Contents
- Part 1 Executive Summary
- Part 2 Performance reporting
- Part 3 Corporate governance and accountability
- Part 4 Appendices
- Part 5 Financial Management
Annual Report 2007–2008
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Annual Report 2007–2008
Annual Report 2007–2008 » Chapter 2: Operating environment
FaHCSIA’s operating environment is complex and is influenced by a range of factors, including social and economic trends, family formation and stability, and population growth. Alongside its social policy advising role, FaHCSIA seeks to improve client outcomes through three principal activities—payments to individuals, funding and provision of services, and transfers to state and territory governments for the delivery of services.
There has been significant structural change in the economy over recent years and while there are higher real incomes and strong employment growth, much of this growth has been in part‑time and casual employment. Earnings inequality has increased, reflecting the increased demand for an educated and skilled labour force at the expense of low‑skilled occupations.
There have also been significant changes in the demographic characteristics of the Australian population. Family formation is occurring later, with mothers now giving birth to a first child at the historically high median age of 30.8 years. Household sizes continue to decrease, while the proportion of lone‑parent families has stabilised at around 21 per cent following increases over recent decades.
Significant structural and systemic problems have given rise to a large gap in living standards, life expectancy, education attainment, health outcomes and employment opportunities between Indigenous and non‑Indigenous Australians.
Around three quarters of Indigenous Australians live in urban and regional areas, but for this proportion a number of the indicators of Indigenous wellbeing such as poverty, employment rates and health disadvantage are not significantly different compared with those in remote Australia.
Remote areas have low levels of literacy and numeracy and preventable diseases are common. Alcohol and other substance abuse, violence and anti‑social behaviour are common in many communities in northern and central Australia.
To be able to meet the diverse range of needs of Indigenous Australians, both targeted and universally available programs, payments and services are necessary. The economic and cultural environment presents challenges to the effective delivery of government services. Both targeted actions and the use of mainstream and universally available services, including payments and service delivery, across all government portfolios must therefore be brought to bear.
Indigenous individuals and communities in regional and remote areas also face the same challenges which confront the wider community in areas such as climate change, drought and economic decline.
FaHCSIA’s primary assistance to senior Australians is through the Age Pension, which is the single largest outlay by the Department. FaHCSIA also provides significant assistance to seniors who do not receive the Age Pension.
The Australian population is ageing and the number of people accessing the Age Pension is growing. The age pension population has grown by around 20 per cent in the last decade. This growth has also been driven by policy changes. For example, the halving of the assets test taper from September 2007 has contributed to increased diversity amongst age pensioners, including in the range of their private income and assets. The average income and assets of recent age pension entrants is substantially higher than those of the age pension group as a whole. This in part results from the increasing maturity of the superannuation system.
The Senate committee report on the cost of living pressures on older Australians identified groups who may be facing particular challenges, including single pensioners who rent, and people who were unable to significantly benefit from superannuation. The focus on adequacy, combined with the growing and increasingly diverse age pension population, poses challenges for policy design.
As part of its inquiry into Australia’s Future Tax System, the Government has committed to an investigation into measures which will strengthen the financial security of seniors, carers and people with disability. These measures include a review of the Age Pension, Carer Payment and Disability Support Pension.
The Pension Review, due for completion by the end of February 2009, will investigate the appropriate levels of income support and allowances, the frequency of payments and the structure and payment of concessions or other entitlements. The report on the review, to be concluded by the end of 2009, will inform the broader inquiry into Australia’s Future Tax System.
The Department devotes significant effort to meeting the needs of people with disability and their carers. With the changes to the machinery of government during 2007–08, FaHCSIA gained responsibility for the Disability Support Pension. Expenditure on that measure was $9.37 billion for 2007–08. The Department also provides funding to community organisations and to the state and territory governments, for the provision of services that meet the wide range of needs of clients in this area.
There are a number of overarching issues that will contribute to the way the Department is able to deliver its payments and programs into the future for people with disability and carers. The impact of an ageing population, leading to an increased proportion of people with disability, has implications for both the provision of disability services and the adequate supply of carers.
Another challenge is to ensure that the design of disability services responds to changes affecting people with disability, such as onset and transition in care needs, to ensure that client outcomes can be optimised.
The Government’s $293.6 million 2008–09 Budget package for carers of children with disability responds to the Carer Payment (child): A New Approach report released on 7 February 2008.
The report highlighted inadequacies in access to Carer Payment (child) and revealed a number of challenges arising from the wider operating environment that impact on carers:
The COAG National Action Plan on Mental Health 2006–11 has set the framework in which FaHCSIA is designing and progressing its mental health policies and programs.
Mental health is an issue that crosses jurisdictional and portfolio boundaries, and activities have historically been in the clinical and health‑related sphere. More can be done through integration of services, treatment and community support programs across both the health and community services sector and across jurisdictional boundaries.
Challenges still remain around how best to manage the linkages between mental health and other social policy areas, including drug and alcohol services and the provision of education, skills development and employment services. Also of importance is stable and appropriate housing, with support services that allow greater participation and stabilisation and enhanced community acceptance, as a long‑term means to ensuring better outcomes for clients.
