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The treatment of families in the Australian welfare state, 1984 to 2010.


Family policy involves some important but difficult issues. Should governments actively support couples with children? How far should they support sole parents? Should there be tax concessions for all families with children? What balance should be struck between support for families and support for the elderly? These are in part questions about stages in the typical life cycle, but they are also questions about the vertical distribution of social support. Researchers in the family policy field face a daunting task in trying to follow government aims and social outcomes. This is aggravated by a sequence of policy and nomenclature changes that make it difficult to keep track of 'who gets what'. However, the Australian Bureau of Statistics (ABS) has an excellent set of fiscal incidence figures from 1984 to 2009-10 that allow us to draw conclusions about the net effect of welfare state policies at the household level (ABS 1987; 1992; 1996; 2001; 2007; 2012). (2) In this paper we use this evidence to examine three topics: whether families have gained or lost welfare state support across time; whether changing support for families has affected the vertical distribution of benefits and taxes; and how the economic position of families with children compares with that of the elderly.

It is common to regard the welfare state as primarily concerned with moderating the vertical distribution of economic welfare. However, the horizontal dimension is also important, and many scholars today analyse the welfare state primarily in terms of age and family dimensions. Using fiscal incidence evidence, Lloyd and colleagues (2005, v) concluded that 'there is substantial redistribution from younger households without children in the first half of their life-cycle to older retired households in the second half of their lifecycle'. Using the same kind of evidence, Harding and colleagues (2006, 195) concluded that 'The impact of the welfare state ... varies greatly by household type, with older Australians and sole parents emerging as the largest gainers from redistribution'. They observed that 'while there is substantial redistribution toward lower income couples, on average couples with children are not net gainers from the taxes and benefits considered in our study'. In a study of 16 OECD countries, Cox (2003, 111, 108) concluded that 'the welfare state redistributes away from childless couples under retirement age and couples with children towards single people, sole parents and the elderly. The extent of redistribution away from couples with children is greater in large than in small welfare states'. Sullivan (2000, 193: emphasis in original) has argued that the Australian welfare state is anti-family, and that 'family income protection is the only category of social security in which the value of expenditure per beneficiary and the cost per head of population was lower in 1996 than in 2969'. In his analysis of the New Zealand welfare state and in his partial analysis of the Australian case, Thomson (1999, 13) described a 'redistribution of advantage from younger to older persons [which] has flowed from government and voter choice' (see also Thomson 1996, 2000).

On these views, the Australian welfare state transfers resources from relatively income-rich but asset-poor stages of life to relatively income-poor but asset-rich stages. But it also strongly favours one kind of family, the sole parent family, while giving little or nothing to couple families. However, these are mostly static descriptions of welfare processes. In this paper, following Thomson's example, we will try to give a dynamic analysis, tracking trends across time. Have the redistributive processes described above intensified through the last three decades? What might be driving this changing distribution, if it is indeed changing? And what role does political partisanship play in all this?

Family policy from 1983 to 2010

Labor, 1983-1996

Under prime ministers Hawke and Keating, Labor followed a general policy of economic reform and liberalisation while aiming to keep in place the protections of the welfare safety net. These protections included a system of family allowances for all families with dependent children and a pension for sole parents without work tests or means testing. Non-working sole parents were supported by pension-type payments that have gone under various names: from 1977 to 1989 it was the Supporting Parent Benefit; from 1989 to 1998 it was the Sole Parent Pension; and since 1998 these payments have been classified as the Parenting Payment Single. The Cass inquiry of the late 1980s proposed no major changes to the welfare and pension system, but it did put into circulation the idea that welfare support should have an emphasis on active rather than passive welfare (Cass 1988), encouraging recipients into work or education. The Newstart labour-market program of 1991 was a follow-up of this idea, requiring unemployed welfare recipients to become active job-seekers. Nevertheless, sole parents and non-working mothers in couple families were exempted from pressure to seek work.

