Henry On Children
Henry On Children
Henry On Children
CAPABILITIES TODAY?
Dr Ken Henry
3 September 2009
INTRODUCTION
and the team at ARACY for their vision and enthusiasm in bringing together
this conference, and I would like to thank them for inviting me to contribute
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words reflect what is undoubtedly a shared vision of all here today – creating
a world that gives our children even better life opportunities than we
There are three main messages I would like to leave you with today. The
between workforce participation on the one hand and, on the other, the
valuable role that parents and carers play in developing the capabilities of
our children. Poorly designed policies may create perverse incentives for
the participation choices of parents and carers that affect their own
identifying and then meeting the needs of children who are in vulnerable or
faceted, ‘owned’ and valued by the families who need them most. And they
of our children and youth represent the best form of prevention. Investments
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in the capabilities of our children have large pay-offs. They allow children
the freedom and opportunity to choose lives of value; and those choices, in
We can’t talk about our children without considering the critical role that
parents and carers play in building human and social capital; nor the role of
Parents and carers have primary responsibility for guiding and influencing
their child’s wellbeing, especially in learning and development prior to, and
training to equip us for the challenges of the workforce, yet are largely left to
our instincts and vague recollections of our own upbringing when taking on
The reality, unfortunate as it may be, is that not all parents can offer their
There are also children who are at risk of disadvantage not primarily because
of parental incapacity but because of the circumstances into which they have
been born. For example, while parents of children in jobless families (that
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is, where no parent works) do have more time to spend with their children,
connection with the workforce and society can represent a poor role model
disadvantage 1 .
and transfer policies. Many people quite reasonably argue that encouraging
full-time workforce participation should not be the primary goal for some
groups, including parents with very young children. Even so, over the last
have typically been the primary carers of our children – have increased
dramatically. So too has the challenge of parenting and caring for children.
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For parents in families with significant dysfunction – such as alcohol and
gambling problems or very low social and/or economic skill levels – quite
intensive services may be needed, both to support their caring role and to
plausible also that there are long-term social benefits from government
Benefit and child care subsidies) to ensure that parents, at lower income
design. My point today is that the interactions between the tax and transfer
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system, if not properly considered, can result in perverse incentives, to the
detriment of both the parents and the children we seek to assist. Clearly,
there are complex trade-offs here, both within and between generations.
These trade-offs are at the heart of the thinking behind the Government’s
To bring some perspective to the issue, both the ARACY Report Card, to
which Fiona referred yesterday, and the Australian Institute of Health and
Indigenous children and children from remote areas and with low
socio-economic background.
Australia has risen (in both couple and single parent households) with the
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parent households 5 . The rise in jobless households has led to a large
Despite the rapid growth of income and opportunities over recent decades at
enjoyed by all.
WELLBEING
are even more prosaic than that. For instance, it doesn’t fully capture the
While I won’t go into it in any detail today, I would draw attention to the
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dimensions to the framework: the level of freedom and opportunity that
inter-temporal terms); the level of risk people are required to bear; and the
society is able to enjoy. But it is a rough measure, and it is far from the only
element.
Today I’d like to focus on the dimension of wellbeing that stands at the heart
binds all of the dimensions together. And it’s the dimension that is most
function in society. Clearly, such capabilities are not the same thing as
income and, while they include basic civil rights and political freedoms, they
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are not limited to ‘rights’. Some basic capabilities include the capability ‘to
If we are to accept the premise that ‘capability development’ is the best dose
We need to think about the right set of capabilities and the respective roles
basics to which I have just referred. They also go to ensuring that children
and youth are informed, inquisitive, active and healthy, and that they have
all of the skills they will need as adults to contribute to society in a manner
children.
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To start with, like all government spending, there is a need to ensure that any
wellbeing. That is, when taxpayer funds are not put to their best use,
therefore, that policy-advisers are able to access quality evidence and use
alternative policies.
base for families and children. Several US-based studies 8 provide evidence
‘school-ready’.
disadvantaged communities.
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There is also evidence 11 that tells us that quality schooling — as measured
policy evidence base if we are going to understand better what works and
what doesn’t.
As I noted earlier, the role government might play in supporting families and
families, as well as for generally supporting the dual role many parents and
I have noted that there are inevitable trade-offs to be made in respect of that
dual role.
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There is also a trade-off between providing some assistance broadly to all
capital against using the same resources to target more assistance at the most
Australia’s Future Tax System – implications for the tax and transfer
system
equity for the design of the tax and transfer system. In the course of the
AFTS review, Panel members have heard how elements of the family
payments system, such as income tests and the rates at which family
payments are withdrawn, impact on family decisions about whether and how
much to work. When these factors are combined with the taxation of
working.
