2.1
This chapter describes entrenched disadvantage in Australia, including some groups at higher risk of entrenched disadvantage, and factors that contribute to intergenerational welfare receipt.
2.2
It is important to understand the extent and complexity of intergenerational welfare dependence, and the current policy responses across government, as a first step to forming a strategic response.
2.3
The inquiry’s Terms of Reference use the terminology ‘Intergenerational Welfare Dependence’. The Committee acknowledges that this terminology is not supported by many in the welfare sector. The Committee recognises that many factors contribute to a need for welfare assistance, and that ‘dependence’ carries an implication of individual fault. Throughout this report, the more neutral term ‘entrenched disadvantage’ is used.
2.4
The Committee heard that there are many complex factors that contribute to entrenched disadvantage. This report does not examine all the factors in detail, but draws on the evidence given to the Committee to highlight the most important elements. This includes groups that are more at risk of entrenched disadvantage, and factors that may contribute to people receiving welfare support from one generation to the next.
What is entrenched disadvantage?
2.5
The Productivity Commission has found around three per cent of Australians (around 700 000 people) experience persistent and recurrent poverty. These households do not experience mobility across the income distribution and instead remain in the bottom deciles. This ‘stickiness’ is indicative of entrenched inequality.
2.6
The Department of Social Services (DSS) described:
… a segment of the population where disadvantage is entrenched and multigenerational, and manifests itself across a range of activities and areas of policy …
2.7
DSS also commented that:
The Australian social security system serves the vast majority of people well. It is not to criticise that to say that in certain locations and in certain circumstances it doesn’t necessarily service well.
2.8
This is not an issue unique to Australia. The Australian Institute of Family Studies states ‘like much of the OECD, Australia continues to have a small proportion of people who experience persistent disadvantage according to a number of social and economic measures.’
2.9
Research from the Life Course Centre ‘suggests that the playing field is not level for all families and children. Disparities in young people’s outcomes are not simply the result of their or their parents’ differential efforts. Unequal opportunities also play a critical role.’
2.10
By itself, receiving welfare does not indicate entrenched disadvantage. Some families require support from the welfare system intermittently, or in response to one-off circumstances. This inquiry focuses on families and individuals that received income support, and whose children subsequently require income support.
2.11
The Life Course Centre pinpointed the difference between the term welfare dependence and welfare use:
It is important to differentiate welfare dependence from welfare use. The former implies lengthier periods of time on welfare or a tendency to repeatedly move in and out of welfare support over long periods. The latter implies fewer and shorter periods of time on welfare, or welfare support associated with specific life course stages such as youth allowance for students, with no expectation that support will be ongoing. A life course approach and longitudinal data that enables consideration of the timing, duration and sequence of welfare support, as well as consequences for others as implied by the concept of linked lives, is critical. Consideration should also be placed on access to opportunity.
Intergenerational links
2.12
There is evidence of a link between parents receiving welfare payments and their children also receiving payments. Life Course Centre research shows young people aged 18-26 years are almost twice as likely to need social assistance if their parents have a history of receiving social assistance. The extent to which social assistance is linked across generations, however, depends on the nature of those benefits.
2.13
The Life Course Centre found the relationship is particularly strong in the case of single-parent payments, disability payments, and carer payments where the likelihood of young people receiving social assistance is 1.6 times larger if their parents received any of these three payments than if they did not.
2.14
In contrast, partnered-parent payments and unemployment payments are associated with rates of social assistance receipt among young people that are 1.3–1.4 times higher. These correlations do not indicate causation; they identify potential pathways where welfare receipt might link across generations.
Impact of parental unemployment
2.15
Regardless of its cause or exacerbating factors, the Committee heard that the negative impact on children of long-term parental unemployment has been well documented.
2.16
The Salvation Army noted a broad range of effects of intergenerational unemployment on children:
Children raised in welfare-dependent families face challenges that restrict their abilities and capabilities, preventing them from moving out of a state of disadvantage. They often lack positive role models, experience low educational attainment, self-sabotage or are simply discouraged from aspiring to live more fulfilling lives than those around them.
2.17
The Smith Family summarised the impact of intergenerational unemployment on children, stating:
The most significant impact of intergenerational unemployment and welfare dependency on children is the long-term effect on their educational engagement and outcomes, and in turn their ability to find work, and break the welfare cycle.
2.18
The Public Health Association of Australia concurred:
Social conditions in early childhood have a strong impact on early child development. Child development then affects subsequent life chances through skills development, education, and occupational opportunities…Children’s lifelong development and outcomes in education, income, health, and wellbeing are closely aligned with their parents’ situations.
2.19
The Productivity Commission identified that children living in jobless households, a group that stands out among the multiple measures of inequality and disadvantage, are ‘particularly at risk of economic disadvantage becoming entrenched, limiting their potential to seize economic opportunities or develop the skills with which to overcome these conditions.’
