The Global Financial Crisis and Child Poverty: the Case of Australia 2006-2010

Abstract

While events associated with the Global Financial Crisis (GFC) had a profound impact on real family incomes and wellbeing in many rich countries, impacts in Australia were relatively minor. One reason for this was the massive policy response by the Australian government at the outset of the GFC, which pumped billions of dollars into the pockets of low and middle income families. This paper examines the impact of this stimulus on child poverty in Australia in the context of longer term policies on income support for families with children. We show that the emphasis of longer term policy has been to moderate support for families with children and that since the mid 1990s, rates of relative child poverty have not fallen. We find that while the impact of the stimulus was to reduce child poverty, the underlying trajectory of policies towards family assistance and child poverty in Australia have not changed, and therefore there is no expectation that child poverty will continue to fall in the future.