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Child poverty has an economic cost of almost $60 billion annually: NCOSS report
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Freya Lucas
Nov 26, 2024
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The economic cost of child poverty is almost $60 billion a year, according to new research commissioned by the New South Wales Council of Social Service (NCOSS).
Authors of Lasting Impacts: The Economic Costs of Child Poverty in NSW found that the economic cost of failing to invest in children equates to more than $7,000 per NSW person.Approximately 278,000 children live in poverty in NSW - almost one in six - with the number growing as high as one in four in areas such as Sydney’s western and south-western suburbs.
“Child poverty hurts us all - it robs children of their future and steals $60 billion from the NSW economy every year,” NCOSS chief executive Cara Varian said, outlining sobering statistics which show that the cost of childhood poverty eclipsed the annual contributions to the economy from major sectors such as construction ($52.9 billion), manufacturing ($42.3 billion) and mining ($32.5 billion). “Children from households living in poverty are three times more likely to also experience poverty in adulthood. We are setting up a cycle of disadvantage.”
Poverty experienced during childhood often has a lifelong impact, with children going on to have poor physical and mental health, and to earn less at work. Children who experience childhood poverty are also more likely to be unemployed, homeless or engaged with the legal system as an adult. “We live in one of the world’s wealthiest nations - poverty is preventable and this research shows the immense economic opportunity available to the NSW Government, if it takes the steps necessary to avoid the long-term consequences of child poverty,” Ms Varian said. The economic costs from childhood poverty include $26 billion in direct costs (delivering Government services, reduced labour market participation and productivity) and $34 billion from diminished health and life expectancy. Ms Varian called on both the NSW and Australian Governments to do the following to lift families out of poverty:
- Substantially increase base rates of income support payments, particularly JobSeeker and Parenting Payments (e.g. match rates of the Age Pension), and index them to community living standards.
- Ensure that a minimum of 10 per cent of all housing is social and affordable housing; further increase Commonwealth Rent Assistance to keep up with private rental rates; and ensure homelessness services are resourced to support everyone who needs help.
- Commit to joint decision-making to empower First Nations communities in the design and delivery of services, including boosting funding for the Aboriginal Community Controlled sector.
- Guarantee all children have access to at least three days a week of quality and affordable childcare, with removal of the Activity Test on the childcare subsidy.
- Invest in high-quality integrated support services for children and families that help them early in life.
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