2.20
More specifically, research by the Australian Institute of Family Studies (AIFS) and the Australian National University (ANU), drawing on LSAC [Longitudinal Study of Australian Children] data, found children living in a jobless or short part-time hours family had poorer cognitive and social-emotional outcomes compared to children in families where at least one parent worked full-time or long part-time hours.
2.21
The study found that while poorer developmental outcomes for children of jobless families and those working short part-time hours could partially be explained by parental characteristics such as education level, ‘joblessness does appear to have an effect on developmental outcomes’, amongst other factors.
2.22
The study’s authors wrote joblessness can affect parent wellbeing in two ways:
when accompanied by low income, joblessness reduces material living standards and can adversely affect parents’ health, ability to participate socially, and ability to improve their level of human capital through activities like education
an absence of paid employment can be stressful, possibly having a negative effect on parental mental health and relationships.
2.23
The study was not able to identify the precise mechanism by which a lack of parental employment translated into poorer outcomes for children. But the researchers stated it appeared that the financial consequences of low levels of parental employment, and the negative impacts on parental mental health were important.
2.24
International research has also found income poverty affects child developmental outcomes with stronger effects when low income starts early and is prolonged.
Factors contributing to entrenched disadvantage
2.25
It is generally recognised by researchers and service providers that there is no single explanation, factor, or mechanism that links the outcomes of one generation to that of the next. Nevertheless, there are certain factors that correlate with intergenerational welfare dependence.
2.26
Submissions and witnesses spoke of these factors, and how disadvantage is embedded in particular communities, is persistent, and is multi-causal. These factors include:
geographic location (accessibility / remoteness);
Indigenous and parental status;
suitability of available employment;
health and family welfare; and
availability of appropriate support systems.
Complex interaction of factors
2.27
Before discussing separate elements, it is important to emphasise that these factors interact in complex ways for each community, family and individual. Evidence to the inquiry is clear that there is no single trajectory or explanation that adequately accounts for intergenerational welfare dependence.
2.28
The Australian Institute of Health and Welfare (AIHW), in its research into persistent disadvantage, notes the multifaceted nature of the problem. Various attributes, characteristics, events and factors interact in complex and dynamic ways to alter the likelihood and persistence of disadvantage:
The likelihood that external risk factors will result in persistent disadvantage seems to be amplified or mitigated by various individual characteristics. These interactions between environmental and individual characteristics are further complicated given that, while some individual characteristics are largely stable over time (for example, ethnicity and sex), others may or may not change (for example, attitudes) and yet others will certainly change (for example, age, employment status, family status).
2.29
The AIHW notes the interaction between three categories of issues in the context of intergenerational disadvantage:
individual attributes: Indigenous status, sex, attitudes about control over life events, and age;
family characteristics: structure and relationships, income and housing, life events, job loss, changes in health, relationship conflict and violence, and educational opportunity and human capital; and
wider risk factors associated with geographical location and changes to economic and labour market conditions.
2.30
In addition to personal characteristics, broader institutional contexts have been found by the Melbourne Institute to be important in the transmission of disadvantage between generations: families, education and health systems, labour markets, tax and transfer policies ‘all interact to drive the extent to which children’s opportunities and outcomes depend on their family background.’
2.31
The Productivity Commission explained that the probability someone will experience disadvantage is influenced by a range of factors. Many of these factors are interlinked and when combined, can have a compounding effect. It notes ‘untangling how the various factors interact and establishing causality is difficult.’ For instance, while research can identify various factors, only a small share of people exhibiting these factors will experience deep and persistent disadvantage.
2.32
Some research has shown that it is not clear whether some factors exist prior to disadvantage or as a consequence of disadvantage; whether unemployment is a cause or consequence of other aspects of disadvantage; or whether there is a correlation in factors that lead to parent and child receipt of income support or a direct causal process where children are more likely to receive income support if their parents did.
2.33
The Productivity Commission explains many important factors cannot be observed or objectively measured, such as motivation, values, and attitudes. Further, many influencing factors increase the probability of a certain outcome, they do not determine that an outcome will eventuate. ‘There is no single predictable trajectory.’
2.34
This multidimensional complexity, encompassing a diverse range of indicators, makes it difficult, according to the Productivity Commission, to ‘reach a single conclusion about the overall trend in disadvantage.’
Geographic location
2.35
The Youth in Focus study found the probability of receiving income support is not constant across the country. There is geographic variation in the receipt of income support with receipt more common in inner regional than major city areas, and also in some states/territories.
2.36
The Committee heard that in Queensland, for instance, over 50 per cent of the most disadvantaged people live in only four places; 76 per cent in ten places. In Victoria, entrenched disadvantage is highly prevalent in identifiable regions and has been for significant periods.
