will do a lot and put up with extreme provocation to provide for them but, in the last instance , a mother will do anything at all for hers since our species began.
At least until fairly recently, in evolutionary terms.
The disgraceful problem that is the subject of Ben’s insightful essay will always be with us while we have capitalism. Child poverty is only one kind of impoverishment that is fundamentally built into this system. Until the general population wake-up to this fact and votes for a democratic socialist alternative, these articles will always be with us. No amount of tinkering around the edges of capitalism will provide a permanent and viable solution to poverty of any description.
Couldn’t agree more Robert.
Thanks for your supporting remarks Johan. They are appreciated.
The general populace swim in Koolaid. Not gonna hold my breath waiting for them to realise it’s not water…
Then there is the issue of families having to pay two thirds of their income in rent. Braces, text books, fresh food, or a roof over the head for the next six months? Hell of a choice. You can give poor families more money, but until there’s affordable housing, it’s all going in someone else’s pocket.
All the things mentioned in the article are worth doing. and would certainly reduce family poverty. But “Give families more money and the problem goes away” is simply untrue. If Bob Hawke had said ‘no child need live in poverty’ instead of ‘will live in poverty’ then he would have been correct. The reality is that additional money is not the answer for some families.
Children are subject to their parents choices. People make bad choices that have consequences. In some families addictions will distort decisions – primarily alcohol, drugs and gambling. There are ways around at least some of this. A really good one is providing school breakfasts and lunches – it ensures kids get food and increases attendance and retention at school – which in itself is a path out of poverty.
There are other services that could get around parents having to pay for kids. For example an entitlement to free medical and dental care would be another – but done so that there is no need for up-front payments to then be claimed back. This would enable, for example, a mother to take children for care without getting funds from a perhaps indifferent or abusive husband.
Despite these sort of work-arounds there would likely still be a small proportion of child poverty.
For those who think the answer to families that make bad choices is for social/welfare workers to organise to take the children into care – no. That should be a last resort as dysfunctional families can often be better than no family. Besides, the welfare model tends to pick on the poor and ignore the abuses of those who have more money – unless they become extreme.
All the suggestions you made mirror the situation in Britain, pre 1979 and I would fully endorse.
I would disagree only with your final comment that “…dysfunctional families can often be better than no family…” and suggest fostering – eager and well qualified persons abound – even Myf Warhurst has now done the necessary and qualified to take part.
Parentdectomy is often the best solution to the abuses you illustrated in the 2nd para. and first part of this sentence above.
Great comment Peter.
With your line about ‘ways around parental addiction’, my mind went to Gabor Mate’s excellent book ‘The Realm of the Hungry Ghost’, which explores addiction, its underpinnings and ways to deal with it.
Is a fantastic read and helps create empathy and understanding for the addicted
This makes sense to me. My family has been trying to help a poor family with funds, but it goes nowhere, even without drugs, drink or gambling. The money is spent wastefully in my opinion. I know that poverty and its associated stress make it difficult to manage money. School lunches are a good idea, but these children have poor attendance and minimal engagement. I don’t know what can be done about that.
I agree that families should not be broken up before every other strategy is tried. It would be so cruel.
Free and timely medical and dental care would be a good start. Possibly better resourced community sporting and activity groups would be good for vulnerable children.
Perhaps parenting lessons too.
We learn to parent from our parents, and it takes time and thoughtfulness to overcome the blueprint.
Lots of parents are not engaged enough with their kids and don’t know how to be engaged. I see it frequently.
Abolishing the gambling industry would go a hell of a long way, but would obviously require balls of steel, the likes of which we haven’t seen since Whitlam… And look where that got him.
As Robert REYNOLDS says above, capitalism is the main problem, responsible for a hell of a lot more ills than mere poverty; mass extinctions and ecological collapse for instance.
The only thing that can save us is an anarchist revolution, but the average citizen is so far from realising that, the situation is thoroughly dire.
Sorry but your title is completely in error. It should read: “More than one in six children live in poverty – and Australian society seems fine with that”
We as a society makes our choices so why use the government as a whipping post for our own lack of caring? I don’t see Australians taking to the streets over this injustice or better still offering to pay more tax and promote real equal opportunity for all to remedy this situation.
Just maybe the problem is simply too big to solve? But wait on 2018 figures the poverty rate for children 0 -17 yrs of age was 13% in Australia. AND I can barely believe my eyes it was approximately 5% in Denmark, but wait 4% in Norway and Finland and this must be a joke 2.6% in Sweden but how?.
But hang on the good old USA comes to our rescue at 22.4% along with the UK 20% and South Africa 32%
Just goes to show you cannot trust those Nordics to tell the truth.
So all is still fine in the land of egalitarianism and equal opportunity..