Opinion article

Let's learn from the pandemic and choose to reduce child poverty in Australia

Rising levels of child poverty in Australia are not inevitable, write Anti-Poverty Week’s Toni Wren and Accenture’s Dr Andrew Charlton.

Prior to the pandemic, it was a source of shame that one in six Australian children were growing up in poverty - an average of five in a classroom of 30. Anti-Poverty Week estimates that this has increased to one in five in June 2021, as 940,000 children are living in families reliant on the lowest social security payments. It also correlates with the shocking figures revealed in Foodbank Australia’s 2021 Hunger Report that more than a million children went hungry during the last year.

Our housing policies don’t ensure they are protected from living in a car; sharing accommodation with extended family members or friends; and moving regularly, losing friends and necessitating changes of school.

Our threadbare social security net doesn’t protect them from poverty when their parent loses their job, gets sick or the relationship breaks down. It locks them into it. 

Our broken child support system doesn’t ensure children have as close as possible the standard of living they had before the relationship ended.

Fifty percent of domestic violence survivors have children. Poverty and homelessness should not be the price they and their mothers pay for leaving violence.

Growing up in poverty is simply bad for children. Not having enough money to cover the necessities restricts daily life and crushes hope for the future. Children who grow up in poverty have more than three times the risk of being in poverty as an adult.

As CEDA’s recent paper, Disrupting Disadvantage, states, we can and should choose to support people in disadvantage and to commit to policies that enable us to reach our 2030 Social Development Goals to halve poverty for men, women and children of all ages.  

We had at least three natural experiments during the pandemic. One of them directly addressed child poverty – the doubling of unemployment benefits and working age payments in June 2020. The full Coronavirus Supplement protected millions from poverty and halved poverty for our poorest families – single-parent families.

Data from Accenture and illion enabled us to see that the temporary $550 Coronavirus Supplement was life-changing for those who received it. Hundreds of thousands of people were lifted out of poverty; they didn’t spend it on discretionary items and they didn’t withdraw from the labour market. They spent it on their families and bills, and they spent it quickly – so it was a better stimulus. The natural experiment of the pandemic enabled us to answer an age-old question about the generosity of social payments. It taught us that giving more money to lower-income people has many positive benefits, both to them and the community.  

Yet instead of locking in these gains, the reduced Coronavirus Supplement ended altogether and was replaced with a $25 a week permanent increase in JobSeeker in April 2021. This policy decision immediately plunged hundreds of thousands of children back into poverty. 

At least two other significant factors are driving up child poverty as we emerge from this pandemic, recognising that the pandemic is not over. These are the housing affordability crisis and increased relationship breakdown. 

A failure to invest in social housing over decades and rising house prices have been driving increased reliance on private rental. The pandemic seems to have supercharged that fact, and prices are going up whether you’re renting or buying. Rents increased by 5 percent in the cities, more than 11 percent in the regions and close to 30 percent in coastal Queensland to June 2021, with data to October 2021 showing this trend continuing. Commonwealth Rent Assistance – the support available to people receiving income support and low-income families – hasn’t had a real increase since 2000 and covers only a fraction of rent paid. Almost 1.5 million households needed Rent Assistance in June this year and we expect to see this number rise.

Domestic violence was already too high before the pandemic struck. Domestic violence increased in prevalence and severity in the 2020 lockdowns and the 2021 lockdowns will have compounded this human tragedy. 

Yet even where there was no violence or coercive control, millions of families have been under extreme pressure coping with lockdowns. Juggling remote learning with working from home; remote learning without adequate devices or data; increasing mental health presentation in children; financial concerns; and loss of support such as the ability to see friends and extended family, including grandparents, are some pressures families faced in lockdown. These pressures will increase relationship breakdowns and the emergence of new single parent (mainly female-headed) families. These families are at risk of poverty and homelessness due to the inadequacies of our policy responses.

As one of the wealthiest countries in the world we can do better. Raising income support to at least the poverty line, a 50 percent increase in Commonwealth Rent Assistance, and a serious investment in social housing from Federal and State-Territory governments negotiated through the National Cabinet would reduce child poverty in Australia.

In addition, a “bounce-back” package could help vulnerable groups get back on their feet and prevent lasting damage to our economy. This should include a focus on school children. We won’t know the full impact of remote learning on this generation for a long time, but it will be surprising if COVID doesn’t cast a long shadow over their lives. A bounce-back package could give disadvantaged kids study vouchers to use voluntarily. It could help those that missed out on critical schooling – to ensure they don’t fall through the cracks. In addition, a bounce-back package could help the so-called “recessionals”. Many young people are starting their working lives from a screen in their bedroom, without the training and workplace collegiality that establishes strong career foundations. Many couldn’t get jobs in the crisis. A bounce-back package could boost job opportunities for young workers and ease their transition into employment, similar to Britain’s Kickstart Scheme for school leavers. 

Rising levels of child poverty in Australia are not inevitable. We just need to choose to address them and give all our children the opportunity to be healthy and thrive.   

(This article draws from speeches made by Dr Andrew Charlton and Toni Wren at the National Press club on 17/11/21.) 

About the authors

Toni Wren

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Andrew Charlton

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Andrew Charlton is founder of AlphaBeta and Managing Director at Accenture Strategy, Australia and New Zealand.

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