2.37
The Salvation Army explained some factors that drive the concentration of disadvantage geographically:
In regional and rural areas there is often not the availability and opportunities of a vibrant job market compared to city areas. Housing costs to live in the city have become unaffordable, and as a result many people have been forced to the regional areas in search for cheaper housing. However, this also means that there are fewer job opportunities in these areas. For people on low incomes, this creates further financial burdens and imposes additional barriers for those seeking work in the inner city areas due to the cost and availability of public transport, increased fuel and vehicle costs, and longer travel times.
2.38
The National Rural Health Alliance agreed, stating: ‘Disadvantage is more prevalent and persistent in regional and remote parts of Australia … all the population groups at higher risk of poverty and social disadvantaged are present in greater proportion in rural areas.’
Groups at greater risk of entrenched disadvantage
2.39
The Committee heard evidence concerning a range of groups at greater risk of experiencing entrenched disadvantage in Australia, including people living in single-parent families, unemployed people, people with disabilities and Indigenous Australians. According to the Productivity Commission, these groups are particularly likely to experience low incomes, deprivation, and social exclusion. The Commission stated:
For people in these circumstances, there is an elevated risk of economic disadvantage becoming entrenched, limiting their potential to seize economic opportunities or develop the skills with which to overcome these conditions.
Indigenous Australians
2.40
The Aboriginal Medical Services Alliance Northern Territory emphasised the multi-causal nature of intergenerational welfare dependence in Indigenous communities, stating:
To the extent that a link between long-term parental welfare receipt and a child’s future need for social assistance exists, it is much more likely to be driven by parental circumstances outside of a person’s control, such as disability, geographic location or single parent status, than circumstances that could be linked to personal choice, such as engagement with employment.
2.41
The Committee’s attention was drawn to prevalence of disadvantage experienced by Aboriginal and Torres Strait Island people, including:
Disproportionately high level of disadvantage and prevalence of intergenerational trauma faced by Aboriginal children and families … Families are dealing with generations of loss, poverty, substance abuse, violence in the home and lateral violence.
2.42
The Committee heard about unequal health outcomes for Aboriginal children, often exacerbated by poor access to support services and early childhood education:
Aboriginal children in the Northern Territory are much less likely to enjoy a safe and healthy life than others. These children—especially in remote communities—experience poorer health outcomes, including three times the infant mortality rate, 0-4 mortality rate and low birth weight rate compared to non-Aboriginal children, along with very high rates of hospitalisations for infections. They attain much lower Australian Early Development Census (AEDC) and National Assessment Planning Literacy and Numeracy (NAPLAN) scores than the national average, indicating poor readiness for school and predicting lower educational outcomes.
2.43
Institutional discrimination was identified as a significant factor reducing the ‘likelihood of Aboriginal people accessing essential services in areas such as the health system as well as the media, education, welfare and criminal justice systems and in the provision of public housing.’
2.44
The Cape York Institute highlighted inappropriate welfare service delivery as a contributing factor to ongoing disadvantage. Mr Pearson stated:
We have a massive industry of programs and services for disadvantaged families, a great proportion of which does very little, in my view, to really break disadvantage … I think we've reached a stage where the supposed beneficiaries of the service delivery intervention are just on life support, and the only active people are the service deliverers. They're the ones with the jobs. They're the ones with purpose, meaning and things to do. The disadvantaged are just clients. You might as well put a barcode on their forehead so that somebody else can receive a payment on their behalf.
2.45
The Cape York Partnership emphasised:
Government–led welfare and redistribution policies have been dwarfed by the minimal support for structural reform or specific measures that can overcome disadvantage. Passive welfare and the government machinery that force feeds it continues to thrive in our region … Indigenous agency, development, empowerment and productivity are all prisms by which all public policy objectives and expenditure should be considered at a regional and local level, including an unwavering focus on rebuilding social norms, lifting education outcomes, and engagement with the real economy.
2.46
The Cape York Partnership, describing the overrepresentation of Indigenous Australians in entrenched poverty, stated the problems and the solutions are ‘as relevant to the people of Cape York as … to the people of Macquarie Fields or West Cairns or any other part of Australia where entrenched disadvantage is concentrated and wreaks its havoc street-after-street and year-after-year.’
Single parents
2.47
Although a number of groups are particularly likely to experience disadvantage, the Brotherhood of St Laurence, amongst others, identified single-parent households (overwhelmingly female-led) as the most impoverished family type in Australia.
2.48
The National Council of Single Mothers and their Children (NCSMC) testified that single mother families are over represented in areas of poverty, hardship, deprivation, violence and inequality. This has occurred despite broad periods of prosperity. The NCSMC explained that this situation is exacerbated by cuts to welfare payments, inflexible activity requirements, and problems with the child support system. It estimates it would take four generations to rectify.
2.49
The Public Health Association of Australia agreed that policy responses sometimes exacerbate rather than relieve the ability of single-parent families to meet household expenses.
