News ID: 213361
Published: 0608 GMT April 17, 2018

Cost of raising children in Australia much higher than previously thought

Cost of raising children in Australia much higher than previously thought
theguardian.com

Raising two children costs a low-income Australian family $340 per week, including $77 for food, $65 for housing and $61 for schooling, new research shows.

The study uses a new, more precise method for estimating family costs, and finds they are significantly higher than previously thought, theguardian.com reported.

Researchers from the University of New South Wales’s social policy research center identified each regular expense for low-income and unemployed families at acceptable standards of living and estimated the cost.

They found the cost of raising two children for a low-income family was $340 per week. The same cost was $280 for unemployed families in receipt of Newstart allowance.

A single child would cost a low-income family between $137 and $203, or $106 to $174 for unemployed families.

The research is part of a broader study aiming to inform decisions about the adequacy of minimum wages and Australia’s social safety net.

In an earlier report, researchers found social security payments such as Newstart were completely inadequate. The earlier study also detailed harrowing stories from unemployed families struggling under the weight of cost of living pressures.

“They were having terrible times,” author Professor Peter Saunders said.

“Talking through the kinds of things they went without, or how they had managed with a toothache, trying to knock teeth out with screwdrivers.

“Horrendous stuff, really horrible.”

The study aims to reflect modern attitudes on what constitutes a proper standard of living. It also captures shared costs associated with children like power and rent, and captures new and emerging costs like mobile phones.

Researchers say old models for estimating family costs are now near useless, because they simply update decades-old assumptions with changes to the consumer price index (CPI).

Saunders said the study should prompt a rethink of the adequacy of key social security payments, such as Newstart, which has not increased in real terms for more than 20 years.

“I would like to see the adequacy of low-income social security payments and minimum wage be subject to a more sensible, reasoned discussion about what we expect people to live on in Australia,” Saunders said.

“What you can do with the budget standards, is if you find that the Newstart allowance is $50 a week short in your budget then you can say, well those people who are missing $50, what are they going to have to go without to make ends meet?

“I think that’s a much more sensible way than what we’re doing at the moment. The automatic indexation kind of lets the government get away without addressing these issues.”

The Australian Council of Social Service this year launched a campaign to increase Newstart, arguing the single rate of $278 per week was completely inadequate.

Acoss says Newstart is now so low that recipients cannot afford basic needs such as housing, food, and transport.

It says lifting payments by $75 per week would “reduce poverty for hundreds of thousands of people across Australia”.

   
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