Addressing Child Poverty: Reflections on the Australian Experience

Peter SaundersSocial Policy Research Centre

University of New South Wales

Presented to the Workshops on Solutions to Child Poverty, Wellington, 19 September and Auckland, 21 September 2012

Outline of Presentation

• Some international evidence

• Overview of the Australian experience

• Recent research on child poverty and deprivation

• The need for a child-focused approach

• Reflections and implications (?) for New Zealand

Child Poverty and Overall Poverty in OECD Countries

Child Poverty among Couple and Sole Parent Households in OECD Countries, 2008

Recent “Success Stories” • Only 5 OECD countries reduced their child poverty rate by more than one

percentage point between the mid-1990s and 2008

• They were: the UK (-4.9), Chile (-3.8), Italy (-3.6), Hungary (-3.1) and Ireland (-2.0)

• Three of these countries started with child poverty rates well above the OECD average (UK, 13.6%, Ireland, 18.3% and Italy, 13.7%)

• All of the other (4) countries where child poverty declined started of with above-average rates, i.e. no country with a below-average rate managed to reduce it

• Although it has not reached all of its interim targets, the UK child poverty strategy is a good example of what can be achieved

The (OECD) Bottom Line

‘To generalise, all countries with very low levels of child poverty (under 5%) also have relatively low levels of joblessness … and relatively low market income poverty, together with tax and transfer systems that are very effective at further reducing child poverty, usually through high levels of spending rather than through targeting … Countries that have high levels of child poverty appear mainly to have very high levels of poverty among working families, and tax and transfer benefit systems that are not effective in reducing it.’ (Whiteford and Adema, 2007)

Australia’s Child Poverty Pledge

• The pledge that: ‘By 1990, no Australia child would need to live in poverty’ was (unexpectedly) announced in the run-up to the 1987 federal election

• It was followed by substantial (targeted) increases in family payments (and intense debate about the poverty line)

• The child poverty rate fell (and the poverty gap even more) but poverty was still well above zero (or even 5%) by 1990

• The government was heavily criticised, despite making in-roads into child poverty that were major when judged against historical and international (OECD) experience

• The UK child poverty targets were more realistic and the overall strategy was more comprehensive and considered: targets can work

‘Current’ (and ‘Recent’) Changes

• The Melbourne Institute estimates that the child poverty rate in 2009 was 13.2% (based on 50% of median income, before housing)

• Was virtually the same as in 2001, although it declined to 11.9% in 2006 before rising to 14% in 2008

• Between 2001 and 2009, two-thirds of all children under 11 were not in poverty in any year, just under a quarter (22%) were poor for 1-2 years, and in-seven (13.3%) were poor for 3-9 years

• The longitudinal (HILDA) data has generated important new information on the dynamics of poverty

• Data release delays are an issue for researchers (and policy makers

Long-term Trends in Child Poverty in Australia

Changes in Real Median Income

Spending on Family Allowances and All Family Benefits (% of GDP)

Australian Spending on Family Allowances (ratio of OECD-22 average)

The Deprivation Approach

• Does not depend on reported income or the use of an equivalence scale

• Provides a better (more credible?) way of identifying who lacks the resources needed to achieve an acceptable standard of living

• Identifies poverty as those who lack ‘the living conditions and amenities which are customary, or at least widely encouraged or approved’ – an ‘enforced lack of socially perceived necessities’

• By identifying specific dimensions of living standards, the approach can be applied specifically to children (and other household members)

BUT

• The approach is subject to conceptual and measurement controversy

• Generally uses the views of adults to identify deprivation among children

Identifying Deprivation

The SPRC Deprivation and Exclusion Surveys

• Interviews with low-income and disadvantaged Australians (2005) – to identify essential items

• The Community Understanding of Poverty and Social Exclusion (CUPSE) Survey

- conducted in 2006, n = 2,704, response rate = 46.9%

• The Poverty and Exclusion in Modern Australia (PEMA) Survey

- conducted in 2010, n = 2,645, response rate = 46.1%• PEMA follow-up survey (n = 533, response rate = 60.2%)• Surveys of selected welfare service clients conducted in

2006 and 2008

Are Identified Essentials Robust?(unweighted percentages)

Are Children’s Needs Universal?(unweighted percentages)

Identifying Child Deprivation

Two Important Issues:a) Important to distinguish between children living in

deprived households and child deprivation – these may overlap but are not the same

b) Should ideally be based on children’s/young people’s own views on which items are essential, and whether or not they have them

The latter requires a child-focused approach, involving both qualitative and quantitative studies

Overall Changes in Deprivation, 2006 to 2010 (weighted percentages)