2.50
The lack of predictable, secure, paid work was identified as a significant contributing factor; as was the shortage of affordable, flexible childcare, and unfriendly work practices and conditions. The Brotherhood of St Laurence noted Australia has one of the lowest employment rates for sole-parents, the vast majority of whom are single mothers.
Other contributing factors
2.51
Of the forty-one submissions received, the submissions identified more than eighteen broad categories of factors associated with entrenched disadvantage, ranging from unemployment, poverty, health, disability, experiences of violence and drug and alcohol use, to housing, education, social exclusion, transport, geography, food insecurity, caring roles, and cost and availability of childcare.
2.52
Intergenerational welfare dependence was framed as a ‘symptom of a more complex problem’ by most submissions. The Salvation Army illustrated this, stating:
Many people who access services at The Salvation Army present with multiple and complex needs, such as physical ailments, mental health issues, family violence, homelessness, addictions, trauma, isolation, low levels of educational attainment and training, and a lack of vocational skills and experience. These barriers often prevent and preclude many Australians from entering the workforce or being able to sustain employment.
Structural barriers such as intergenerational and regional socio-economic disadvantage, housing affordability, labour market changes (specifically casualisation of employment resulting in increasing numbers of the underemployed), and an income support system that fails to protect people from poverty and impede people from gaining employment.
2.53
yourtown noted that barriers exist in many areas, encompassing educational, vocational, contextual, practical, psycho-social, cognitive-motivational, and anti-social elements. yourtown emphasised that people experiencing long-term unemployment are not an homogenous group, with different cohorts facing different barriers and varying experiences of long-term unemployment.
2.54
The complexity of intergenerational welfare dependence has implications for policymaking. The Life Course Centre noted:
Reducing welfare dependence requires attention to both human capabilities and opportunity structures such as education, labour markets, housing, transport and community services.
Barriers to employment
2.55
The Committee received evidence on the difficulties faced by people experiencing entrenched disadvantage in finding suitable employment, with submissions identifying a number of compounding factors including: location, transportation, appropriate and flexible employment opportunities, support to maintain employment, and parenting responsibilities.
2.56
The Smith Family noted ‘most families [experiencing entrenched disadvantage] live in areas where there are limited economic opportunities and high levels of unemployment and underemployment’. This was supported by evidence from the Victorian Alcohol and Drug Association that disadvantage was more prevalent in growth corridors that are often far from places of work.
2.57
This problem is exacerbated by limited transportation options, particularly in rural, regional, and outer-metropolitan areas; and in instances where operating a vehicle is unaffordable. A study by Edith Cowan University has found ‘for people without a car, public transport can increase travel time and complexity by a significant multiplier.’
2.58
A lack of entry-level employment opportunities within the Australian labour market was identified:
In May 2018, there were eight unemployed or underemployed people for every job vacancy. When employed people changing jobs are added to the figure, the number applying for each vacancy doubles. Entry-level jobs have therefore become less common, creating more competition for limited positions. The vast majority of new jobs created in Australia now require a vocational or university qualification. Jobseekers with the lowest qualifications (secondary education to Certificate II or III) are the least attractive, from an employer perspective.
2.59
Further, submissions noted there could be a lack of flexibility in entry-level positions and these types of positions did not always accommodate the needs of people who are long-term unemployed and experiencing entrenched disadvantage. Often significant support is required for employers to persist with someone experiencing entrenched disadvantage and making the transition to work. The Salvation Army testified:
We find that for some longer term entrenched people who are unemployed sometimes it takes about three or four goes for them to get a job that they can actually hold down for longer than four months, because they're still in the process of trying to understand what it means to work, what it means to be responsible, what it means to show up every day, what it means when they've had a problem to just not storm out and walk out, which is the way their lives have been conditioned.
2.60
The Committee heard that the quality of employment was also important. It notes the Productivity Commission’s finding that while ‘paid employment can be a route out of a state of disadvantage, it does not guarantee an absence of recurrent disadvantage as some jobs, particularly low-skilled jobs, are low-paid and hours of available work not assured.’
2.61
In addition to limited entry-level employment opportunities, the Salvation Army identified parenting responsibilities to be a significant barrier to finding work. The Brotherhood of St Laurence, drawing on data from the Australian Bureau of Statistics stated, ‘access to affordable and good quality child care enables women’s workforce participation. Caring for children is the main reason women report for not looking for a job with more hours.’
2.62
Attitudes towards childcare and availability of suitable services influence parents’ participation in paid work. The Australian Institute of Family Studies found a variety of childcare-related issues could affect employment decisions, particularly of single parents:
parents may be unwilling to accept jobs that compromise their own values about the best way to care for their children;
shortage of locally available childcare, or of childcare that parents believe is of suitable quality;
unwillingness to leave young children in the care of others;
availability to take children to and from school;
access to supervision of older children before and after school; and
ability to fit work in with care responsibilities, especially a lack of flexibility in low-paid, low-skilled jobs.
