Australia

   

Social Policies

#15
Key Findings
With cost-of-living issues a rising concern, Australia falls into the upper-middle ranks with regard to social policy (rank 15). Its score in this area has declined by 0.3 points relative to 2014.

Integration policy has a long and generally successful history, although a surge in temporary migration – somewhat diminished in recent years – has raised integration concerns. The navy actively prevents vessels containing asylum seekers from reaching Australian shores, and the indigenous population remains badly marginalized.

The government strongly subsidizes private schools, increasing inequity. University fees have increased and direct government funding has been cut, but poor students still have access. Public pensions are comparatively small, but deprivation rates are low, particularly for those who own their own homes. A shift toward private pensions is underway.

The health care system is generally of high quality, though waiting periods can be long. Total health care expenditure is relatively low. Despite the introduction of taxpayer-funded subsidies for child care, real costs have risen steadily for parents. A new fund is financing innovative trial projects for groups deemed to be at risk of long-term welfare dependency.

Education

#23

To what extent does education policy deliver high-quality, equitable and efficient education and training?

10
 9

Education policy fully achieves the criteria.
 8
 7
 6


Education policy largely achieves the criteria.
 5
 4
 3


Education policy partially achieves the criteria.
 2
 1

Education policy does not achieve the criteria at all.
Education Policy
6
The quality of Australia’s education system tends to be higher in non-government schools and in major metropolitan regions. Overall the high school completion rate is around 80%. However, the low level of preschool spending continues to be a weak point: Australia spends one-quarter of the OECD average on preschools and the country has been falling down the PISA rankings among countries in its region.

Regarding equity, the continued high level of government subsidies to non-government schools means inequity in schooling outcomes is high. Unsurprisingly, given the high levels of government subsidy of private education, rates of enrollment in private schools in Australia are significantly higher than the OECD average. Despite subsidies, tuition fees at private school are often beyond the means of less affluent parents, creating inequality. Moreover, inequity has increased, as government funding per student in non-government schools has increased at a faster rate than government funding per student in government schools. The 2017 budget took steps toward reducing inequity, boosting funding to government schools and reducing funding to some non-government schools in the period 2017 - 2027. However, following a backlash from the Catholic school sector, which accounts for approximately half the non-government school sector, in September 2018 the government announced an increase in funding to Catholic schools of AUD 4.5 billion over 10 years.

In the higher education sector, the Higher Education Loan Program (HELP), introduced in 1989, continues to be an important mechanism for equitably and sustainably funding higher education. The scheme has increased the extent to which students bear the cost of their education without diminishing access to higher education for students from poor families. Several measures in recent years have sought to reduce the cost to government of the higher education system. The 2015 budget contained measures requiring Australians living overseas to repay HELP debts on the same terms as those faced by Australian residents. This took effect on 1 January 2016. Additional measures in 2017 included decreased direct government funding of universities, increased student fees and a reduced income threshold at which students begin repaying their HELP debt.

With regard to efficiency, there is much room for improvement. Australia’s educational system is complex, with shared responsibilities between the states and the government, with funding coming primarily from the latter, which contributes to inefficiencies. Federal funding for vocational education and training is limited. State and territory governments are highly revenue-constrained, and as a consequence the sector is relatively poorly funded. In recent years, a HELP scheme for vocational training, called VET Student Loans, has been established, but applies only to diploma-level courses. The higher education sector is generally efficient and universities have had to be entrepreneurial to prosper, aggressively marketing to international students and pursuing independent sources of research funds.

Citations:
David Gonski, ‘Final Report of the Review of Funding for Schooling,’ December 2011: http://www.betterschools.gov.au/review

Moshe Justman and Chris Ryan, ‘What’s Wrong with the Gonski Report: Funding Reform and Student Achievement?’ Policy Brief No. 2/13. Melbourne Institute. The University of Melbourne. April 2013: http://www.melbourneinstitute.com/downloads/policy_briefs_series/pb201 3n02.pdf

http://studyassist.gov.au/sites/StudyAssist/VET%20Student%20Loans

http://www.oecd.org/edu/EDUCATION%20POLICY%20OUTLOOK%20AUSTRALIA_EN.pdf

https://www.oecd-ilibrary.org/education/education-at-a-glance-2018_eag-2018-en

Lisa Pryor, The End of the Australian Dream. The New York Times. 2. May 2017. p. 1, 13.