For example, the current family payment system puts pressure on families
with two income earners to have the secondary earner wind back their
engagement with the workforce. Simply providing more assistance can lead
to low returns from working, as the same number of hours of work are not
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may have positive consequences for children when they are infants, but
workforce can have longer-term capability costs – for both parents and their
children.
redirected towards providing a higher level of support for parents with very
young children when their caring and nurturing role is the greatest, and
children move into their school years. There would, of course, continue to
be a need for assistance to low-income families with older children. But its
not only parents whose incentives matter. It is also important that the
system sends the right signals to teenagers choosing among study, work or
targeted?
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income support will not necessarily build capability or offer better life
such as maternal and child health services, affordable and quality child care,
responsibility and builds trust in the services by those who need them most.
provide it – should we aim for universal access for all, targeted assistance, or
Universal access would ensure that all families and children, regardless of
drawback is cost. Another drawback is that in many cases, the families that
would benefit most from the support services might not utilise them. And
there is the added concern of ensuring that a universal approach does not
displace the primary efforts of those parents who do have the knowledge,
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The tax and transfer system provides a mechanism for targeting government
participation.
But a further difficulty with means test targeting is that financial means are
But most importantly, the tax / transfer system can’t do it all. When it
that define the present tax and transfer system. The tax review panel has a
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To put it in more colloquial terms, the tax and transfer system needs to work
Take the case of child care. Child care support is typically under-utilised by
for 24 hours per week of child care is available without parents having to
children who would gain the most from a combination of child care and
There is a need for mechanisms that can identify the families and children
who would benefit from a ‘bridging’ arrangement, allowing the tax and
transfer system to mesh better with the services system. Such an integrated
these families and children and assists them in finding interactions with the
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Communities for Children program, which includes an integrated approach
childhood services.
A similar program is the Child Care Links project, which supports and links
Partnership’.
approaches are needed to link support services and the tax and transfer
and valued. And that probably means that they have to be developed in
I don’t pretend that this sort of approach would be easy or cheap. But it is
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CONCLUDING REMARKS
There are no simple answers here. There is no ‘one size fits all’ approach to
supporting children and families in ways that ensure that all Australians have
I have noted that one of the most important trade-offs for policy-makers is in
balancing workforce participation against the valuable role most parents and
carers play in the home, recognising that this balance may change as
generational consequences.
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I have noted also that there is a need to ensure that the tax / transfer and
youth are the best form of prevention. These investments are not only good
for our nation’s wellbeing today, they will also look after the wellbeing of
Thank you.
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1
Pech, J & McCoull, F 2000, 'Transgenerational welfare dependence: myths and realities', Australian
Social Policy, vol. 2000/1, pp. 43-67.
2
Evidence indicates that high quality child care can benefit children but long hours, especially in low
quality care, may have detrimental consequences. See Waldfogel, J. 2007, ‘Parental Work Arrangements
and Child Development” Canadian Public Policy, 33(2), pp 251-71. Other (US) evidence suggests long
working hours by sole parents can lead to higher rates of interaction with juvenile justice systems. See
Gennetian, LA, 2004. “How Sibling Composition Affects Adolescent Schooling Outcomes when Welfare
Reforms Policies Increase Maternal Employment”, Eastern Economic Journal, 30(1), pp. 81–100.
3
Isaacs J 2008, Impacts of Early Childhood programs. Massachusetts: DC. Brookings Institution, available
at
http://www.brookings.com/edu/~/media/Files/rc/papers/2008/09_early_programs_isaacs/09_early_program
s_isaacs.pdf
4
Miranti, R.,Harding, A. Ngu Vu, Q., McNamara, J. and Tanton, R. 2008, ‘Children with Jobless Parents:
National and Small Area Trends for Australia in the Past Decade’, Conference Paper no. CP126, National
Centre for Social and Economic Modelling, University of Canberra
5
Miranti, R.et al. 2008, op cit
6
Sen, A 1999, Development as Freedom, Oxford University Press, Oxford
7
Sen, A 1983, ‘Poor, relatively speaking’, Oxford Economic Papers, 35, pp 153-69.
8
Summarised in Isaacs 2008, op cit.
9
Sylva, K. et al 2008, EPPE Finale Report form the Primary Phase: Preschool, School and Family
Influences on Children’s Development during Key Stage 2, Research Brief, No. DCSF – RB061, available
at http://eppe.ioe.ac.uk/eppe3-11/eppe3-11%20pdfs/eppepapers/Final%203-11%20report%20DCSF-
RR061%2027nov08.pdf
10
Edwards, B. et al 2009, ‘Strong Families in Australia study: the impact of Communities for Children’,
Department of Families, Housing, Community Services and Indigenous Affairs Occasional Paper No. 25,
available at http://www.fahcsia.gov.au/about/publicationsarticles/research/occasional/Pages/ops-
ops25.aspx
11
Hanushek, E.A. and Wößmann, L. (2007), Education quality and economic growth, The World Bank,
Washington, DC.
12
Henry, K 2009, ‘How much inequity should we allow?’, address to the Australian Council of Social
Service National Conference “Building a Fair Australia in Tough Economic Times”, 3 April.
http://www.treasury.gov.au/contentitem.asp?NavId=&ContentID=1515
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