The inadequate literacy skills of some individuals in Australia: (1) restrict their ability to exercise informed citizenship, participate in their local communities, and use their abilities and talents; (2) damage their development as autonomous, competent, and confident individuals within families; (3) may be repeated in successive generations, perpetuating disadvantage and social costs; (4) restrict their access to general preventive health information, causing individuals' health and the health of their children to suffer; (5) place at risk their rights as consumers, resulting in the individuals' exclusion from some areas entirely; (6) diminish the individuals' potential for economic growth, which affects the flexibility and efficiency of industry, restricts personal advancement and the ability to transfer across jobs, decreases initial and later employability, and increases the potential for industrial accidents and occupational health and safety problems; (7) contribute to a complex of factors that may lead to crime; and (8) increase the likelihood that the individuals become social welfare recipients. The concept of "official languages" contributes to the problem of inadequate literacy skills and to powerlessness. The two factors that appear crucial in reducing the costs of inadequate literacy skills are: (1) increasing public awareness and education regarding literacy; and (2) providing opportunities for learning that are diverse, based on a broad understanding of literacy, and based on principles of equity. (The document includes 61 references.) (CML)