Social Inclusion

#26

To what extent does social policy prevent exclusion and decoupling from society?

10
 9

Policies very effectively enable societal inclusion and ensure equal opportunities.
 8
 7
 6


For the most part, policies enable societal inclusion effectively and ensure equal opportunities.
 5
 4
 3


For the most part, policies fail to prevent societal exclusion effectively and ensure equal opportunities.
 2
 1

Policies exacerbate unequal opportunities and exclusion from society.
Social Inclusion Policy
5
Australia has a mixed record on social inclusion. While successive governments have made considerable efforts to promote social policies that reduce social exclusion, the comparatively flexible labor market has probably been the most effective instrument with regard to ensuring social inclusion.

Despite a relatively unequal income distribution and other weaknesses of social policies, Australians are quite content with their lives. Life satisfaction in Australia is higher than in many other OECD countries and almost as high as in the Scandinavian countries.

Promoting social inclusion did not become an explicit policy goal at the federal level until the election of the Labor government in 2007. After coming into office in 2013, the conservative Abbott government reversed course and removed all references to social inclusion from policy documents. While Prime Minister Abbott did take personal responsibility for indigenous affairs, the dire situation of the indigenous population continues to be one of Australia’s most pressing social issues. Life expectancy of indigenous Australians is approximately ten years lower than the Australian average.

In December 2013, the minister for social services commissioned a review of the welfare system with the goal of identifying possible improvements and ensuring the system was sustainable, effective, coherent and encouraged people to work. The review recommended the adoption of an “investment approach” within Australia’s social support system, which in turn would ideally reduce long-term reliance on welfare through targeted investments in benefit recipients. In response, in 2015 the government instituted the “Australian Priority Investment Approach to Welfare.” To date, the main tangible outcome of this approach has been the AUD 96.1 million “Try, Test and Learn Fund,” which is currently trialing new or innovative approaches to assist priority groups identified through data analysis as being at high risk of long-term welfare dependency.

Citations:
Australian Institute of Health and Welfare: Mortality and life expectancy of Indigenous Australians 2008 to 2012. http://www.aihw.gov.au/publication-detail/?id=60129548470&tab=2.

Reference Group on Welfare Reform, ‘A New System for Better Employment and Social Outcomes.’ Australian Government. February 2015: https://www.dss.gov.au/our-responsibilities/review-of-australias-welfare-system/a-new-system-for-better-employment-and-social-outcomes-full-version-of-the-final-report.

http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Table_1_Youth_unemployment,_2014Q4_%28%25%29.png

https://www.dpmc.gov.au/sites/default/files/publications/indigenous/Health-Performance-Framework-2014/tier-1-health-status-and-outcomes/120-infant-and-child-mortality.html

https://www.dpmc.gov.au/sites/default/files/publications/indigenous/Health-Performance-Framework-2014/tier-1-health-status-and-outcomes/119-life-expectancy-birth.html

Health

#14

To what extent do health care policies provide high-quality, inclusive and cost-efficient health care?

10
 9

Health care policy achieves the criteria fully.
 8
 7
 6


Health care policy achieves the criteria largely.
 5
 4
 3


Health care policy achieves the criteria partly.
 2
 1

Health care policy does not achieve the criteria at all.
Health Policy
7
The Australian health care system is a complex mix of public and private sector health care provision and funding. Correspondingly, its performance on quality, inclusiveness and cost efficiency is variable across the components of the system. The federal government directly funds health care through three schemes: Medicare, which subsidies services provided by doctors; the Pharmaceutical Benefits Scheme (PBS), which subsidizes prescription medications; and a means-tested private health insurance subsidy. Medicare is the most important pillar in delivering affordable health care to the entire population, but it has design features that decrease efficiency and fail to promote equity of access. For example, the level of the subsidy is generally not contingent on the price charged by the doctor. The PBS is perhaps the most successful pillar of health care policy in Australia, granting the Australian community access to medications at a low unit cost.