2.63
However, the Life Course Centre suggested that helping disadvantaged parents to gain education and employment could be an important first step in breaking the cycle of intergenerational disadvantage only if the employment creates a better environment for children in the family:
…not all employment is good employment. Our research on parents in insecure employment or employment that requires very long hours of work shows that children aged 4-9 years fare worse on social, emotional and behavioural development outcomes than similarly aged children with parents in secure employment with shorter work weeks.
Health and family welfare
2.64
Evidence presented to the Committee identified health, in broad terms, as a cause, consequence and compounding factor in the persistence of entrenched disadvantage. Experience of trauma is often cited as a precursor to a range of issues that contribute to entrenched social disadvantage. The Committee also heard that poorer health outcomes are experienced by people in rural, regional and remote Australia, and by Indigenous Australians.
2.65
Health has a significant impact on the ability to find employment and exit poverty. The Smith Family wrote:
Being in a household where no member of working age is working or a household where at least one member has a disability or long-term health condition, significantly reduces the likelihood of exiting poverty and increases the risk of falling back into poverty after an exit.
2.66
The National Rural Health Alliance described the need for welfare support as an outcome of inequalities in social determinants of health.
2.67
Mental health is increasingly recognised as a significant barrier to participation in the labour force. The Department of Social Services Valuation Report found the number of people with reported psychological/psychiatric conditions in receipt of working age welfare payments has grown steadily over the last five years.
2.68
Several submissions discussed the incidence of family violence, which has a ‘profound impact on physical and mental health. It can lead directly to serious injury, permanent impairment, disability or death.’
2.69
The use of alcohol or other drugs was raised as one risk factor for families associated with socio-economic disadvantage and repeatedly involved in child protection. The Victorian Alcohol and Drug Association warned that in growth corridors, where disadvantage is more prevalent, there may be ‘significant challenges in accessing the various support services providing little leverage to address various issues.’
2.70
The Aboriginal Medical Services Alliance Northern Territory warned, however, of conflating welfare receipt and anti-social behaviour, including alcohol and drug misuse. It stated:
This perspective is reductive and inaccurate and fails to acknowledge the dynamics present in many of these communities and regions, including a lack of viable labour market, poor education, severe health problems and high levels of trauma and other complex social issues.
2.71
The Public Health Association of Australia described several essential elements for the climb out of poverty and welfare dependence, with health (in its broadest sense) one of many factors to be overcome. The compounding nature of problems to be overcome was illustrated by the following statement:
First, people must be aware that alternatives or options exist for a particular issue they are facing. Second, they must believe that those alternatives are available. Third, they must know the means of reaching for alternatives. Fourth, they must have access to those means of reaching for alternatives. Fifth, they must be able to access them. Finally, they must be able to achieve and maintain change. Then, do all of that again across each of the other issues which you have identified as needing to change.
2.72
Research has shown children are particularly sensitive to parent health and welfare during the early years of life. Families facing issues including poor mental health, substance abuse and domestic violence, can be less able to provide the nurturing environment required for child learning. A 2011 study found more than thirty per cent of children aged 4-5 residing with a parent who has poor mental health, are classified in the bottom 15 per cent of the overall development domain.
2.73
The Committee heard that research has found disadvantage becomes intergenerational when women with social and health challenges, or those living in poverty, have a baby with health problems. ‘This can lead to developmental disadvantage, leading to learning disadvantage. Learning disadvantage often leads to labour market and income disadvantage.’
2.74
Factors of disadvantage, including poor parental mental health and substance abuse have a strong association with increased risk of child abuse and neglect.
2.75
Children who have experienced trauma, neglect or abuse in their early years have a higher likelihood of developing ongoing behavioural and learning problems, substance abuse, poorer mental and physical health, and poorer labour market outcomes.
2.76
There are also many instances of children taking on roles as parental carers due to parent mental health, disability, or alcohol and drug issues. In such cases:
These additional responsibilities can cause isolation and stress, and impact on children’s abilities to go to school, do their homework, spend time with friends or get a job. Children may experience a loss of hope to be able to fully participate in education, impacting on entering the workforce in the future.
2.77
Experiences of family violence in childhood are known to have profound negative life-long and intergenerational impacts. Experiences of family violence can severely impair children’s physical health, learning, cognition, and social and emotional development.
2.78
Research has also pointed out, however, that not all children exposed to adversity early in life experience long-term effects. A 2012 study found ‘children vary tremendously in their response to adverse childhood experiences, there is no single path from early adversity to poor social, emotional, cognitive, and mental health outcomes.’ yourtown stated ‘…good parenting can protect children growing up in disadvantaged settings.’
