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Speech by The Hon Sussan Ley MP

Household, Income and Labour Dynamics in Australia – HILDA Survey Research Conference

Location: Melbourne

E&OE

Thank you Professor Fairbairn for your introduction

Good morning to all of you attending this important conference

I would like to begin by acknowledging the elders and traditional owners of the Kulin Nation on whose land we are meeting today

I would also like to acknowledge Professor Fairbairn as the Director of the Melbourne Institute and the Director of the HILDA Survey at the Institute, Professor Mark Wooden

It is a great pleasure to be here today at Melbourne University to open the Household, Income and Labour Dynamics in Australia (HILDA) Survey Research Conference 2005

The Howard Government and the Melbourne Institute have enjoyed a very successful and fruitful working relationship since this vital research project first began

And the HILDA survey has proven itself to be a very valuable investment in effective social policy development since it was initiated by our Government in the 1999-2000 Budget

The Howard Government’s faith in the survey’s continuing effectiveness was underlined by further investments in it in the 2003-04 and 2004-05 Budgets

In the latter Budget the Howard Government approved further funding of $22.9m which will enable four more annual data collections

By 2010 we will have had eight waves of HILDA containing a wealth of economic and social information

This information will cover the gamut of life’s experiences for thousands of households and individuals over a period of nearly a decade

As a longitudinal survey, HILDA has had the ability to provide many insights into our nation’s changing social and economic environment over an increasing period of time

The longitudinal nature of the HILDA survey provides a quality and depth of data not found in “point in time” surveys

HILDA primarily collects data on the changing income, work and family dynamics of the population

The research on income dynamics has a particular focus on how households respond to policy changes aimed at improving financial incentives and interactions between changes in family status and poverty

Research of labour market dynamics has a focus on low to middle income households, female participation and work to retirement transitions

Family dynamics research focuses on family formation, wellbeing and separation, along with post-separation arrangements for children and links between income support and family formation and breakdown

Beyond its primary focus on income, families and work, HILDA survey questionnaires have explored other aspects of people’s lives which relate to government policy across a range of portfolio agencies and state and territory governments’ responsibilities

These include childcare, housing, household expenditure, education, partnering and relationships, disability, general health and wellbeing, lifestyle and living situations, the workplace and parenting

The depth and breadth of this information allows multi-disciplinary approaches to the analysis of change

There are similar surveys in Europe and the United States but there is no other national source of such longitudinal data in Australia

With a sample of more than 8000 households and 19,000 individuals, it represents an important slice of Australian society

It has been embraced by governments as a social policy tool with the capacity to build a whole-of-government research and policy framework

A whole of government approach to social policy is increasingly becoming the focus of Government activity in areas such as Indigenous affairs and family relationships services

The Melbourne Institute of Applied Economic and Social Research, in collaboration with the Department of Family and Community Services (FaCS), has also developed several special research modules focused on particular topics

For example, questions on transitions to retirement, wealth and young people are being repeated every few years

These modules enrich the data and confirm the responsiveness of the research community to the big research and policy issues confronting policy analysts and the nation

The modules also focus on policy areas of key importance to the Howard Government such as responding to an ageing population and focusing on early intervention, especially for children and families

This is not research in a vacuum — it is focused and relevant and a solid base from which to develop social and economic policy

The quality and relevance of the research is clearly demonstrated by the presentations in the program for this HILDA Conference

They are focused on research themes which not only have strong general public interest but are also the emerging policy issues facing the Australian Government

For instance a paper to be presented by FaCS later today, gives some very encouraging news in respect of the challenges posed by Australia’s ageing population

The paper shows there has been a significant increase in just a few years in the proportion of retirees who are independent of any government income support

The proportion of Australians over the age of 65 who are fully self-funded and not calling on any form of Age or DVA income support has increased from 20.1 per cent in 2001 to 22.3 per cent in 2005

In other words, the proportion of self-funded retirees has increased from nearly one person in every five to almost one person in every four and a half people

The apparent trend towards financial self-reliance is particularly evident among Australians reaching the age when they would first qualify for an Age Pension

Over recent years there has been a rapid reduction in the proportion of the Australian population reaching age pension age and calling on the Age Pension

In 1999-2000 57.4 per cent of Australians reaching age pension age were calling on the Age Pension but by 2003-04 this rate had fallen to 51.2 per cent

In the same period the proportion of the population at age pension age receiving the maximum rate of Age Pension dropped from 36.5 per cent to 31.4 per cent

The reduction in people coming onto pension at the maximum rate seems to be driven by the fact that recent cohorts of Australians are reaching pension age with significantly greater real wealth than earlier cohorts