Quality of medical care in Australia is in general of a high standard, reflecting a highly skilled workforce and a strong tradition of rigorous and high-quality doctor training in public hospitals. However, several medical procedures are difficult to access for people without private health insurance. In particular, waiting periods for non-emergency operations in public hospitals can be many years. Public funding of dental care is also very limited and private dental care can be prohibitively expensive for those on low incomes without private health insurance. Consequently, dental health care for low income groups is poor.

Regarding inclusiveness, significant inequality persists in access to some medical services, such as non-emergency surgery and dental care. Indigenous health outcomes are particularly poor. In 2014, the federal government launched a dental scheme aimed at addressing inequity in access to dental care, but the current coalition government has withdrawn support for the scheme. Lack of access to non-emergency surgery reflects, to a significant extent, the funding constraints of the states and territories, which are responsible for funding public hospitals. This was a significant motivation behind the 2011 National Health Reform Agreement, which sought to provide more sustainable funding arrangements for Australia’s health system. Key features of the agreement included: additional federal funding for hospitals from 2015 to 2020 and for non-emergency surgery from 2010 to 2016; the establishment of an independent hospital pricing authority to set a national efficient price for hospital services and a national health performance authority to review hospital performance. However, in its first budget in 2014, the Abbott government reduced hospital funding and implemented a freeze on the indexation of subsidies for out-of-hospital medical services until 2018. This freeze was partially removed by the Turnbull government in July 2017.

Finally, concerning cost-effectiveness, the health care system is rife with inefficiencies and perverse incentives. Total health care expenditure is relatively low, but as is the case in most developed countries, the government faces significant challenges due to rising costs from an aging population and development of new diagnostic tools and treatments. The government’s Productivity Commission made a number of recommendations to improve cost-effectiveness, including eliminating low-value health interventions, adopting the principle of patient-centered care, and making better use of health system data.

Citations:
National Health Reform Agreement 2011: http://www.yourhealth.gov.au/internet/yourhealth/publishing.nsf/Content/nhra-agreement/$File/National%20Health%20Reform%20Agreement.pdf

Productivity Commission five-year productivity review: https://www.pc.gov.au/inquiries/completed/productivity-review/report

Sunil K. Dixit; Murali Samasivan: A review of the Australian health care system: A policy perspective, Sage Med, April 2018, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5900819/

Families

#18

To what extent do family support policies enable women to combine parenting with participation in the labor market?

10
 9

Family support policies effectively enable women to combine parenting with employment.
 8
 7
 6


Family support policies provide some support for women who want to combine parenting and employment.
 5
 4
 3


Family support policies provide only few opportunities for women who want to combine parenting and employment.
 2
 1

Family support policies force most women to opt for either parenting or employment.
Family Policy
7
The high cost of child care for children not yet at school continues to be a problem for many families in Australia. However, in the 2015 budget, the government announced a plan to spend AUD 3.5 billion over five years on child care assistance, including a new child care subsidy (CCS) that commenced on 1 July 2018. Replacing several existing subsidy programs, the CCS is a single subsidy based on family income. Families earning AUD 66,958 or less receive a subsidy of 85% of their child care fees. The subsidy rate gradually declines as family income increases and is zero for families with incomes in excess of AUD 351,248. For families with incomes in excess of AUD 186,958, there is an annual cap on the subsidy of AUD 10,190 per child. Eligibility for the CCS is determined by an activity test that closely aligns the hours of subsidized care with the amount of work, training, study or any other recognized activity such as volunteering by parents. Despite taxpayer-funded subsidies for child care, costs have risen for parents, growing by 48.7% in real terms (or 6.8% annually) from 2011 to 2017.

Following large increases in family payments over the early 2000s, in recent years these payments have been scaled back. In 2014, the “baby bonus,” a tax-free payment of up to AUD 5,000 payable on birth or adoption of a child, was abolished. In 2016, the government managed to pass some reductions to family payments through the Senate, including reducing payments to families where the youngest child is between the ages of 13 and 18, and to families with a household income over AUD 80,000 per year. Additional minor reductions in family payments were announced in the 2017 budget.

