Australia

   

Social Policies

#16
Key Findings
With cost-of-living issues a rising concern, Australia falls into the upper-middle ranks with regard to social policy (rank 16). Its score in this area has declined by 0.3 points relative to 2014.

Integration policy has a long and successful, though selective, history. A program for high-skilled temporary migrants has been cut back, and the navy today prevents vessels containing asylum seekers from reaching Australian shores. The indigenous population remains badly marginalized. A new Home Affairs portfolio will combine immigration, border protection, law enforcement and domestic security agencies.

The government strongly subsidizes private schools, increasing inequity. Very high housing costs force many parents to choose between buying a home or investing in their children’s education. University fees have increased, but poor students still have access. Public pensions are comparatively small, but deprivation rates are low. A shift toward private pensions is underway.

The health care system is generally of high quality, though waiting periods can be long. A freeze on non-hospital medical-services subsides has been partially lifted. A long-delayed child-are subsidy was slated to take effect in July 2018, but other family payments have been reduced.

Education

#20

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 currently around 80%. However, the low level of preschool spending continues to be a weak point: Australia spends only one-quarter of the OECD average on preschools and the country has been falling down the PISA rankings among countries in its region.

In combination with the poor availability of affordable housing, young families are facing a stark choice. They can either buy a house and send their children to a below average public school. Or they invest in their children’s education, which makes buying a family home nearly impossible.

Regarding equity, the continued high level of government subsidies to non-government schools means inequity in schooling outcomes is high. The level of private funding in Australia is significantly higher than the OECD average. Less affluent parents cannot afford to send their children to private schools, which creates 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 did, however, take steps toward reducing inequity, boosting funding to government schools and reducing funding to some non-government schools in the period of 2017 to 2027.

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. The 2017 budget additionally increased government direct funding of universities, increased student fees and reduced the income threshold at which students begin repaying their HELP debt.

Finally, with regard to efficiency, there is much room for improvement. Australia’s educational system is complex, with shared responsibilities between the states and the Commonwealth, and with funding coming mainly from the Commonwealth, 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 only applies 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

Lisa Pryor, The End of the Australian Dream, The New York Times, 2. Mai 2017, S. 1 und 13.

Social Inclusion

#22

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 continues to have a mixed record of 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 relatively uneven 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 biggest social issues. Life expectancy of indigenous Australians is about ten years below 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 and coherent and encouraged people to work. The final report of the Reference Group, released in February 2015, advocated streamlining payments into five primary benefits for the working-age population, reducing effective marginal tax rates on welfare recipients in order to encourage employment participation, and adopting 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. The government broadly accepted the recommendations, but as of the end of the review period, few had been implemented.

A key issue in social policy has been the booming housing market. Families in particular are increasingly unable to live in urban areas and are forced to move to relatively remote places. Sydney in particular is too expensive for most young families. This begins having an effect on economic efficiency, as young talent is no longer moving to Sydney.

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

Sydney ‘doesn’t stack up‘ without high salary, while young talent pool grows in Melbourne, domain.com, 12. Juli 2017, im Internet unter https://www.domain.com.au/news/sydney-doesnt-stack-up-without-high-salary-melbourne-tempts-new-residents-20170712-gx7vt9/

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

#9

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-sector 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 do not 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 persons 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 low-income persons 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 wound back 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 for more sustainable funding arrangements for Australia’s health system. Key features of the agreement include additional federal funding for hospitals from 2015 to 2020 and for non-emergency surgery from 2010 to 2016, and 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 indexaton of subsidies for out-of-hospital medical services until 2018. However, this freeze was partially removed by the Turnbull government as of 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.

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

Families

#21

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). Initially intended to begin on 1 July 2017, it is now planned for 1 July 2018. Replacing several existing subsidy programs, the CCS is a single subsidy based on family income. Families earning around AUD 65,000 or less will receive a subsidy of 85% of their child care fees, with the subsidy gradually tapering to 50% for families earning around AUD 170,000 or more. Families earning more than AUD 185,000 per year will have an annual cap of AUD 10,000 on the total amount of assistance provided per child. Eligibility for the CCS will be 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.

Following large increases in family payments over the early 2000s, in recent years there has been some dialing back of these payments. 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 in 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. 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. However, the Turnbull government is seeking to tighten access to the scheme by limiting access to individuals whose employer does not provide parental-leave entitlements. In cases where individuals are given less generous parental-leave entitlements from their employer, the government will top up the amount paid until it is equal to the full amount available under the existing scheme.

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

Pensions

#17

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 age pension is funded from general taxation revenue, and because it is means-tested, it effectively acts as a social safety net. Pensioners also enjoy additional benefits such as access to universal health care, concessions on pharmaceutical and other government services, and tax concessions.

Currently, the 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 age pensioners 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.

Over time the balance will shift to the private pension system, which was only introduced on a wide 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 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 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 age pension will continue to be high for many years into the future, 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 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. Mai 2017, S. 1 und 13.

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 enabled most migrants to find employment. The effect has been a swift integration into Australian society. 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. Until recently, more than 100,000 temporary skilled worker visas were issued annually. 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 three years, and particularly in 2017, 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 have been 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.

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

#11

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.
Safe Living Conditions
8
Internal security is largely the responsibility of the states and there is correspondingly some variation in policies and outcomes across the states, but in most states crime rates are in fact relatively low. Coordination between various policing, enforcement and intelligence-gathering authorities is generally satisfactory.

While Australians enjoy relatively safe public spaces, domestic violence is a growing concern. Both homicide and physical violence are high, and police are increasingly called to intervene. Furthermore, indigenous Australian women’s risk of domestic violence is 35 times higher than that for non-indigenous Australian women.

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.

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

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

Global Inequalities

#18

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 7.6 billion AUD over five years, which arguably represents a backward step in promoting economic opportunities in developing countries.

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/
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