Education and early childhood development
2.79
Submissions to the Committee highlighted three key points with regard to education and entrenched disadvantage:
poor or incomplete education is a significant contributor to unemployment and entrenched disadvantage;
regardless of aspirations for themselves or their children, people experiencing entrenched disadvantage face difficulties engaging in education; and
a crucial way to help people trapped in intergenerational disadvantage is to provide access to quality education.
2.80
Drawing upon HILDA (Household, Income and Labour Dynamics in Australia) data, the Smith Family wrote ‘those with low levels of education (Year 11 and below) are less likely to exit poverty and are at greater risk of falling back into poverty if they do exit.’
2.81
Witnesses raised concerns that current Job Network arrangements do not support the completion of Certificate I and Certificate II qualifications, which is often a necessary step towards completion of higher educational qualifications. Further, participation in some job training programs is impeded by mutual obligation requirements.
2.82
The time-sensitive nature of education was emphasised by Social Ventures Australia, ‘an individual’s lifetime earning capacity is largely determined by the age of 18 and education is one of the most important contributors.’
2.83
This was supported by evidence from Save the Children who stated:
We know the non-completion of school or failure to gain other post-secondary qualifications substantially increases the risk of young people not making a successful transition into full time employment. Lack of qualifications means that workers are more likely to be unskilled with flow on effects including: higher unemployment rates, higher take up of welfare benefits and larger participation rates in labour market programs.
2.84
Submissions noted disadvantage and vulnerability start early: ‘The first five years of a child’s life, particularly the first one thousand days, are crucial to their development and can shape other outcomes through life.’
2.85
There is significant variation in attendance of children at childcare across families and communities in Australia:
Although 91 per cent of children in families where two parents are employed attend some form of preschool program, only 68 per cent of children where neither parent is employed attend. Further, children in single parent households are more likely to attend preschool if the parent is employed (80 per cent), than if the parent is not employed (68 per cent).
2.86
The Brotherhood of St Laurence noted ‘while some children attend day care as infants, many do not engage with Early Childhood Education and Care until age three or four (if at all). By the time they start preschool and then school, they are already lagging behind their peers.’
2.87
Research has highlighted the importance of early childhood education:
It can shape children’s development and can be particularly important where family environments are troubled. These settings also have the potential to provide positive adult-child interactions and social networks for families.
Access and quality can be a potential barrier to parental participation in the workforce.
2.88
The Productivity Commission has identified several studies, including the Longitudinal Study of Australian Children, which point to the role of preschool in improving children’s readiness for school and their performance. Quality early childhood education, especially for children from socioeconomically disadvantaged backgrounds, has the potential to provide a strong start to a good education and academic success.
2.89
Despite universal access, there are lower levels of participation amongst vulnerable groups and children from disadvantaged backgrounds are more than twice as likely to be developmentally vulnerable at the start of school. Some barriers to participation include availability of transport, housing transience, poor inclusiveness practices, lack of awareness of services, reluctance to engage for cultural or personal reasons, and government ‘activity test’ requirements.
2.90
Research from Edith Cowan University noted the lack of financial resources means that children at primary school level experiencing entrenched disadvantage can often not participate in extra-curricular activities. Without access to such activities, children have a lesser chance of ‘seeing their futures as being different from the model provided by their parents and community.’
2.91
yourtown showed this is compounded by school attendance and education is likely to suffer when families experience multifaceted disadvantage, including financial hardship, poor housing/overcrowding or homelessness, family conflict or dysfunction, mental health issues or drug and alcohol use.
2.92
Parent education levels also affect their child/ren. The Youth in Focus study found that educational attainment correlates with intergenerational receipt of income support. Overall, low-income families tend to have a low level of education; less educated parents tend to have less educated children who have a higher likelihood of becoming unemployed. A person’s access to, and participation in, higher education can increase life opportunities, especially in the case of children from low socio-economic backgrounds.
2.93
Life Course Centre research has found certain groups, ‘such as young mothers who are not in employment, education or training, are more likely to experience disadvantage with flow-on effects for their children.’ It further found, ‘achieving a university degree reduces the negative effect of parental joblessness, suggesting that parental joblessness is most harmful for Australians who leave education before earning a university degree.’
2.94
However, Save the Children cited OECD research that found, ‘an individual’s chance to do better than their parents in education can depend on ranking on the social ladder and a parent’s level of educational attainment. For example, children only have a 13 per cent chance of attaining tertiary education if their parents did not attain upper secondary education.’
2.95
Save the Children further noted:
The level of parental educational attainment also goes to networks and attitudes. Unskilled young people may not have much access to friends or relatives who know about training options, limiting the knowledge of pathways available. They may be deterred from further schooling. For example, a study was undertaken on attitudes of parents to education, finding that the educational aspirations of students and parents is the most important factor in explaining gaps in SES student completion. While low SES students at age 15 were less likely to want to complete school, only 58 per cent of students classified as low SES said their parents wanted them to go onto further schooling – compared to 73 per cent for high SES students.