Under Hawke and Keating, the main innovation in family policy was a boost for low-income working couples with children, aimed in part at reducing poverty amongst working families and in part to counter-balance the incentives favouring non-work and welfare dependency. It was an extension of the Family Income Supplement introduced by the Fraser government in 1982. In 1987, Labor introduced a stronger version of this as the Family Allowance Supplement. Thus, acceptance of the principle of support for low income working families was bipartisan. In 1993 it became known as the Additional Family Payment. By 1998, 14 per cent of all children under age 16 were in families receiving this support (Whiteford et al. 2001, 27).

In 1988 Labor also introduced the Child Support Scheme to enforce child support payments by non-custodial parents according to a child support formula (unless otherwise agreed between the parties).

The Coalition, 1996-2007

Under Prime Minister Howard, Coalition governments from 1996 to 2007 followed a strategy broadly similar to that of Labor. That approach combined some major economic reforms--in their case, introduction of the GST and deregulation of the labour market--with a commitment to maintenance of the welfare security net. Six principles of welfare provision were proposed by the Minister for Social Security, Jocelyn Newman:

1. maintaining equity, simplicity, transparency and sustainability;

2. establishing better incentives for people receiving social security payments, so that work, education and training are rewarded;

3. creating greater opportunities for people to increase self-reliance and capacity building, rather than providing a passive safety net;

4. expecting people on income support to help themselves and make a contribution to society, through increased social and economic participation reflecting mutual obligation;

5. providing more choices and assistance for individuals and families, with more tailored and individualised assistance that focuses on prevention and early intervention; and,

6. maintaining the Government's disciplined approach to fiscal policy (Newman n.d.).

Kelly (2009, 289) describes Coalition social policy as involving a combination of four ideas:

   redefining the bond between the individual and society according
   to 'mutual obligation'; supporting families as the bedrock
   of the social order; enshrining the idea of 'private choice' by
   individuals in meeting their family needs; and upholding the 'fair
   go' as integral to the social order.

It is notable that 'supporting families as the bedrock of social order' was not one of Newman's six principles. Nevertheless, it was one of Howard's passions. 'The family is the greatest social welfare system mankind has ever devised', he contended (cited in Kelly 2009, 295). 'The thing that has produced poverty in Australia, more than anything else,' he asserted, 'has been the greater degree of marriage failure' (cited in Kelly 2009, 288). On this view, the status of sole parent families was problematic at best. Yet, in 1996, welfare benefits for sole parents were indexed to wages and not just to prices, which would give them a long-term advantage in a rising labour market.

One of the key objectives listed in the 1998 Treasury White Paper that paved the way for introduction of the GST was to 'give greater recognition to the costs of raising a family' (Treasury 1998, 11). The background to this was indicated by Liberal frontbencher Kevin Andrews (1999, 41):

   Following the defeat of the Coalition at the 1993 general
   election, a group of members and senators engaged in a
   two-year discussion of the appropriate way to recognise families
   in the taxation system. Cognisant of the work by Alan Tapper
   and others that indicated no net assistance to families with
   children and a massive intergenerational subsidy to those people
   who raised their families in the 1950s and 60s, our purpose was
   to establish the principle that the raising of children demands
   recognition in the taxation system. (3)

The Treasury paper costed the new tax initiatives at $2 billion (Treasury 1998, 51). Introduction of the GST in 2000 was accompanied by substantial income tax cuts and a simplified and more generous system of family payments. This system (which is still in place) has three parts:

1. Family Tax Benefit Part A, which assists with the general costs of raising children, and was thus the equivalent of the earlier Family Allowance;

2. Family Tax Benefit Part B, which covers the additional burdens on single income families, of both sole parent families, paid at the maximum rate, and single income couple families, paid at an income-tested rate, thus superseding both the Sole Parent Pension and the Family Allowance Supplement or Additional Family Payment; and

3. the Child Care Benefit.

For Howard (2006), this system was the hallmark of his government: a liberalism of sound finances married to a 'social conservatism' of family values embodied in a taxation system with a 'social vision'. The Coalition continued Labor's support for low income families, while also seeking to assist the majority of families with children. According to Kelly (2009, 294), in 2006 'Howard boasted that Treasury analysis showed almost 40 per cent of all families now received more in cash benefits than they paid in tax'. The 2001 First Child Tax Offset and the maternity allowance or 'baby bonus' introduced in 2004 are other expressions of the Coalition's philosophical commitment to families with children.

