A Comparison of the Outcomes of Family Benefit Schemes Helen - - PowerPoint PPT Presentation

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A Comparison of the Outcomes of Family Benefit Schemes Helen - - PowerPoint PPT Presentation

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Australian School of Business ATTA 2013 A Comparison of the Outcomes of Family Benefit Schemes Helen Hodgson Australian Policy Goals School of Business Structural Issues in the tax transfer system Horizontal Equity Assist with

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Australian School of Business

ATTA 2013

A Comparison of the Outcomes of Family Benefit Schemes

Helen Hodgson

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Australian School of Business

Policy Goals

  • Structural Issues in the tax transfer system
  • Horizontal Equity
  • Assist with cost of raising children
  • Horizontal Equity
  • Anti Poverty Measures
  • Vertical Equity/Redistribution
  • “Family Policies”
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Australian School of Business

Evaluating Outcomes

  • Child Poverty Rates
  • Family Joblessness
  • Female Workforce Participation
  • Inequality measures
  • Pre/post transfers
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Australian School of Business

Key Resources

OECD

Database: OECD.Stat

  • OECD. (2008) Growing Unequal? Income Distribution and

Poverty in OECD Countries. Paris: OECD.

  • OECD. (2011) Doing Better for Families. OECD Publishing.

OECD (2012). Gender Equality in Education, Employment and Entrepreneurship: Final Report to the MCM 2012. Paris, OECD. Luxembourg Income Study: LISdatacenter.org but NZ not included

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Australian School of Business

  • Early Australian data not in OECD series (ABS used)
  • Inequality has risen in both countries before tax/transfers.
  • NZ has drop from mid 1990s compared to Australia

Inequality Measures: Gini index

0.2 0.25 0.3 0.35 0.4 0.45 0.5 0.55

Australia before tax/transfers New Zealand before tax/transfers Australia after tax/transfers New Zealand after tax/transfers

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Australian School of Business

GINI P90/P10 P50/P10

Value Rank Shift 90s Value Rank Shift 90s Value Rank

NZ 0.34 23 0.0 4.27 19 0.2 2.06 16 Aus. 0.30 16

  • 0.8

3.95 15

  • 0.1

2.09 18

  • OECD Growing Unequal Table 1.A2.2 1.A2.4
  • P50/P10 not available
  • Ranked out of 30, most equal to least equal

OECD Measures: Mid 2000s

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Australian School of Business

Population receiving < 50% mean income

5 10 15 20 25 30 35

Australia before taxes and transfers NZ before taxes and transfers Australia after taxes and transfers NZ after taxes and transfers

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Australian School of Business

Child poverty linked to

  • Joblessness
  • Sole parent
  • Inadequate wages

Child Poverty Rates

Poverty among children Poverty in households with children

Mid- 2000s Point changes since mid- 1990s All Single Couple Level, mid- 2000s chang e from 1995 Level, mid-2000s Not working Working No workers One worker Two and more workers Australia 12

  • 1.2

10

  • 1.0

68 6 51 8 1 NZ 15 2.3 13 1.5 48 30 47 21 3 OECD 13 0.6 11 0.3 58 18 49 14 2

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Australian School of Business

2 4 6 8 10 12 14 16 18

1970 1980 1990 2000 2010

Low Pay Incidence: Australia Low Pay Incidence: NZ Australia unemployment New Zealand unemployment

  • Low Pay Incidence = % earning less than 2/3 median annual wage
  • Australia higher low pay incidence from 2000 & unemployment

Unemployment & Wages

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Australian School of Business

Unemployment:

Duration as % of unemployed:

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

  • ver 1 year

6 to 12 months 3 to 6 months 1 to 3 months < 1 month

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Australian School of Business

Demographic Change

  • Similar in both countries
  • Increasing rates of sole parents
  • Higher in NZ: 24% v 17%
  • Projections up to 30% by 2030
  • Smaller families
  • Later child birth
  • Cohabitation rates increased compared to formal

marriage

  • Increased female participation in workforce
  • About 70%
  • 2/3 part time
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Australian School of Business

Political & Institutional Factors

  • NZ in coalition since 1996
  • Similar trends in governing party in each country

Australia New Zealand 1975 Coalition: Fraser 1975 National: Muldoon 1983 Labor: Hawke 1984 Labour: Lange 1990 National: Bolger 1996 Coalition: Howard 1999 Labour: Clarke 2007 Labour: Rudd 2008 National: Key

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Australian School of Business

Observations:

  • 1. Trends very similar in the 2 countries
  • 2. NZ performs slightly better than Australia on most

measures, but timing issues – Bigger gap between highest and lowest earners

  • 3. Neither country has any universal family benefit remaining
  • 4. Australia retains “modified universal” family benefit system

through base level benefit (up to about 2 x average earnings)

  • 5. Argument in NZ centres around horizontal equity &

universal benefit rather than vertical equity