Breaking the intergenerational poverty cycle

I spoke in parliament yesterday about policies to break the intergenerational poverty cycle through education.
Social Security Legislation Amendment (Family Participation Measures) Bill 2011
23 November 2011

In 1981 a young woman found that she was pregnant at 16. After confirming the pregnancy and breaking the news to her mum, she attended school until the baby was nearly due. Although her mother was supportive and encouraged her to go back to school, the young woman decided it was too hard to commence year 12 with a young infant. Having already completed her year 11 studies, she eventually enrolled in a TAFE course and began a diploma in child care, part time. Now 45, with two children, she has a successful career in the early childhood sector running childcare centres in Melbourne. She also helps pregnant women who are not so lucky, in particular teenage mothers. Her daughter, now 29, is married with two children of her own. This story was told anonymously online by the woman herself to encourage teenage mothers never to give up. It shows why attaining year 12 or its equivalent is so important for teenage parents.

The number of teenage mothers in Australia has dropped significantly over recent decades. The most recent ABS data shows just four per cent of births were to teen mothers. But the outcomes of this small group are still worrying. In the 2006 census only 17 per cent of teenage mothers completed year 12. Over 1,500 females aged 15 to 19 years were not gaining the level of education that is increasingly essential for the demands of a 21st century workforce.

In June of this year the National Centre for Vocational Education Research released a report titled From education to employment: how long does it take? The centre found that young people who do not finish year 12 take significantly longer to move into employment. The prime factor influencing the speed at which a young person obtains work after they leave the education sector was their level of education. The report also found strong gender differences. For men, those with a degree obtained work five times faster than those who did not complete year 12. For women, those with a degree obtained work eight times faster. The unequivocal message from this report is that education is vital. For a young person entering the labour market, higher levels of education lead to better wages and to getting a job faster. In a worrying statistic, about one-quarter of the young people sampled with less than a year 12 education had not obtained any work by the end of the observation period. This is a serious warning for the long-term prospects of younger Australians who do not have year 12 or its equivalent. This prognosis for the career development and income levels of those young people is grim. This bill heeds that warning and puts in place a program for teenage parents to work towards attaining year 12 or its equivalent. From 1 January 2012, teenage parents in 10 disadvantaged locations with a youngest child under six who receive parenting payment and have not completed year 12 or an equivalent qualification will be required to attend Centrelink to develop a participation plan. Under the teenage parents trial, participants will be required to undertake compulsory activities from when their child is one year old. This will give them time to settle into life with a new baby; but, equally important, they will be able to develop a plan towards gaining a good education.

Education is the best antipoverty vaccine we have yet invented. It provides the foundations from which a young person can build a life of their choosing from the career opportunities and skills development that it brings. This government gets it. We understand that education is good social policy, that unemployment is the best predictor of disadvantage and that having the skills for the jobs of the future is essential to staying out of poverty. Although it was based on children and families in the United Kingdom, a recent Four Corners program made this point. It showed the human face, the cost and devastating impact of poverty on children.

One story was of Sam, who is 11 years old and lives in Leicester with his dad and older sister. Sam's dad is unemployed and struggles with finding enough money to buy food or to operate the electricity. Their income is £70 to £80 a week, which is barely enough to buy them the basics. Often the electricity and gas run out, leaving them cold and miserable. Sam has problems with bullying and suffers from low self-esteem. He has to be careful about what he says to other students for fear he will be judged and ridiculed. As Sam said, 'People don't like you if you're poor.'

This bill puts supports in place to cut the cycle of unemployment and poverty through education. I am sure that no-one in this place wants to see any child suffer, like Sam, the indignity of poverty. A great education in Australia can see a child from Cape York go to university, become a leader in her community and eventually become Young Australian of the Year. A great education means that a child from Ilfracombe can become the first female member of the Queensland bar and our first female Governor-General. This national parliament is itself a showcase of the opportunities that education provides to children from all corners of the nation. So many members of this House acknowledged in their first speeches that they would not be here today were it not for a great education.

