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5 areas of Australian public policy that saw substantial long-term impact

It is common to bemoan the absence of ‘good government’ in Australia. Trust in government is close to all time lows.

Yet despite all of this, Australia has seen significant improvements over the past decades, not all of which are commonly understood or acknowledged.

These achievements include improved life expectancy and standard of living. Australia’s educational attainment levels have improved dramatically, as has female workforce participation. And the level of crime in Australia has reduced significantly.

Of course, these outcomes are not necessarily attributable entirely to the actions of government, and broader societal and economic trends are no doubt key factors. Nevertheless, government has played a key role in many of them.

Regardless of attribution, it’s worth reflecting on how far we’ve come as a nation, and acknowledging our progress.

Life expectancy

Over the past 45 years, life expectancy at birth has increased by between 9 and 12 years.

At birth, Australian males are now expected to live until 80, up from 68 in 1971. Australian females are now expected to live until 84, up from 75 in 1971.

Over a longer time frame, the improvement has been even more dramatic. Less than 100 years ago (in 1920-22) Australian men were expected to live until just 59, and Australian women until 63.

Australian life expectancy now ranks 7th amongst OECD nations, and is 3 ½ years greater than the United States.

Key reasons for improved life expectancy include reduced infant mortality, improvements to road safety, and fewer deaths from heart disease (attributable to medical advances and reductions in smoking). Australian governments’ world-leading efforts over many decades to reduce the rate of smoking and improve road safety have been pivotal to this result.

Indigenous life expectancy also continues to improve, with life expectancy for indigenous males increasing by 1.6 years between 2005-07 and 2010-12. Over the same period, indigenous female life expectancy increased by 0.6 years.

However while the gap between indigenous and non-indigenous life expectancy is reducing somewhat, indigenous Australians can still expect to die 10 years earlier than non-indigenous Australians.

Life expectancy at birth 1971-2012 (Australia-wide)

Life expectancy at birth. Source data: 3105.0.65.001 Australian Historical Population Statistics, 2014

Living standards

GDP per capita is the generally accepted measure for standard of living (though not without its critics).

Australia’s GDP per capita has increased markedly over the past 50 years. GDP per capita in 2016 was nearly three times greater than it was in 1960.

Of particular note was the strong, and uninterrupted growth in GDP per capita over 16 years from 1992 to 2008.  Former Reserve Bank Governor, Glenn Stevens also points out that since the Global Financial Crisis in 2008, Australia’s GDP per capita performance has far outperformed key OECD jurisdictions, including Europe, the USA, the UK and Japan.

While not quite comparing with Luxembourg (US$105,768 per capita), Australia currently ranks 12th in the OECD, ahead of Canada, Finland and the United Kingdom.

In Australia, improved labour productivity has been the key factor underpinning growth in GDP per capita. Microeconomic reforms undertaken by successive governments have been central to this improvement.

However, although average living standards have improved over the past 50 years, inequality has increased with it. The gini coefficient is the most accepted means of measuring income inequality, and in Australia, the gini coefficient has risen from 0.27 in 1981-82 to 0.32 in 2011-12. Income inequality is arguably at its highest point in 75 years.

Similarly, rapidly rising house prices have seen housing affordability diminish. The deposit on a median priced home is now equivalent to an entire year of the average household’s disposable income, up from just half a year’s income in the 1990s.

GDP per capita 1960-2016

GDP per capita – chain volume measures. Source data: 5204.0 Australian System of National Accounts

Female Labour Force Participation

Female labour force participation is an important contributor towards workplace gender equality. It is the percentage of those over the age of 15 who are either in employment, or unemployed and actively looking for work.

Australia has made significant progress over the past 40 years, with female labour force participation rising from under 44% in 1978 to close to 60% in 2017. Australia now ranks 2nd in the world (behind Norway) for the ratio of female to male participation in the labour market.

However, it is notable that recent growth has been slow, with the female participation rate increasing from 56% in 2002 to 59% in 2009, and a negligible increase since then.

Government policy has played a key role in influencing female labour force participation. Key contributors to improved labour force participation include improved availability and affordability of childcare, and the availability of parental leave. The complex interplay between tax, family benefits and childcare subsidies are also important influencing factors.

Nevertheless, while female labour force participation has improved, the gender pay gap has not. The difference between male and female average weekly earnings has hovered between 15% and 19% for the past two decades.

Labour force participation 1978-2015

Labour Force Participation rate. Source data: 6202.0 Labour Force, Australia

Education

Australia has been extremely effective in improving the educational attainment levels of its population. The percentage of 25-34 year old men with a bachelor’s degree or higher has risen from 13% in 1982 to 32% in 2016.

The increase has been even more pronounced for women. The prevalence of 25-34 year old women with bachelor’s degrees has increased more than five-fold, from 8% in 1982 to 42% in 2016.

Australia now ranks 9th in the OECD for the percentage of 25-34 year old with a tertiary education, ahead of the USA and the Scandinavian countries.

The increased participation in tertiary education reflects in part the dramatic increase in available student places made available as a consequence of government policy changes from the late 1980s onwards.

Highest qualification: bachelor degree or above 1982-2016

Tertiary education attainment rate. Source data: 6227.0 – Education and Work, Australia, May 2016 table 29

Crime

The rate of homicide is generally considered to be a good proxy measure for the rate of violent crime, readily comparable across jurisdictions.

In Australia, the incidence of homicide has almost halved since 1990. From an incidence of 1.9 homicides per 100,000 people in 1990-91, the rate has declined to 1.0 homicides per 100,000 in 2013-14.

However, for indigenous Australians, the homicide rate was much higher than the national average, at 4.9 per 100,000.

In 2013-14, firearms were used in only 13% of homicides. Homicides by firearm have decreased significantly since gun law reforms in 1996.

Australia’s homicide rate is one of the lowest in the world, although not as low as Switzerland or Austria with a rate of just 0.5 homicides per 100,000 people in 2014.

Australia’s rate is significantly better than the United States (4.9 per 100,000 people in 2015) and the OECD average of 3.3 homicides per 100,000 people.

Homicide incidents — national (rate per 100,000)

Homicide incidents — national (rate per 100,000). Source data: Bryant and Bricknell 2017, Homicide in Australia 2012–13 to 2013–14, Australian Institute of Criminology (http://aic.gov.au/media_library/publications/sr/sr002.pdf)

Government policy made a difference

Australia has made significant progress over recent decades, and government policy has contributed materially to these outcomes. There is much to be proud of.

There are of course, numerous areas in which Australia has failed to make real progress. Inequality has increased, housing affordability has decreased, indigenous health continues to lag the rest of the population, and per capita greenhouse gas emissions are amongst the highest in the world.

However our desire to address today’s challenges should not stop us acknowledging our progress as a country, which is due at least in part to the work of Australian governments over a number of decades.

Author Bio

Andrew Wear

Andrew Wear is a senior public servant with the Victorian Department of Economic Development, Jobs, Transport and Resources. He previously worked in a variety of executive roles with the Department of Premier and Cabinet and the Department of Planning and Community Development.