Children who grow up in poor households are five times more likely to experience poverty as an adult, new data released today shows.
The poverty rate for children in single parent families has jumped from 16.1 to 28.1 per cent from 2016 to 2018.
Tracking Australian families since 2001, The Household, Income and Labour Dynamics in Australia Survey tells the stories of the same groups of people over the course of their lives.
Lead author Professor Roger Wilkins said this was the first time HILDA data looked at the "intergenerational transmission of poverty" using 18 years worth of results.
"We haven't been able to do that with any other data in Australia," he said.
"If you grew up in a persistently poor family then you're five times more likely to be persistently poor as an adult compared to a child who didn't experience any poverty in childhood."
The data shows single parent households are most likely to report struggling to afford essentials, with a fifth stating they had gone without three or more essential items or services in the year they were surveyed.
When HILDA began, poverty was very much associated with older Australians.
But through changes to superannuation, indexing the aged pension and higher home ownership rates, Prof Wilkins said "enormous strides" had been made.
"In fact, you could say in some areas we've overshot," he said.
He said previous measures such as a more generous family tax benefit and baby bonus "really did work" to reduce child poverty, and policy interventions could be a good investment for governments.
"You're not only reducing the suffering that's happening in the family at this point in time, but you're also likely to be reducing socio-economic disadvantage down the track," he said.
This could reduce welfare expenditure and increase tax revenue through higher workforce participation.
Prof Wilkins said the HILDA Survey evidence on the economic fortunes of single parent families in recent years is a "concerning trend".
"It is not clear why their economic wellbeing would have deteriorated, but clearly this needs to be closely watched if this trend is borne out by evidence from other sources."
Australian Associated Press