The Brotherhood of St Laurence tells the story of another Sam. Forty years old, Sam has been working with the local council's road services department for the past 18 months. Now Sam's life is settled, he has safe, stable accommodation and is working towards future employment goals—but it has not always been that way. In 2009 Sam was living in a rooming house where violence was commonplace and the environment unsanitary. Through the Centre for Work and Learning at the Brotherhood of St Laurence, he was chosen to join a pre-employment training program. Sam successfully completed the training and was picked up as a trainee street cleaner with the local council. Having a steady income and taking control of his finances meant that Sam was finally able to renew his drivers licence. After he completed his traineeship he was linked to a recruitment agency used by the local council, and now enjoys a regular job. 'I really want to use my brain,' says Sam, when he is asked about his plans to work with youth and when he talks about becoming a teacher.

The other part of this bill focuses on families at risk of long-term unemployment. The aim of the jobless families trial is to break cycles of unemployment. For parents with children under school age, they will be required to develop a plan for re-entering the workforce once their youngest child starts school. Their Employment Pathway Plan can also include activities focusing on the health, wellbeing and education of their children. Because this government gets it, we are making sure children in families of risk are 'school ready' to make the most of their educational opportunities.

On a definition of poverty as households with less than 50 per cent of the median income, the OECD Family Database finds that 14 per cent of Australian children live in poverty. That is too many. This is why we are taking action with this bill and trialling these programs to support those at risk of long periods of unemployment and its lasting effects.

Recently the Economist magazine reported on the impact of unemployment in Western nations. Noting the scale of joblessness in the West, it pointed out that if all unemployed people lived in one country, it would have a population similar to that of Spain. By comparison, Australia's economy and our low levels of unemployment are the envy of other Western nations. We still have our own areas of stubbornly high unemployment, those pockets of disadvantage and of generational cycles of joblessness. For those Australians caught in those cycles of unemployment and disadvantage, or at risk of falling into those cycles, the human cost is all too real. Joblessness can lead to increases in depression, divorce, substance abuse, family breakdown and life's other troubles.

A 2007 study, 'Unemployment and Psychological Well-being', by Nick Carroll of the ANU, found that the adverse effects of unemployment on life satisfaction was large and significant. Not having a job was a much better predictor of having low life satisfaction than simply having a low income. Past unemployment also had a similar adverse effect, suggesting that unemployment had left long-term scars.

Internationally, there is substantial joblessness around the world, and we know that the longer a young person spends being unemployed, the greater that scarring effect is. In the United States, the average period of joblessness is now up to 40 weeks—an increase from only 17 weeks four years ago. In Italy, a person who is unemployed has, on average, been jobless for more than a year. The more detached people become from the workforce, the more their skills atrophy, the more their self-esteem drops, making it harder to re-enter the labour force, particularly a labour force that is moving on. That leaves countries with lower growth rates, putting strains on public finances and on the social fabric.

It is a grim picture, but it is important to understand the full impact that long-term unemployment has on individuals, communities and nations. That is why education is so important to prepare and equip people for the workforce of tomorrow, to safeguard them against the detrimental effects of unemployment. I know the power of education and the dignity of work have been at the heart of the agenda of the Rudd and Gillard governments. This is one of the reasons that I ran for parliament and it is central to what we on this side of the House believe in. There are still too many Australians who live in circumstances of entrenched disadvantage. Too many Australian children are in families where their parents and grandparents have not known regular employment. They deserve to know the dignity of work, and they can benefit from the habits that arise from growing up in a household where an alarm clock goes off in the morning and someone goes off to a dignified job.

As the Prime Minister said in her address to the Sydney Institute earlier this year:

'The party I lead is—politically, spiritually, even literally—the party of work … the party of opportunity not exclusion.

'Welfare reform and workforce participation is where progressive policy and Labor values come together.'

Not everyone can make it on their own. Sometimes the odds are stacked against people. We on this side of the House are committed to putting the odds back in their favour. This bill harnesses the transformative power of education to provide opportunities for some our most disadvantaged communities. This is what a government should do and this is what this Labor government is doing.

Recently the Australian Bureau of Statistics released figures showing that in June this year there were 96,000 jobless couple families and 210,000 jobless single parent families. Of these single parent families looking for work, 23 per cent had been jobless for more than a year. For those teenage parents and families experiencing long-term unemployment in Playford, Hume, Shepparton, Burnie, Bankstown, Wyong and the other trial regions, this government knows that in this place we have a responsibility to ensure that they are part of Australia's productivity, our economic fabric and our social wellbeing now and into the future. I commend the bill to the House.

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