A government-funded paid parental leave (PPL) scheme was introduced on 1 January 2011, providing 18 weeks of government-funded paid leave at the level of the full-time national minimum wage. Prior to the scheme, only 54% of female employees and 50% of male employees had access to some form of PPL. The scheme therefore considerably expanded access to PPL.

Welfare policy has increasingly encouraged or compelled mothers who are welfare recipients to take up employment. Starting in July 2006, new single-parent recipients were transferred to the unemployment benefit once the youngest child reached eight years of age. In January 2013, this policy was applied to all recipients of Parenting Payment irrespective of when they began receiving it; in the case of partnered recipients of Parenting Payment, transfer to the unemployment benefit occurs once the youngest child reaches six years of age. With unemployment benefits, single parents receive a lower level of benefits and are required to seek employment of at least 15 hours per week.

Citations:
OECD, Economic Survey Australia 2014, p. 61 and 69.

http://www.smh.com.au/national/health/little-support-for-parents-of-austistic-kids-20161020-gs6vov.html

Eugenie Joseph: Why childcare is not affordable, The Centre for Independent Studies. August 2018. Available at https://www.cis.org.au/app/uploads/2018/08/rr37.pdf

Pensions

#15

To what extent does pension policy realize goals of poverty prevention, intergenerational equity and fiscal sustainability?

10
 9

Pension policy achieves the objectives fully.
 8
 7
 6


Pension policy achieves the objectives largely.
 5
 4
 3


Pension policy achieves the objectives partly.
 2
 1

Pension policy does not achieve the objectives at all.
Pension Policy
8
Australia has two explicit pension systems, the public age pension and private employment-related pensions. The public age pension is funded from general taxation revenue, and because it is means-tested, it effectively acts as a social safety net. Pensioners enjoy additional benefits such as access to universal health care, concessions on pharmaceutical and other government services, and tax concessions.

Currently, the public age pension is still the dominant source of income for retirees. Approximately 70% of pensioners receive a means-tested pension from the government. About 41% of pensioners receive a reduced government pension due to their own assets. The result is that Australian pensioners’ income is the second lowest in the OECD compared to the income of the working population. Measured income poverty of pensioners replying on public age pensions is therefore relatively high. However, over 80% of pensioners own their home. This, combined with the large expenditure subsidies they receive, means that broader poverty measures that take wealth and expenditure subsidies into account show low rates of deprivation among this group. In some cases, pensioners without their own home are forced to retire to rural Australia in order to find affordable housing. A few even migrate abroad.

Over time the balance will shift toward the private pension system, which was only introduced on a large scale in 1992, and reached a minimum contribution rate of 9% of earnings only in 2002. The minimum contribution rate increased to 9.5% on 1 July 2014 and was scheduled to increase by a further 0.5% per year until it reached 12% on 1 July 2019. However, in 2014 the Abbott government deferred further increases until 1 July 2021. Contributions to private pensions are concessionally taxed at a flat rate of 15%, and private pension income in retirement is largely tax exempt.

Population aging has increased anticipated pressures on the pension system. In response, the government indicated in its 2009 - 2010 budget that it would progressively increase the age of eligibility for the public age pension from 65 to 67 years (by July 2023).

In terms of intergenerational inequity, the gradual nature of the shift since 1992 from a pay-as-you-go public pension toward a private pension system supplemented by a public pension has meant that relatively little inequity has resulted between generations.

Lastly, concerning the fiscal sustainability of the pension system, while reliance on the public age pension will continue to be high for many years, in broad terms the pension system is relatively sustainable, with private pensions increasingly taking on more of the financial burden. Concerns have been raised, however, about the sustainability and equity of maintaining the tax-free status of private retirement income. The current absence of significant constraints on how private pension assets are used is also of concern, with some evidence that retirees run down private pension holdings too quickly and become reliant on the public age pension.

Citations:
OECD, Pensions at a glance. Paris, OECD 2013. p. 68 - 70.