Essential items 2006 2010Warm clothes and bedding, if it's cold 0.3 0.4Medical treatment if needed 2.1 1.7Able to buy medicines prescribed by a doctor 4.5 3.5A substantial meal at least once a day 1.2 0.9Dental treatment if needed 14.5 13.1A decent and secure home 7.1 6.7Children can participate in school activities and outings 4.9 4.3A yearly dental check-up for children 13.2 11.0A hobby or leisure activity for children 7.8 6.8Up to date schoolbooks and new school clothes for school-age children 5.9 4.7A roof and gutters that do not leak 4.8 7.4Secure locks on doors and windows 5.0 5.8Regular social contact with other people 4.7 6.2Furniture in reasonable condition 2.8 2.2Heating in at least one room of the house 2.1 2.5Up to $500 in savings for an emergency 19.6 17.8A separate bed for each child 2.2 2.1A washing machine 1.1 1.0Home contents insurance 11.1 9.5Presents for family or friends at least once a year 6.8 5.5Computer skills 4.6 2.9Comprehensive motor vehicle insurance 9.8 9.1A telephone 1.9 3.8A week's holiday away from home each year 23.6 19.8Average deprivation rate 6.7 6.2

Changes in Child Deprivation Rates (weighted percentages)

Item

Couples with children Sole parent families

2006 2010 2006 2010

Medical treatment if needed 1.5 1.3 7.0 6.0

A substantial daily meal 0.6 0.6 2.1 2.8

A decent and secure home 4.8 5.5 23.0 10.2

School outings & activities 3.7 3.2 12.1 9.8

Dental check-up 10.0 9.9 23.1 19.7

Hobby/leisure activity 5.2 5.8 21.7 12.0

Schoolbooks/school clothes 4.1 3.4 14.7 15.3

Separate bed for each child 1.9 1.3 2.2 4.7

Presents for family friends 5.3 4.4 17.8 9.2

Week’s holiday away 22.0 21.2 52.0 38.6

At least 2 out of 10 items 13.6 13.2 40.1 28.9

At least 2 out of 5 child items 5.1 6.2 15.9 18.1

Overlap Analysis (weighted percentages)

Poverty(60%

median)

Deprived(D≥2)

Consistentpoverty – poor and deprived

Poverty (50%

median)Excluded

(E≥7)

Poorand

excluded

WORKING-AGE ADULTS

Single 14.0 13.6 18.1 14.2 15.0 21.0

Couples, no children 19.9 21.5 13.0 20.6 20.6 16.1

OLDER ADULTS

Single 2.5 5.9 0.9 1.4 5.3 0.0

Couples 8.5 7.0 6.0 9.9 6.6 4.8

HOUSEHOLDS WITH CHILDREN

Couples 39.4 42.1 47.4 38.3 39.9 40.3

Sole parents 15.7 9.9 14.7 15.6 12.6 17.7

All households 100.0 100.0 100.0 100.0 100.0 100.0

Children’s Input is Crucial

‘In the UK, there is very little research into the material items and experiences that children think are necessary for a ‘normal kind of life’. We know what adults think children need, but not what children themselves see as necessary. As a corollary, we know little about how lacking these items and experiences affects children’s wellbeing ... Measures of family circumstances face an important shortcoming in classifying children as poor only if they live in income-poor households’ (Main and Pople, The Children’s Society, 2011)

The Making a Difference Study

Conceptual Frameworks:• A multi-dimensional, living standards approach to poverty• The ‘new sociology of childhood’Key Research Questions:• How do young people (aged 11-17 years) experience economic and other

forms of adversity?• What changes do they think would make a difference to their lives?Methods:• Qualitative study conducted in 8 metropolitan data collection sites• Interviews with 96 young people (accessed through services), 13 parents

and 24 service providers• Extensive pre-interview ‘familiarisation’ visits to build trust and gather

background/contextual information• Area profiles based on official (ABS) and local administrative data

Young People’s Perspectives

School Costs; teaching and learning; (lost) opportunities and barriers;

relationships with teachers; parent relationships with school; relationships with peers

Neighbourhood Activities they knew about and those they did not; lack of facilities

and places to ‘hang out’; costs; peer communities; urban decay; safety and violence

Family Relationships; money; resources; space; dynamicsAspirations Immediate and later for self and for own children

Households are Complex!

Location Matters!

Areas of concentrated disadvantage with limited opportunity structures•High levels of stigma •Stigma associated with place, not with person•Sense of belonging•Narrow knowledge and horizons

Areas of socio-economic mix with availability of opportunity structures•High levels of stigma•Stigma is experienced personally•Sense of isolation•Broader knowledge of possibilities - but are they seen as achievable?

Policy Has Made a Difference

• Large increases in family payments to low and middle income families

• The child support scheme increased the incomes of many sole parents

• Strong and sustained employment growth been important (although the jobless rate is still too high)

• Affordable child care is still a problem for many parents• The one-off payments introduced in 2009 as part of the fiscal

stimulus response to the GFC• Improvements in dental health services for low-income groups• Widespread spending on school improvement projects in 2009-10

Conclusions and Implications

• The OECD child poverty experience is very diverse• Child poverty is the result of many factors – hence the need for solutions• To be successful, policy must address the big issues (e.g. Inequality and

joblessness) as well as the specifics (e.g. benefit levels, targeting and work incentives)

• Child poverty targets provide an important focus – for policy makers and the community

• They must be realistic and sustained (and be politically acceptable) • Research has an important role to play in debating concepts, documenting

the situation and monitoring change and impact – measurement matters!• Poverty line studies must be supplemented by living standards approaches• Children’s views must be reflected in the instruments used to measure child

poverty and assess the impact of policy