Labor, 2007-2010

The most recent fiscal incidence figures are for 2009-10, and hence only the first Rudd/Gillard government is covered here. The 2007 Federal election was won by Labor, led by Kevin Rudd running on a slogan of support for 'working families'--traditionally the theme song of the Coalition. The slogan summarised a commitment to supporting families, conditional on them--including sole parent families--seeking to be largely self-supporting. The Rudd government's most important initiative in the period was a Working Families Support Package of $55 billion spread over four years, mostly in the form of tax relief (Treasury 2008). Consistent with Labor's long-held belief in a more targeted welfare system, income thresholds (of $150,000 for families) were introduced for Family Tax Benefit B and the baby bonus, and a range of other measures was introduced relating to child care benefit, fringe benefits tax and income definitions, as part of a conscious effort to put 'fairness and equity' back into the income support and tax systems. Thereafter, the global financial crisis of 2008-09 took centre stage and little change was made in the area of family policy--although in 2009 a payment of $950 was made to every taxpayer who earned less than $80,000 in the previous financial year. As noted below, the Rudd government also significantly increased the aged pension in 2009.


To sum up, Labor and the Coalition shared a single basic strategy--though with important variations on the main theme. Both were concerned to boost social support for families with children, especially low income working families. Labor also expressed support for sole parent families, while the Coalition expressed support for middle-income couple families. The result was steady growth in direct family support. Cass and Whiteford (2009, 4) summarise this shared effort as follows:

   The scope of these improvements in family payments can be
   appreciated by the increase in spending over this period--in
   1988 spending on family allowances (i.e., benefits targeted
   specifically at children) was about 0.5% of GDP; by 1996 this
   had more than doubled to 1.1% of GDP and by 2003 spending
   reached 1.8% of GDP. Including other payments to families
   (maternity benefits and income support for lone parents) further
   increased spending levels to well over 2% of GDP. In 2005,
   Australian spending on cash benefits for families was the second
   highest in the OECD, although spending on services was much
   lower. Australian tax/benefit investment on families is not only
   comparatively high, it is also targeted on low income households,
   sharpening its redistributive and poverty alleviation impact.

Hartcher (2011, 125) remarks that 'expert assessment of the effect of Hawke's "family package" estimated that it cut the number of children in poverty by between 43 and 47 per cent'. He adds (2011, 226) that:

   John Howard introduced family tax payments in his first year in
   office and increased their generosity through his term. Spending
   on government assistance for families was a hallmark of his
   government. When he took power, Australian government
   spending on family allowances was 1.5 times the average for
   OECD countries; a decade later it was twice the average....
   [The] effect was to redistribute income and to make household
   incomes more equitable.

Family policy is, of course, not entirely bipartisan. The relationship between families and the welfare state has had clear ideological dimensions in Australia, with 'the family' being a touchstone of conservative ideology. Labor's focus on vertical redistribution has left it with little interest in using public funds to subsidise child rearing for middle or upper-income earners. The Coalition view that families should enjoy privileged status in the welfare system is supported on the grounds that to treat childless households and families alike is not to treat like as like and is thus inequitable; that cohesive families are socially beneficial; and, more recently, that such measures are demographically beneficial in helping to stem a declining birth rate. But these differences may be more rhetorical than real when we examine the outcomes under different political regimes.

Trends in support for families

In the remainder of this paper we analyse the trends in family support. To determine this, we track both taxation and expenditure. Spending increases intended for particular categories of household may be swallowed up by increased taxes or unnoticed losses in other parts of the budget. In the next three sections we examine trends at the household level for the period 1984 to 2009-10. In the Conclusion, we reflect on how our findings correspond to the policy intentions outlined above. In the discussion below the unit of analysis is the household. Changes in household size might in principle influence the picture. But, in fact, family households experience little change in this period. Couple family households remain very close to 4.1 persons (maximum 4.2, minimum 4.0), while sole parent families are constant at 2.8 persons until 2000, rising thereafter to 3.1 in 2009-10.