2.96
The Smith Family explained the flow-on effects of poor access to education:
Australian children from low socioeconomic backgrounds are at risk of poor educational outcomes from their first year of school. This risk increases as students move through school as highlighted by the data below:
Early school years: A third of students (32.6 per cent) from Australia’s most disadvantaged areas are developmentally vulnerable in one or more key areas in their first year of school. This compares to 15.5 per cent of children from the least disadvantaged areas.
High school years: Around three in five Year 5 students (59.6 per cent) whose parents did not complete Year 12 achieve above the national minimum reading standard on NAPLAN compared to 94.0 per cent of students who have a parent with a university degree. There is a similar gap in other areas of performance, for example, in Year 9 numeracy.
Post-school years: Six out of 10 students from the lowest socioeconomic backgrounds complete Year 12 or equivalent, compared to around nine in 10 of those from the highest socioeconomic backgrounds.
2.97
Education as a factor, though, is rarely isolated. The Life Course Centre explained that families relying heavily on government assistance are more likely to struggle to invest time and money in their children. ‘Children from these families have worse educational, socio-emotional, and behavioural outcomes, and the lack of parental investments can explain part of this gap.’
Availability of support
2.98
Many submissions to the inquiry highlighted a lack of support and resources available for people living in situations of entrenched disadvantage, with poverty identified as a significant barrier. Social Ventures Australia, drawing upon their experience in the sector, said: ‘we are … acutely aware of the challenges existing social service systems face–including service fragmentation, inadequate funding arrangements, inability to address complex needs and a lack of tailored and intensive support.’
2.99
The Australian Institute of Family Studies stated:
It is widely agreed that poverty is not only about low income, but also about deprivation. Family disadvantage means, more generally, a lack of access to resources enabling a minimum style of living and participation in [the] society
2.100
yourtown put forward that parents who are living in poverty, have mental health problems, and who are young are most likely to struggle with parenting, hampering their ability to play the necessary role in shaping their child and the opportunities in life the child will have. The submission stated:
There is universal acceptance of the importance of parenting on childhood development. Parents are not only a child’s first teacher, they are their first caregiver … Secure attachment in the early years positively impacts on a child’s later development and life chances, with insecure attachment negatively affecting educational attainment as well as social and emotional developments.
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yourtown further noted that parents faced a ‘procedural madness’ of service support systems hampering access to appropriate community services and a positive wider environment.
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Some evidence emphasised the need for tailored support to meet people’s unique circumstances. yourtown research showed young people have different experiences of long-term unemployment and understanding this is critical for program design. For instance:
Young men, who have a higher rate of long-term youth unemployment than their female counterparts, told us that not having a driver’s licence, limited transport, low literacy and numeracy, anger management issues, unstable accommodation, and offending history were more important barriers to employment. Young women, on the other hand, told us that they more often experience a lack of available jobs, low self-esteem and mental health issues as employment barriers.
First Australian people ranked a lack of qualifications as the main barrier to employment, whilst young people with culturally and linguistically diverse (CALD) backgrounds rated difficulties in accessing social and institutional support due to their residency or citizenship status as a principal work barrier. The top issue for young people in regional and remote areas was the lack of jobs, whereas young people metropolitan cities were more likely to view limited work experience, low work skills, and having no car as barriers to employment.
Impact of the welfare system
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As discussed later in this report, the Committee heard that, overall, the welfare system in Australia provides adequate support for most people when they need it. However the Committee also heard evidence that the current welfare system is not well structured to respond to the more complex needs of Australians experiencing entrenched disadvantage. In some circumstances, aspects of the system may be reducing the effectiveness of welfare assistance.
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Improving the welfare system does not always mean simply increasing the funding. Logan Together, while identifying shortcomings in current welfare arrangements, emphasised it is not always an issue of the amount of funding to social service providers:
We already spend a phenomenal amount of money on human services in communities like Logan and all around the country. We're doing some work with Boston Consulting Group at the moment. Their estimate across the states, territories and Commonwealth of the bill on human services—not welfare but human services—is that we spend about $43 billion a year. In our own city, if you ask the question, 'How much do we spend on child and family related issues?' we think the answer's about $200 million. So we're spending extraordinary amounts of money.
The Department of Social Services did a micro case study on the community of Roebourne, in WA: 1,400 people; $42,000 a head. This is not welfare spend. This is not payments. This is services: $42,000 for every man, woman and child. And nothing's got better in the last 15 years.
Insufficient level of payment
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The Committee received evidence describing disadvantage that has arisen as a result of ‘structural’ reforms in welfare policy, such as moving recipients to a lower level of social security payments, without addressing underlying causes of disadvantage.
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Many submissions noted the insufficiency of current welfare payments, particularly for people experiencing entrenched disadvantage and dependent on payments for long periods of time. The Life Course Centre stated, ‘families who heavily rely on government assistance are more likely to struggle investing time and money in their children.’
