NO.085

RELEASE OF THE AUSTRALIA FAIR REPORT – 2007

The Australia Fair 2007 report released today highlights Australia’s strong performance in a number of areas including life expectancy, home ownership and economic growth.

Claims made about poverty fail to take into account the significant social benefits received by households such as the range of education, housing and health services provided by government and the differences in services and concessions between countries.

In comparing other countries to Australia, the report fails to take into account the very high and often highly regressive indirect tax regimes in many other countries.

A comprehensive measure of people’s well-being is contained in the study of Government Benefits, Taxes and Household Incomes released by the Australian Bureau of Statistics (ABS) this year.

The ABS study covers private incomes, government cash benefits, income tax, indirect tax and the value of non-cash benefits (such as health and education).

This shows that Australia became a more prosperous and fairer society over the five year period. 

The study also shows that there is more redistribution to the bottom three quintiles of households in 2003-04 than there was in 1998-99.

One of the main determinants of poverty is joblessness, while the Australia Fair report notes that Australia has a relatively high rate of part time work. It suggests that temporary jobs can trap workers in employment and earnings insecurity.

This is not borne out by the facts.

Since 1996, around 2.2 million jobs have been created and the unemployment rate was 4.3 per cent in July 2007, around the lowest levels seen in 32 years. 

For some groups of workers, such as for long-term unemployed persons, part time or temporary work may provide a ‘stepping stone’ to full labour market engagement and alleviate the loss of skills and motivation that often accompanies complete inactivity.

The Productivity Commission 2006 report “The Role of Non-Traditional Work in the Australian Labour Market” support this ‘stepping stone hypothesis’; that is, that casual or other irregular work is often a useful precursor to ongoing employment. 

In addition, real wages have increased by 20.8 per cent. This compares with the 1.8 per cent decline in real wages recorded over the whole 13 year term of the previous Labor Government. 

The report also highlights Australia’s spending on education relative to other OECD countries.

Looking at each individual sector of Australia’s education system, Australia’s spending is above the OECD average in a number of areas.

For all primary, secondary and post-secondary non-tertiary education, Australia’s expenditure from both private and public sources was 4.1 per cent of GDP. The OECD average was 3.9 per cent of GDP.

For all tertiary education, Australia’s expenditure from both public and private sources was 1.5 per cent of GDP. The OECD average was 1.4 per cent of GDP.

For pre-primary education, Australia is below the OECD average. Australia’s expenditure from both public and private sources was 0.1 per cent of GDP. The OECD average was 0.5 per cent of GDP.

Pre-primary education is the responsibility of state and territory governments.

The Australian Government also provides significant assistance to families and children.

Australian Government assistance for child care in 2007-08 will be $3 billion, nearly three times the level in 1996-97.

The Australian Government has also more than doubled assistance to families from around $14 billion in 1996‑97 to almost $30 billion in 2007-08. 

A key Australian Government initiative in the area of early childhood is the Stronger Families and Communities Strategy which is working toward giving families, their children and communities the opportunity to build a better future. Funding of $490 million has been committed for this programme from 2004-2009.

The economy is in the midst of its longest period of continuous growth since Federation and GDP in the year to March 2007 was over $1 trillion. 

Record jobs and income growth have allowed all Australian families to share in the benefits of a strong economy and feel confident in their current and future prospects.

MELBOURNE

30 August 2007

Contact: David Gazard – 02 6277 7340