In analysing how the welfare system has treated families with children we need to distinguish between trends in the net effect of all social transfers and taxes (direct and indirect) and trends in specialised family payments and tax concessions. Table 1 tracks special family payments and tax concessions. It follows the changing terminologies that have been used. The fiscal incidence figures allow us to track overall trends in these payments and concessions, despite the confusingly changing terminologies. The figures are the average payments for all sole parent households (and not just for those on social benefits) and all couple family households (some of whom do not receive family allowance payments).

Table 1 shows that across the whole period sole-parent support increased somewhat (by $34 per week or 14 per cent), while couple-family support also went up (by $54 per week or 146 per cent). In both cases we can see a dip in 1988-89. From about 1990, however, couple families made gains under both Labor and the Coalition. After 2004, there was a small decline. The relatively small overall gain of $67 per week per family (or 117 per cent) across the whole period is surprising, given the strong commitment of both Labor and the Coalition to increase support to a wide range of families. It cannot be said that direct family benefits were strongly boosted.

Table 2 tracks the trends in total benefits (cash and in-kind) and in total taxes (direct and indirect) and in the net effect after all benefits and taxes are counted. Here we see that total benefits for all families increased markedly, by 70-80 per cent in 26 years. This is an increase greater than the overall social expenditure per household increase of 54 per cent. It is a much greater increase than that shown in the direct benefits figures. Clearly, indirect benefits increases have done more to improve family finances than increases to welfare benefits and family allowances.

However, the net benefits picture is very different. 'Net benefits' is defined as 'total social benefits minus total household taxes'. (Social benefits include public spending on health, education and housing; household taxes include income taxes and indirect taxes.) Net benefits for all families rose between 1984 and 2009-10 by a substantial $109 per week, an increase of 340 per cent. But there is considerable disparity between family types. Overall, sole parent families gained substantially (by 63 per cent), while couple families continued to receive virtually no net support. Total benefits for couples with children did rise markedly, but taxes increased to match them. The trend line in net benefits for couple families includes a large decline in 1988-89 and a large jump up in 1993-94, with a steady state since then. The trend line for sole-parent families is smoother, though also with a dip in 1988-89 (under Labor) and a rise in the most recent period (under Coalition and Labor). There is, then, no evidence of Coalition policy favouring couple families, as compared with their treatment under Labor. Nor is there any evident difference in the treatment of sole parent families. On the contrary, under all governments sole parents (and, as we shall see, the elderly) have gained net support, and under all governments couple families have remained where they were in 1984.

Families and 'middle class welfare'

One common criticism of social policy in these years, especially the later Howard years, is that fiscal rigour was replaced by a vote-buying propensity towards 'middle class welfare'. Most commonly, the criticism is of poorly targeted expenditure on couple families. For example, Hamilton and colleagues (2007, 16) remark that 'The expansion of "middle-class welfare" in recent years --including the private health insurance rebate, the baby bonus, non-means tested family payments and extremely generous superannuation tax concessions --testify to the political power of middle-class perceptions of entitlement' (see also Saunders 2004; Buckmaster 2008-09; Whiteford et al. 2011; Alexander 2010-11). This has prima facie plausibility, given the dramatic growth in transfers to such families apparent in both Table 1 and Table 2. However, the fiscal incidence figures allow us to test these claims more deeply, since they count both taxation and spending. If the 'middle class' (however defined) experienced increases in both spending and taxing, the net effect might be greater 'churning', but it would not be greater 'middle class welfare'. What matters here is whether net benefits to middle or upper income families have grown. The 'middle class' is a notoriously untidy idea. It can mean those above the median or it can mean those around the median. Here we will consider both versions of the concept.