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Catholic Social Services stated that people ‘on welfare payments do not receive sufficient income to live a frugal but dignified life.’ The Australian Association of Social Workers stated material deprivation was inevitable for people living on welfare payments.
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Of particular concern to some submitters is the policy of moving parents onto the lower Newstart Allowance once the youngest child turns eight, at a time when the costs of raising a child increase. The National Council of Single Mothers and Their Children stated, ‘the pain and the distress are palpable when they cannot quarantine their children from hardship and financial distress and the ramifications.’
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Evidence was also heard about effective marginal tax rates, which can be as high as 70 per cent. Catholic Social Services stated that to overcome the effective marginal tax rate, people on Newstart had to find a full-time job. This is not a typical path for people who have been long-term unemployed.
Conditionality
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For several decades various governments have used conditionality as part of delivering welfare support to Australians. Conditionality, also referred to as ‘mutual obligation’, means that people receiving welfare must also meet conditions, such as applying for a certain number of jobs, or participating in training. This is a highly contested area of policy delivery.
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Several submissions questioned the effectiveness of conditionality requirements for people receiving welfare payments—pointing to a lack of evidence to support their efficacy, and the potential to contribute to deeper poverty.
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Commenting on a place-based welfare conditionality trial in Shepparton, FamilyCare wrote there was little evidence of sustained, positive outcomes and ‘for a significant minority of participants, welfare conditionality made their personal circumstances worse.’
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FamilyCare stated ‘conditionality measures create additional challenges for people whose lives are already complex and prone to crisis.’ Further, conditionality removes choice, has the potential to ignore the impact of trauma, and can be insufficiently sensitive to service user needs. For instance, service providers were required to make conversations about employment central in their interactions with people who were too young to have ever been in a work environment; rules required parents to give priority to activities other than caring for their children. Service providers that participated in the survey agreed that positive outcomes had occurred in spite of compulsory conditionality, not because of it.
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The Salvation Army described that mutual obligation requirements can ultimately force people into short term, low paid, unstable and insecure temporary jobs rather than focusing on training with a view to gaining meaningful employment:
It is questionable whether increased conditionality is an effective measure to reduce welfare dependence, and unclear whether it produces sustained and positive outcomes … “benefit sanctions do little to enhance people’s motivation to prepare for, seek, or enter paid work”. For some income support recipients, it made their personal and financial circumstances worse.
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Engender Equality spoke of the impact on women of conditionality:
Reducing resourcing to families through increased conditionality, or compulsory income management by removing access to cash will increase incidences of violence, the vulnerability of women to the impact of family violence and abuse, as well as increase children’s exposure to violence in the home.
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The Brotherhood of St Laurence noted the current compliance focus of employment services meant providers were diverting resources from front-line assistance. The result is an erosion in satisfaction of staff and jobseekers. ‘Coercive activation measures have generally failed … to improve outcomes for disadvantaged jobseekers.’
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Aboriginal Peak Organisations of the Northern Territory was similarly opposed to conditionality measures that are contributing to disadvantage, instead urging a focus on facilitating improved educational outcomes, skills training and generating employment opportunities. The organisation noted CDP participants have more onerous obligations than participants in jobactive.
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The Aboriginal Medical Services Alliance of the Northern Territory stated:
Empowerment and control over life circumstances are fundamental determinants of health and wellbeing which are undermined when people are subjected to highly onerous compliance and quarantining mechanisms. This is evidenced by the increasing numbers of people who are choosing to disengage entirely from the Community Development Program (CDP), rather than being subject to the program’s onerous and discriminatory compliance measures. The result of this disengagement is further entrenched poverty and disadvantage due to reduced resources in communities with already high levels of need.
Committee comment
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A significant amount of evidence presented to the Committee identified the complex interrelationship of factors that contribute to entrenched disadvantage. The Committee recognises the resilience shown by many Australians experiencing entrenched disadvantage.
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There is no single cause or path to welfare dependence and entrenched disadvantage, and therefore there is no ‘silver bullet’ solution. This complicates the policy responses available to governments.
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The Committee heard a variety of experiences associated with conditionality, with ‘mutual obligation’ requirements challenging some welfare recipients, particularly depending on their geographical location, availability of suitable jobs, health, wellbeing and personal capabilities.
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The Committee recognises that given the range and complexity of issues involved, addressing intergenerational welfare dependence requires targeted, early and sustained interventions.
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The Committee understands that if a child’s parents are long-term unemployed or unwell, or a child does not participate in early learning opportunities, or if the family is living in long-term poverty, there is a greater risk of poor outcomes for the child. However, the Committee considers that comprehensive and targeted programs that assist families through difficult periods can improve a child’s chances of avoiding entrenched disadvantage. The principles underlying successful programs are discussed further in Chapter 3.