As households struggle with the cost-of-living crisis, a new UNICEF report has found one in six children in Australia have been left in a plateau of poverty for nearly a decade.
Children in single-parent households are almost five times more at risk of being poor than children in two-parent households.
Report Card 18: Child Poverty in the Midst of Wealth
UNICEF Innocenti’s Report Card 18: Child Poverty in the Midst of Wealth reveals 17.1 per cent of children in Australia between 2019-21 lived in relative income poverty, a slight increase of 1.7 per cent since 2012-14*. Forty-one per cent of children in single-parent households are living in poverty, compared to 8.8 per cent of children in two-parent households*.
Australia's ranking in the Report Card
Australia is ranked 18th for most recent relative income poverty, out of 39 Organisation for Economic Co-operation and Development (OECD) and European Union (EU) countries, and 29th for changes to child poverty between 2012-14 and 2019-21.
Australia’s overall rank in the Report Card’s league table is 26th, in the bottom third of the table, behind New Zealand at 19th, and followed by Chile, Romania, the United States, the United Kingdom and Colombia in last place.
Comparing to Report Card 12
This is a stark difference from UNICEF Innocenti’s Report Card 12: Children of the Recession, published in 2014, where Australia ranked 3rd for changes to the child poverty rate between 2008-2012, with a 6.2 per cent improvement. This positive change can be attributed to Australia’s increase in spending on families through household stimulus packages. The most impact appears to have been cash payments targeted at low-income families with children, which both protected the poorest children and stimulated consumption to promote economic recovery.
Addressing Australia's child poverty rate
To address Australia’s child poverty rate, UNICEF Australia is calling on the government to expand child-sensitive social protection such as raising the rate of social welfare payments for families and caregivers, improve and ensure access to basic services essential for children’s wellbeing and development, boost opportunities for decent work with adequate pay and conditions and to consider a comprehensive set of family-friendly policies.
Boosting the social protection of children
Head of Policy and Advocacy at UNICEF Australia, Katie Maskiell said the report makes it clear that more needs to be done for the social protection of children in Australia.
"When there’s a downturn in the economy, people who are already experiencing disadvantage feel it the most. They are the ones who need more support, which is what we are calling on the government to do."
“The cost-of-living crisis has been particularly devastating for low-income families who spend a large share of their income on food, energy and housing, but are struggling to keep up with the soaring prices. This means children miss out on essentials such as healthcare, education and access to healthy food.”
“While some households can withstand economic pressure for quite some time, it’s lower income families, who are living paycheck to paycheck, week after week, who don’t have that margin to stay afloat,” she said.
Preventing families from falling into poverty
Strong and sustainable social protections are essential for mitigating the effects and preventing people from falling into poverty. EU data shows that cash benefits can reduce child poverty, on average, by 40 per cent.
While Australia expanded social protection measures in response to the COVID-19 pandemic, these measures were short-term in nature. According to the ANU’s Financial Stress and Social Security Settings in Australia report, the Coronavirus Supplement decreased the number of children in poverty from 624,000 to 585,000. However, once lifted 124,000 more children were plunged into poverty by April 2021.
“We need to see sustainable social protection systems put in place. Australia can make improvements by learning from other countries such as Belgium which adjusts its social protection measures on a regular basis according to the cost of living,” Ms Maskiell said.
Missed opportunity to tackle child poverty
The period from 2012-14, following the recession, saw economic recovery and stable economic growth in most high and upper-middle income countries. This period presented as an opportunity to tackle child poverty, which some countries took and others, like Australia, did not.
Countries such as Belgium and the UK, both with a similar GDP to Australia, started the beginning of the reporting period with a similar poverty rate to Australia. While Belgium reduced child poverty by 17 per cent by 2019-21, the United Kingdom saw an increase of 19.6 per cent.
Proactive adjustments to social protection
Belgium is proactive in adjusting its social protection transfers according to the changing costs of living. When it’s so-called “health index”, derived from the consumer price index, reaches a value specified by law, benefits and public sector wages are automatically adjusted to reflect the increase.
Reduced expenditure for child-related social protection
The UK on the other hand saw the largest increase of all countries in the Report Card, meaning about half a million more children were in poverty by 2019-21. Several factors are likely to have contributed, but notably since 2012-14 there has been a reduction in expenditure for child-related social protection.
Similarly, in the reported period, Australia has reduced its expenditure per child from 9.6 per cent to 8.9 per cent of GDP per capita.
"We need continued increasing investments in children so that they are not left experiencing vulnerability and poverty for another decade."
Read the full report here
*The report utilises the best available comparable data, using an average income poverty rate over three recent years (2019 to 2021) due to pandemic-related data collection challenges. To ensure comparability, the base reference period remains the three-year span of 2012-2014.
Child income poverty is measured by the proportion of people falling below a threshold relative to the average income, using an 'equivalised' income below 60 per cent of the median income. Equivalised incomes consider variations in household size to account for savings from living in larger households.
The income poverty measure focuses solely on incoming household income and does not consider outgoing costs or the effects of the cost-of-living crisis.