Has there been a shift in the focus of net social support from low income families to middle or upper income families? The fiscal incidence data enable us to track the distribution of net benefits for couple families. We will leave sole parent families out of this picture, since they are not usually regarded as beneficiaries of government 'middle class' largesse. Figure 1 shows that vertical transfers from upper to lower income families strengthened across this 26-year period. The standout feature is the dramatic increase in net transfers from the top quintile. Contrary to the conventional claims about middle class welfare, transfers from the top quintile increased from the mid-1990s onwards. In 1993-94, top quintile households made a net contribution (in 2010 dollars) of $607 per week; by 2009-10 their contribution had risen to $1041 per week. Over this whole period the fourth quintile neither gained nor lost net support. The third quintile--the 'middle' quintile--gained slightly, but the gain took place mainly in the period 1988-89 to 1993-94. This is also the case for the second quintile. Overall, the biggest gains were to bottom quintile families: in 1984 they received $399 per week, but in 2009-10 this had increased by 75 per cent to $699 per week. In general, then, there was no tendency towards favouring the middle or the upper-income quintiles. Trends during the Howard period ran strongly in the opposite direction. (4)

Families and the elderly compared

Fiscal incidence analysis allows us to compare the position of families and the elderly. In this section we track this comparison across the 26-year period of these surveys. The comparison is a significant one, since these are the focal points for social support across the normal life-cycle. Whether such support has been stable and consistent across time is an important test of policy coherence.

Figure 2 compares the average final incomes of couple families, single parent families and people aged 65 years and over. 'Final income' is defined by the ABS as 'household disposable income plus social transfers in kind, less taxes on production'. 'Private income' is defined as 'income from wages, salaries and own unincorporated business' plus 'income from superannuation and annuities' plus 'investment income including dividends' plus 'other non-government income'. Data for 2009-10 are final income minus net imputed housing rent. Net imputed housing rent was not included in the published data from 1984 to 2003-04. It was included in the 2009-10 published data but has been excluded here in order to make a consistent comparison. Figure 2 shows that all three categories of household have prospered. The final incomes of couple families have grown by 84 per cent since 1984, of sole parent families by 78 per cent, and of the elderly by 66 per cent. In the 2000s these increases are steep.

Figure 3 shows a very different picture. Net benefits for sole parent families rose by 63 per cent, and for the elderly by 76 per cent, while for couple families they remained basically flat and close to zero. To sum up these two Figures, the overall picture is one of rising prosperity, but with social support shifting increasingly to sole parents and the elderly.

This trend is not explained by increases in rates of dependency on income support. In fact, policies intended to reduce sole parent welfare dependency seem to have had some impact. As Table 3 shows, in 1984, 68 per cent of sole parent families had government payments as their principal source of gross income, while in 2009-10 this had fallen to 51 per cent. (Increases in child support payments will have contributed to this trend; see Harding & Szukalska 2000.) Income support dependency amongst couple families has been falling since 1993-94, reaching a low point of six per cent in 2010. Amongst the elderly, the figure remained steady (at around 70 per cent) until the last survey period. In recent years, compulsory superannuation--introduced gradually from 1992 --has brought about a small reduction in dependence on age pensions. Yet the Rudd government substantially increased the single age pension in 2009. In the same period, overall dependency on income support has fallen, as we would expect during a period of economic flourishing.

It is commonly supposed that the elderly and sole parents are categories especially in need of social support. By comparison, it is assumed, couple families are doing well and, relatively speaking, are not in need of social support. But are these sound assumptions? To make these comparisons we need 'equivalent final incomes'--that is, final incomes adjusted by an equivalence scale to take account of variations in household size. The resulting figure is an indicator of economic wellbeing; it is not to be taken as a monetary measure. Table 4 shows the equivalent final incomes of sole parents, couple families and the elderly for 2009-10. It demonstrates that in terms of their equivalent final incomes, couples with children are, on average, better off than sole parent families and elderly households. If the comparison excludes net imputed housing rent in the calculation of private income (as was customary in studies before 2009-10), couple families are 30 per cent better off than elderly households. However, if net imputed housing rent is included (as is now accepted practice for the ABS), the difference is only 8 per cent. On this preferable estimate of incomes, the elderly are about 19 per cent better off than sole parent families. (5)

The 2009-10 fiscal incidence study also reports on household assets. As Table 5 shows, in terms of their net worth--that is, assets minus liabilities--older households are clearly better off than families with children. This becomes even clearer if we take household size into account using an equivalence scale. Here we have used the square root of household size as the equivalence scale. The 'equivalent net worth' figures show that by this measure households aged 65 and over are better off than couple families (by about 65 per cent), and very much better off than sole parent families. Sole parent families have a mean equivalent net worth that is only one third of the mean for all households. This figure may be misleading--in that sole parents often share child-rearing with their ex-partners--and their joint net worth may amount to something closer to that of couple families. In any case, it is clear that families with children have a mean equivalent net worth well below the mean for all households.