OECD, Pensions at a glance, Pris, OECD 2015. p. 207 - 211. http://www.keepeek.com/Digital-Asset-Management/oecd/social-issues-migration-health/pensions-at-a-glance-2015_pension_glance-2015-en#page209

Lisa Pryor, The End of the Australian Dream. The New York Times. 2 May 2017. p. 1, 13.

Eden Gillespie: The pensioners retiring overseas because they can’t afford Australia, ABC News, 16 May 2018, available at https://www.abc.net.au/news/2018-05-16/pensioners-retiring-overseas-because-they-cant-afford-australia/9762418

Integration

#4

How effectively do policies support the integration of migrants into society?

10
 9

Cultural, education and social policies effectively support the integration of migrants into society.
 8
 7
 6


Cultural, education and social policies seek to integrate migrants into society, but have failed to do so effectively.
 5
 4
 3


Cultural, education and social policies do not focus on integrating migrants into society.
 2
 1

Cultural, education and social policies segregate migrant communities from the majority society.
Integration Policy
8
Relative to its population size, Australia has maintained one of the largest immigration programs of any established democracy in the post-World War II era. Over one-fifth of the population is foreign-born. Successful integration of immigrants has therefore been a policy priority for much of Australia’s history. In general, Australia has and continues to be highly successful in integrating immigrants. The most important contributor to this success has been a highly selective immigration policy. Most migrants are selected on the basis of their skills and English language ability. Post-migration, explicit integration efforts primarily consist of encouraging immigrants to apply for citizenship. The combination of a steadily growing economy and the exclusion of migrants from welfare payments in the first two years after their arrival has meant most migrants find employment. Australia is more successful than most OECD countries regarding the integration of migrants into the labor market. The effect has been a swift integration into Australian society. The selection of migrants and limited access to welfare payments, combined with a cosmopolitan society, have demonstrated above average success.

However, concerns have arisen in recent years about the large number of temporary skilled immigrants, many from island states in the South Pacific. Historically, immigration in Australia has been conceived as permanent resettlement, and the phenomenon of large numbers of temporary immigrants is relatively new, only taking on significant proportions this century. Granting of temporary migrant visas peaked around 2014, when more than 100,000 visas were issued. By its nature, the temporary-immigration program is not geared toward long-term integration of immigrants, creating some potential for breakdown in social cohesion. However, in the last several years, the government has introduced regulations and fees which have reduced the number of temporary visas issued.

Despite Australia’s relatively open immigration policy, an ongoing concern relates to asylum-seekers who have arrived, usually on boats from Southeast Asia. Mandatory detention was introduced for asylum-seekers in the 1990s, and offshore processing of asylum-seekers was reinstated in 2012. Following the 2013 election, the coalition introduced Operation Sovereign Borders, under which the Australian navy prevents all vessels containing asylum-seekers from reaching Australia. While politically very controversial, the policy appears to have been effective in dramatically reducing the number of asylum-seekers attempting to arrive by boat. Tight control of Australia’s borders arguably strengthens the political support for continued high levels of skilled and business immigration.

Citations:
http://www.smh.com.au/federal-politics/political-news/asylum-seeker-boat-turnbacks-supported-by-71-per-cent-in-poll-20140603-39h2a.html

https://www.justlanded.com/english/Australia/Australia-Guide/Jobs/Unemployment-Benefit

http://www.theaustralian.com.au/national-affairs/immigration/dramatic-decrease-in-asylumseeker-deaths/news-story/0967f643c9a38e09d36d0ad1c28c8a54

Safe Living

#6

How effectively does internal security policy protect citizens against security risks?

10
 9

Internal security policy protects citizens against security risks very effectively.
 8
 7
 6


Internal security policy protects citizens against security risks more or less effectively.
 5
 4
 3


Internal security policy does not effectively protect citizens against security risks.
 2
 1

Internal security policy exacerbates the security risks.
Internal Security Policy
8
Internal security is primarily the responsibility of the states and there is correspondingly some variation in policies and outcomes across them. In most states crime rates are relatively low. Coordination between various policing, enforcement and intelligence-gathering authorities is generally satisfactory.