FaHCSIA’s child focus changed during 2007–08 with the transfer of the child care function to the Department of Education, Employment and Workplace Relations. The Department has retained responsibility for assisting children at risk, and has renewed this policy focus to recognise the cost to society of child neglect, abuse, and general disadvantage.
Following the launch of the discussion paper, Australia’s children: safe and well—a national framework for protecting Australia’s children, FaHCSIA is working with states and territories to establish the National Child Protection Framework. The Department is also working with states and territories to explore opportunities that could improve information sharing about children at risk.
Strong families play a vital role in the development and protection of children and in creating and sustaining the human capital needed for a strong economy. FaHCSIA provides a variety of payments, programs and policies to support families in balancing their work and caring responsibilities and in promoting healthy family relationships. A child-centred approach to policy aims to ensure that programs promote the best interests of children and help to protect them from abuse and neglect.
A major priority for FaHCSIA is providing support for families that encourages workforce participation and social inclusion and helps families to meet their diverse caring responsibilities. It is also vital for parents to have support in caring for their children, particularly in the early years of development. This will help children to have the best possible start to life.
FaHCSIA works to ensure family assistance is well targeted and cost effective in assisting families with the expenses of raising children. In 2007–08, FaHCSIA spent approximately $15 billion on payments to families, the majority of this being on Family Tax Benefit. This figure excludes Family Tax Benefit expenditure through the Australian Taxation Office.
In 2007–08, around 80 per cent of families with children under 16 received Family Tax Benefit and almost 30 per cent also received income support.
FaHCSIA works towards increasing opportunities for women to participate fully in the economic, social and cultural activities of Australian society.
Increasing the labour market participation of women is vital to the strength of the Australian economy. However, as at February 2008 the gender pay gap in average weekly wages among full‑time employees was 15.7 per cent.
In May 2008, women’s labour force participation was 58.4 per cent compared with 72.4 per cent for men. Forty-five per cent of employed women are in part‑time work and women comprise 70.9 per cent of all part‑time employees.
Interrupted work patterns due to caring responsibilities, coupled with lower rates of pay, result in many women not achieving financial independence in retirement. Women’s superannuation balances are lower than men’s at most ages, and the gap begins to widen significantly around the age of 35.
Violence against women continues to be a challenge for society. Around one in three Australian women experience physical violence and almost one in five experience sexual violence during their lifetime. Indigenous women are more likely to be a victim of family violence than any other category of Australian women.
Housing affordability is a key social and economic challenge facing Australian society. The Government has identified the supply of affordable housing as a major challenge that influences the capacity for a significant segment of Australian society to be able to live securely in the longer‑term. It is also recognised that resolving housing supply issues, and the resulting housing affordability problems, will rely on a range of interventions including those outside the FaHCSIA portfolio.
Over the last decade, the average cost of buying a home has nearly doubled and average rents for three‑bedroom homes have risen by 82 per cent. Rental vacancy rates have halved since 2004. This shortage in housing supply has driven both home purchase and rental costs to levels that are unaffordable for many Australians. While Australian Government Rent Assistance payments go part of the way to helping disadvantaged tenants in meeting housing costs, the need to deal more comprehensively with supply-side issues is becoming paramount.
The establishment of the National Housing Supply Council will go some way towards understanding the complex nature of this problem and identifying possible solutions. FaHCSIA has a range of measures aimed at improving support services for people who are homeless, or at risk of homelessness, and for increasing the supply of affordable housing.
Around 100,000 people in Australia are homeless on any given night, with half of these under the age of 24. The causes and effects of homelessness are complex and can be exacerbated by a range of other issues, including low levels of education and employment, mental health and disability issues, drug and alcohol dependence, welfare dependence and criminalisation.
The effects of homelessness can be debilitating and unless the potentially multiple causes can be dealt with in a coordinated fashion, the problems can become unmanageable for the individual. As a consequence, the impact of homelessness on individuals, families and the community are invariably significant.
A key focus for FaHCSIA is the furthering of social justice and equity in the Australian community.
FaHCSIA’s programs and activities focus on improving the lives of Australians by building personal, family and community capacity and wellbeing. Across the areas of Indigenous Australians, seniors, disability and carers, mental health, children, families, women, and housing, the Department seeks to maximise economic and social participation, focuses on early intervention as a strategy to assist individuals, families and communities and assists those who are most disadvantaged. Coupled with a focus on social inclusion, these policies and programs serve to enhance social justice and equity in Australia.
The Department’s activities seek to: give children a good start in life; assist people with disability to achieve greater independence and self‑reliance; and address entrenched Indigenous disadvantage. The Office for Women works to achieve more equitable outcomes for women.
FaHCSIA’s Reconciliation Action Plan was launched in May 2007. Its implementation and renewal throughout 2007–08 gave effect to a longstanding, growing and ongoing commitment to reconciliation by the Department. The plan goes hand-in‑hand with the Department’s efforts to close the gap on Indigenous disadvantage.
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