In this paper we have been using a broad definition of the welfare state, seeing it as including: standard cash transfers (pensions and benefits); in-kind expenditures on health care and education; and both direct and indirect taxation. Between 1984 and 2009-10 social expenditures grew strongly, although taxes also rose almost at the same rate (Fenna & Tapper 2012). Our main purpose in the present paper is to discover the net effect of this growth on families with children. We describe our results under three headings: a comparison between couple families and sole parent families; an examination of the 'middle class welfare' thesis; and a comparison between families with children and the elderly.

On the first topic, the fiscal incidence evidence is that when both benefits and taxes are counted, sole parent families gained social support, while couple families with children made no net gains in these years--whether under Labor or the Coalition. The rise in net benefits to sole parents (63 per cent) is somewhat greater than the general growth in the welfare state (up 54 per cent). Couple families had a very different experience. In 1984 their net benefits were minus $19 per week; in 2009-10 it was $2 per week. Across the 26 years they effectively made no gains.

The observation that couple families are not net beneficiaries in the Australian welfare state was first made in 1987, so it is far from new (Castles 1987). Later research using 2001 fiscal incidence data found that 'For couples with children, the significant amounts of cash and non-cash benefits received are almost completely offset by direct and indirect taxes paid' (Lloyd et al. 2005, v, 12). This paper confirms those findings. In addition, it reveals that while social expenditure has grown substantially over this 26 year period and support for families with children was strong on both sides of politics, the net position for couples with children remained unchanged.

The evidence suggests that the Coalition failed in its avowed intention to 'give greater recognition to the costs of raising a family'. The Labor policy of helping poorer families with children, whether headed by sole parents or by couples, was more successful, since under Hawke and Keating net benefits for sole parents made clear gains (by about 25 per cent) and net benefits of poorer couple families were also considerably boosted (by nearly 50 per cent). These gains were achieved at the expense of more affluent families, who have increased their net contributions since the mid-1990s. The gains were achieved not through direct expenditures, but through increased spending on health and education.

On the second topic, the fiscal incidence evidence contradicts the idea of burgeoning 'middle class welfare'. Debate about middle class welfare is usually focused on couple families with children. Tracking net benefits to couple families shows increasing redistribution from the top income quintile to the bottom income quintile. The second and third income quintiles make no net gains in this period. In particular, there is no trend towards middle-class favouritism in the later Howard years, contrary to a common view.

Finally, the paper draws some comparisons between families with children and the elderly. Our analysis of the trends in net benefits shows that the gains have gone entirely to elderly households and sole parent families, while net benefits to couple families have stayed close to zero. In terms of their 2009-10 equivalent final incomes, couples with children are better off than elderly households by about 8 per cent, while the elderly are about 19 per cent better off than sole parent families. However, using 2009-10 net worth data, the elderly are better off than couple families by about 65 per cent, and very much better off than sole parent families.

Overall, our evidence suggests that the analyses of Lloyd and colleagues, Harding and colleagues, Cox, Sullivan and Thomson are broadly accurate. Welfare state policies redistribute incomes towards the elderly and sole parents and not towards couples with children. In this paper we have shown that there was a trend across the 26 years from 1984 to 2010 to strengthen the gains to the elderly, sole parents and lower income couple families, while net social support for average couples with children did not improve, and for higher-income couples with children it clearly declined.

