Transcript PPT

Income support
The geographic distribution of welfare payments
in Australia
Speaker: Carolyn Brennan
Authors: Carolyn Brennan, Helen Swan, Dennis
Byles.
Overview of Presentation
•
•
•
Aims of the report
Data and limitations
Some key findings:
1.
2.
3.
4.
5.
•
The big picture
Some regional differences in total welfare payments
The distinction between Working Age Payments and the Age Pension
Spatial differences in Working Age Payments and the Age Pension
Some explanations
Concluding remarks
Aims of the report
• To show the distribution and trends in five major welfare
payments, comparing states and territories, remoteness
classes and statistical local areas (SLAs).
• To compare our results with other literature in this field.
• To explore the relationship between income support and
economic growth at a regional level.
Main data source
ABS Experimental Estimates of Personal Income for Small
Areas (catalogue number 6524.0.55.001).
• Includes all types of individual income and five welfare
payments
• Information is provided for Statistical Local Areas (SLAs) for
the financial years 1995-96 to 2000-01.
Data limitations
• Data set does not include: Veterans pensions or Community
Development Employment Project (CDEP) payments.
• The population size of Statistical Local Areas varies.
• Age of the data set.
Some key findings
• Part 1: The big Picture
Compared to other OECD countries,
Australia’s expenditure on its welfare state
is relatively modest.
30
Percentage of GDP (%)
25
20
15
10
5
1980
1985
1990
1995
2000
2001
2002
2003
Year
Australia
United States
Canada
OECD 28
Japan
Scandinavian Average
United Kingdom
10
9
8
7
OPEC oil crisis
GST
6
5
4
Recession
Recession
3
Baby bonus
2
1
0
S
ep
-5
S 9
ep
-6
S 2
ep
-6
S 5
ep
-6
S 8
ep
-7
S 1
ep
-7
S 4
ep
-7
S 7
ep
-8
S 0
ep
-8
S 3
ep
-8
S 6
ep
-8
S 9
ep
-9
S 2
ep
-9
S 5
ep
-9
S 8
ep
-0
S 1
ep
-0
4
Welfare payments as a percentage
of GDP
Welfare payments, as a proportion of
GDP, have been at approximately the
same level since 1993.
Year (quarterly data)
Part 2: Some Regional Differences
• Welfare payments are not evenly distributed by remoteness.
Welfare payments as a percentage of
total income
16
15
14
13
• Source:
ABS Cat. 6524.0.55.001
12
11
10
9
8
1995/96
1996/97
1997/98
1998/99
1999/00
2000/01
Year
Major Cities
Inner Regional
Outer Regional
Remote
Very Remote
Individual payments by remoteness 2001
6
% of total income
5
4
3
2
1
0
Major Cities
Age Pension
Source: ABS Cat. 6524.0.55.001
Inner Regional
Parenting Payment
Outer Regional
Disability Support Pension
Remote
Newstart
Very Remote
Youth Allowance
Part 3: There is a basic distinction
between payments to the working age
population, and payments to the elderly.
Age Pension vs Working Age Payments
AGE PENSION
• Recipients have retired, so no
expectation that they will
become economically active
again
• Contrary to media hype, there
is no ‘Ageing Tsunami’:
– Although the population is
ageing, so is the wealth of
retirees
• Lower levels of disadvantage
WORKING AGE PAYMENTS
• Includes: Disability Support
Pension; Parenting Payment;
Newstart Allowance and Youth
Allowance.
• Recipients are working age,
and receipt is often temporary.
• Associated with higher levels of
disadvantage
Issues and Trends
AGE PENSION
• Increasing numbers of the
elderly potentially means
greater health expenditure
WORKING AGE PAYMENTS
• Newstart has been declining,
along with unemployment
• Family and child benefits have
increased a lot over time;
however, parenting payment
appears reasonably stable
• But, recipients of the disability
support pension have been
increasing faster than the
disability rate...
In fact, numerous studies show a relationship between
disability support pension and negative labour market
conditions – particularly for low skilled older males.
But, Australia’s been having a boom – why is the rate
increasing?
• The bulk of jobs growth has been for skilled workers.
• Bob Gregory argues low skilled work, particularly for
older males, has not experienced growth in the new
economy.
• A recent trend is the increasing numbers of women
joining the DSP.
Part 4: Spatial differences in
different payments
Working Age Payments vs Age Pension 1996
Working Age Payments vs Age Pension 2001
Part 5: So much for egalitarianism –
why are there such big regional differences?
• Explanation 1: Regional economic differences. Changes to
industry create winners and losers.
• Explanation 2: Migration of the skilled and talented to
metropolitan areas.
• Explanation 3: Welfare-led migration. Retirement and
lifestyle, especially for low incomes.
• Explanation 4: Residential planning and neighbourhood
effects
But before you thought the solution was simple
• Even though there is some evidence that working age
payments, in particular, DSP and unemployment payments,
increase when economic times get tough, the reverse is NOT
true.
• So, boosting regional economic growth will not necessarily
reduce welfare in those areas. Instead, the jobs may go to
outsiders!
Concluding remarks
• Welfare payments in Australia are moderate by OECD
standards.
• Australia is better equipped to handle its ageing population than
many other nations.
• Australia does have an issue with disability support pension.
• There are stark geographic differences in welfare dependency.
• As long as payments are not fixed geographically, some people
will move to places which are more affordable and offer better
lifestyles - and why not?
• Policymakers need to take account of this in planning services
for the future.
BITRE’s report on Income Support will be
released later this year.