In part, this reflects the increasing maturity of the superannuation industry, and in particular, compulsory superannuation contributions

Encouragingly, the paper also clearly identifies strong trends showing that Australians are accumulating greater wealth and working later into life and that many of them expect to be more self reliant than current retirees

FaC’s research also busts the myth that many senior Australians artificially structure their financial arrangements to obtain at least some pension payments

FaCS’ research shows there is no evidence to support such claims

Other research to be canvassed over the next two days includes how best to support working mothers as well as consideration of the causes of divorce

Understanding the dynamics of divorce is very important because of the financial implications for families and the potential negative impacts on children

Such research also informs the more than $397 million family law reform package which our Government is now beginning to roll out

These and other research presentations at this conference will build a productive interaction between policy and research

Some of these presentations concern:

  • Non-standard employment
  • Women and work
  • Workforce transitions
  • Marriage and family

(Key Point) Since the beginning of the HILDA survey, the partnership between the Australian Government, the Melbourne Institute, and the research community has strengthened significantly

We each understand the other better and there is mutual respect

The exchange of ideas and linkages developed between the research community and policy makers assists our Government to address the many policy challenges ahead

The efficacy of HILDA is obvious from the growing list of publications in academic journals and from the number of references to HILDA which appear in key social policy documents

There are more than 500 users of the data

Each new release of data builds on the findings from previous waves

Key findings from the third wave of data are outlined in the HILDA Survey Annual Report 2004 (page 20)

These findings in some cases confirm what the research community and the Australian public might have suspected — but evidence and confirmation of the research hypothesis act as a strategic policy lever for Government

Data from the HILDA survey has been used for a number of key policy development and review exercises

For example, the Productivity Commission used HILDA data to prepare the report for Government on Structural Ageing

The Child Support Taskforce used HILDA as a reference in the preparation of the Taskforce’s report to Government earlier this year

Departmental submissions on welfare reform and poverty have also both utilised HILDA data

The published research illustrates the diversity of the HILDA data and reinforces the benefits of longitudinal data

The analysis of the dynamics of change is as much about stability within households as it is about changes in the life course of the individuals within households

The value of HILDA is already evident but its real contribution is still to come, as future waves of data are released

With continued support from government, the Melbourne Institute and their fieldwork agency ACNielsen, will continue to produce high quality and timely datasets for policy analysts and researchers to build up valuable information about living in Australia

Key Point: As I indicated earlier, Government funding since 2000 demonstrates the Government’s commitment to the HILDA survey

The Government appreciates and recognises the value of longitudinal data to assess the impact of policy change, as well as to inform policy

Each new data wave release demonstrates that the HILDA survey is a versatile research tool from which evidence-based socio-economic policy can be developed

And the strategic investment by Government in HILDA is now being realised

Wave 4 data, which included a youth specific module as well as questions about private health insurance coverage and extra questions about disability, is being prepared for release in February next year

And data collection for Wave 5 began last month with the inclusion of a fertility module with questions relating to fertility and partnering and the identification of informal carers

Users will be able to access Wave 5 data early in 2007

As I have said, by 2010, there will be eight years of data available to help us understand how people’s lives change across the life course, as well as how the broader changes in our society impact on the lives of people

Key Point: Leadership in social policy research has been a hallmark of the Howard Government and my department over the years

Its commitment to research is demonstrated by continued funding of the Social Policy Research Centre at the University of NSW and the Social Policy Research Agreements program

FaCS has been a leader in collecting and sharing longitudinal administrative data for a number of years

Key Point: In the early stages of HILDA development there was an argument for a longitudinal survey focused only on the economics of households

The Australian Government has shown considerable foresight in acknowledging that income and expenditure are best understood in context

As a result of this thinking the social and attitudinal components of HILDA were included and they are as interesting and important for policy decision makers, as the economic components of the survey

HILDA is now delivering dividends on the Government’s investment – for example, for the first time households are being asked a series of questions face to face on wealth — which enhance and enrich information available from the ABS or other economic surveys

In addition, the questions on fertility intentions in HILDA contribute to a social policy debate that are much more complex than a simple discussion of population trends in Australia

Our s Government initiated the discussion of the impact of structural ageing in the Treasurer’s ‘Intergenerational Report 2002-03’

The data from HILDA on fertility will be critical to addressing the social and attitudinal implications for our ageing population

This Government and the research community are undertaking ground breaking work on the most important social policy issues we face

We look forward to the continuation of a successful and enlightening partnership with the research community

Your work is vital to the Government’s task of steering our nation on its voyage into the future

Again, I take great pleasure in opening this conference

I wish you well in your deliberations and I will now hand over proceedings to Professor Wooden and Professor Peter Lynn.