More speculatively, we would like to make sense of three general features of the period under discussion: radical economic liberalisation; strong growth in both social expenditure and taxation; and the trends in the allocation of that taxing and spending. One tendency has been to see the first two as incompatible, and thus to predict the decline or even demise of the welfare state (for example, Jamrozik 2009). That perspective is plainly incompatible with the evidence of welfare state growth (see Fenna & Tapper 2012). Another tendency has been to look at party political differences as the guide to the overall trends (for example, Brennan 2007). That too looks implausible: whatever their differences in policy, the similarities between trends under Labor and the Coalition are strong. Both main parties wanted economic reform and welfare stability. Both presided over substantial growth in welfare expenditure. And there is little difference between them in terms of allocative outcomes. The trends that we have documented are broadly consistent across time and between political regimes.

A third perspective is that welfare state growth tends over time to favour the politically powerful, and the political power of the older half of the population far exceeds that of the younger half (e.g., Thomson 1999). This view predicts a welfare state that both grows in size and shifts resources towards the second half of life. We have presented evidence that supports this position, especially strong growth in transfers towards the elderly. On the other hand, Labor and the Coalition strengthened cash assistance to both low income families and sole parents. Australian governments have kept a relatively tight rein on age pensions and other expenditure on the elderly. By international standards the Australian welfare state continues to be more tightly targeted than perhaps any other in the OECD. Yet even within that inherited framework, a trend towards favouring the elderly at the expense of the young is evident. To square this with the counter-trends, we need to note two basic facts: that couple families are not net beneficiaries of the welfare state; and that middle and higher income couple families have increasingly been required to subsidise both other families and the elderly.


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Whiteford, P., Stanton, D. & Gray, M. (2001) 'Families and income: changing patterns of social security and related policy issues', Family Matters, 60, 24-35.

Whiteford, P., Redmond, G. & Adamson, E. (2011) 'Middle class welfare in Australia: how has the distribution of cash benefits changed since the 1980s?', Australian Journal of Labour Economics, 14 (2), 81-102.


(1.) This paper is part of a research project funded by Australia Research Council Discovery Grant DP140102571: Material Well-Being in the Australian Welfare State and we gratefully acknowledge the ARC'S support.

(2.) In the Tables and Figures that follow all dollar figures have been adjusted for inflation, using 2010 as the base year. The figures shown are the mean for the sample of the household type. Taxation figures are not actual reported figures but are imputed from standard tax rates. For some cautions about using ABS figures to make comparisons across time, see ABS 2001, 53-5. For discussion supporting the reliability of such comparisons, see Greenville et al. 2013, 117-22.

(3.) The point about no net assistance to families with children was first noticed in Castles 1987; see also Tapper 1990.

(4.) These unexpected findings call for a more fine-grained analysis. We hope to make this the subject of a future paper.

(5.) In an earlier paper (Tapper et al. 2013, Figure One and Table Six), we failed to correct for this change in the ABS's definition of income between 2003-04 and 2009-10. Consequently, we overstated the gains made by the elderly in their final incomes between those years. In that paper we said that 'Rapid gains to the elderly in this period have brought them close to the EFI for all households. The gap in 2003-04 stood at about 21 per cent (based on an estimate that the EFI for all elderly households was about 505). In 2009-10 it had fallen to only about five or six per cent (estimating that the elderly EFI was about 960)'. Both the 2003-04 figure (21 per cent) and the 2009-10 figure (five or six per cent) are correct, but there was no 'rapid change' here, just a change in the measurement base. The inclusion of imputed rent in income had relatively little effect on the incomes of younger age groups.

Table 1: Trends in family payments and tax benefits (2010
dollars per household per week)

                                          1984   1988   1993   1998
                                                 -89    -94    -99

Sole parents        Sole parent benefit   215    191    162
                    Family allowance       31     21    106
                    Family payments                            272
                    Family tax benefits
                    Parenting payments
Total sole parent                         246    212    268    272
  family payments
Couple families     Family allowance       37     29     61
                    Family payments                             78
                    Family tax benefits
                    Parenting payments
Total couple                               37     30     61     78
  family payments
Total all                                  60     55     98    114
  family payments

                                          2003   2009   1984 to
                                          -04    -10    2009-10

Sole parents        Sole parent benefit
                    Family allowance
                    Family payments
                    Family tax benefits   161    173
                    Parenting payments    141    107
Total sole parent                         301    280       +34
  family payments
Couple families     Family allowance
                    Family payments
                    Family tax benefits    79     83
                    Parenting payments     17      8
Total couple                               97     91       +54
  family payments
Total all                                 137    127       +67
  family payments

Source: ABS Cat No 3570.0 and calculations therefrom.