Responsibility for internal security at the national level rests with the Australian federal police and the Australian security intelligence organization; the latter has no powers of arrest and relies on the police for support. Both rely on the criminal law for prosecutions, as well as on the Anti-Terrorism Act 2005. International organized crime that is not terrorism-related is investigated by the Australian crime commission.

In 2015, the coalition government introduced several measures aimed at countering terrorism and improving national security more generally. Most significant was the Telecommunications (Interception and Access) Amendment (Data Retention) Act 2015, allowing increased surveillance of electronic communications and imposing requirements on internet service providers to retain data for minimum periods. The act was opposed by groups concerned that it unduly infringes on civil liberties, as well as by telecommunications providers, who argued it would impose substantial costs on them. In 2016, the Australian Citizenship Amendment (Allegiance to Australia) was passed, which grants the government explicit powers to revoke Australian citizenship of dual citizens convicted of engaging in terrorist-related activities.

Violent crime has decreased in Australia, but the situation has improved more for men than for women. Most female murder victims die at the hands of their male partners and family violence remains a big issue in Australian society.

In July 2017, the prime minister announced that the government would establish a home affairs portfolio that will bring together Australia’s immigration, border protection, law enforcement and domestic security agencies in a single portfolio. The new portfolio will be more similar to the UK model than the U.S. model – a federation of border and security agencies under which the various agencies retain statutory independence.

Citations:
http://www.smh.com.au/comment/martin-place-cafe-siege-overreaction-from-fear-is-a-measure-of-a-terrorists-success-20141215-127rih.html

http://www.smh.com.au/nsw/nsw-crime-statistics-12-major-crime-types-fall-to-their-lowest-in-20-years-20160905-gr921b.html

https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1718/Quick_Guides/HomeAffairs

Caitlin Fitzsimmons: Australia is safer than it used to be but family violence persists. Sydney Morning Herald. 21 July 2018. Available at https://www.smh.com.au/lifestyle/life-and-relationships/australia-is-safer-than-it-used-to-be-but-family-violence-persists-20180720-p4zsqy.html

http://www.abc.net.au/news/2016-04-06/fact-file-domestic-violence-statistics/7147938

https://www.psychologytoday.com/us/blog/talking-about-trauma/201806/domestic-abuse-linked-financial-crisis

Global Inequalities

#19

To what extent does the government demonstrate an active and coherent commitment to promoting equal socioeconomic opportunities in developing countries?

10
 9

The government actively and coherently engages in international efforts to promote equal socioeconomic opportunities in developing countries. It frequently demonstrates initiative and responsibility, and acts as an agenda-setter.
 8
 7
 6


The government actively engages in international efforts to promote equal socioeconomic opportunities in developing countries. However, some of its measures or policies lack coherence.
 5
 4
 3


The government shows limited engagement in international efforts to promote equal socioeconomic opportunities in developing countries. Many of its measures or policies lack coherence.
 2
 1

The government does not contribute (and often undermines) efforts to promote equal socioeconomic opportunities in developing countries.
Global Social Policy
6
Australia plays a significant role in the region with regard to promoting economic development and poverty alleviation in less developed countries, particularly in the Pacific. Australia is also a strong advocate of trade liberalization, especially in relation to agricultural products, which is critically important to economic development in most developing countries.

However, the 2014 government budget included cuts to foreign aid of AUD 7.6 billion over five years, which arguably represents a backward step in promoting economic opportunities in developing countries.

Since 2017, the increasingly aggressive foreign policy of China has resulted in an expansion of Australia’s regional aid programs.

Due to its status as a middle power, Australia lacks leverage on some issues. It has been unable to provide a major impetus to further develop the multilateral trading system, for example. Australian governments have supported the multilateral trading system rhetorically, but have at the same time contributed to the weakening of the WTO by implementing a number of preferential trade agreements. Australia has concluded free trade agreements (FTAs) with all major economies in Asia (ASEAN, South Korea, China and Japan).

Citations:
http://www.dfat.gov.au/fta/

Rod McGuirck: Australia details investment in Pacific as China clout grows. AP News. 8 November 2018. Available at https://www.apnews.com/cf3404ef6f4b404197e83066179aa4f4
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