Table 2: Trends in overall family spending and taxing (2010
dollars per household per week)

                                            1984   1988   1993   1998
                                                   -89    -94    -99

Total benefits in    Sole parent families   570    542    643    699
  cash and kind
                     Couple families        386    354    431    528
Total taxes direct   Sole parent families   121    123    111    133
  and indirect
                     Couple families        405    470    403    498
Net benefits in      Sole parent families   449    419    532    566
  cash and kind
                     Couple families        -19    -116    28     30
Net benefits for                             32    -42    117    104
  all families

                                            2003   2009   1984 to
                                            -04    -10    2009-10

Total benefits in    Sole parent families   813    961      +391
  cash and kind
                     Couple families        602    691      +305
Total taxes direct   Sole parent families   243    229      +108
  and indirect
                     Couple families        625    689      +284
Net benefits in      Sole parent families   570    732      +283
  cash and kind
                     Couple families        -22      2       +21
Net benefits for                             94    141      +109
  all families

Source: ABS Cat No 3570.0 and calculations therefrom. 'In kind
benefits' are mainly expenditure on education and health. 'Education
benefits' are defined by the ABS as 'social transfers in kind derived
from government expenses relating to the provision of school, tertiary
and other education'. 'Health benefits' are defined as 'social
transfers in kind derived from government expenses relating to acute
care institutions, community health services, pharmaceuticals and
other health benefits'.

Table 3: Dependency on government pensions and allowances by age
and family type (%)

                  1984  1988-89  1993-94  1998-99  2003-04  2009-10

Sole parents
with dependent
children only      68     59       64       62       54       51

Couple families
with dependent
children only      9       7       12       10        8        6

Persons 65
and over           72     69       72       67       69       61

All households     26     24       29       27       27       23

Source: ABS Cat No 3570.0 and calculations therefrom.

Table 4: Equivalent final household incomes by age and family
type, 2009-10 (in 2010 dollars)

                        Excluding       Including
                       net imputed     net imputed
                       housing rent   housing rent

Sole parents with
dependent children         778             805

Couple families with
dependent children         1012           1037

Households 65
and over                   787        960 (approx.)

All households             928            1012

Source: ABS Cat No 3570.0 and calculations therefrom, and figures
supplied by the ABS. EFI for households aged 65-74 is 939 (making up
55 per cent of elderly households and 58 per cent of elderly persons);
for households 75 and over it is 1006 (45 per cent and 42 per cent

Table 5: Household net worth by age and family type, 2009-10
(in 2010 dollars)

                  parent     Couple     Aged     Aged 75       All
                 families   families    65-74    and over   households

Mean net worth   245,014    824,169    950,959   764,561     729,442
Household size     3.1        4.1        1.8       1.6         2.6
  net worth      139,212    406,997    709,671   604,396     453,070

Source: ABS Cat No 3570.0 and calculations therefrom. Net worth is
defined by the ABS as the value of a household's assets less the value
of its liabilities. Assets include dwellings and their contents,
vehicles, and machinery and equipment used in businesses owned by
households; intangible fixed assets such as computer software and
artistic originals; business inventories of goods; non-produced assets
such as land; and financial assets such as bank deposits, shares,
superannuation account balances, and the outstanding value of loans
made to other households or businesses. Liabilities include credit
card debt; mortgages; investment loans; borrowings from other
households; and debt on other loans such as personal loans to purchase
vehicles, and study loans.
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Article Details
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Author:Tapper, Alan; Fenna, Alan; Phillimore, John
Publication:Australian Journal of Social Issues
Article Type:Report
Geographic Code:8AUST
Date:Dec 22, 2014
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