Poverty in Australia
A 15 month-long Australian Senate inquiry, entitled “A hand up not a hand out: Renewing the fight against poverty”, identifies a continuing decline in income for many poor households and emphasises the central role of employment opportunities in tackling poverty. It highlights these points:
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Between 1984 and 1999, the top 20% of Australian income earners saw a 1% increase in their disposable income, while the poorest 20% saw a 10% drop; |
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Twenty-one per cent of Australians — about 3.6 million people — live on less than $A400 per week, which is $31 less than the full-time minimum wage; |
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One million Australians are considered to be poor although they live in households where at least one adult works; |
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700,000 children are growing up with neither parent working full-time; and |
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The poorest 20% of the population use government services less than people in the next two population bands. |
The Democrats believe that the level of poverty in Australia is unacceptable. The wealth gap between the rich and poor in Australia has grown over the past decade. Despite more than a decade of continual economic growth, this prosperity has left many in middle Australia standing still and many of the poorest worse off.
In recent times, the Government has even pushed through legislation which is directly contributing to higher poverty by reducing the incomes of many sole parents and people with disabilities.
Who is affected by Poverty?
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Indigenous Peoples
Aboriginal and Torres Strait Islander people continue to be the most disadvantaged group in Australia. More >> |
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Women and sole parents
Elderly single women and female sole parents are over represented in groups living on low incomes. More >> |
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Children
The rate of poverty amongst children is 9.5 per cent, indicating that almost half a million children are living in poverty. More >> |
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Young people and students
Poverty among young people is now so widespread that Governments must consider urgent action that goes beyond current policies. More >> |
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People with disabilities
Poverty is particularly prevalent amongst people who have a disability. More >> |
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Migrants and Refugees
Migrants and refugee communities face multiple disadvantages upon their arrival in Australia. More >> |
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The Ageing population
Australians aged over 65 years are concentrated at the bottom of the income spectrum. More >> |
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Homeless People
The estimated number of homeless people in Australia on Census night in 2001 was 100 000. More >> |
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Rural and Regional communities
The factors influencing disadvantage in these communities include limited employment opportunities and a lack of services. More >> |
The main contributors to Poverty
The link between employment status and poverty for those of workforce age is well established. This has been one of the driving forces behind Government reform of income support for workforce age people over the last 15 years. However Peter Saunders of the Social Policy Research Centre concluded after reviewing the research that:
“Overall, the results demonstrate that unemployment continues to be a major cause of poverty in Australia and that employment only provides an escape when it comes in the form of a full-time job. Because many of the new jobs created over the last two decades have been either part-time or casual, they have not been sufficient, by themselves, to protect workers and their families from poverty”. [17]
The importance of employment in the poverty picture is also emphasised in a major survey of poverty in Australia published in 1998.
“Some quite remarkable dynamics lie behind the trends linking poverty and unemployment. One factor is the failure of the economy to generate an adequate supply of full-time jobs and, as a result, there has been a persistent rise in unemployment and in the duration of unemployment since 1973. Other factors are the growth of hidden unemployment and the changing industry and occupational structure of jobs”.[18]
Other major factors canvassed were:
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Life-cycle effects on poverty with maximum income in the middle years and greatest vulnerability when young and old. Old age has become less problematic over time but child poverty has persisted; |
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Geographical variations in the incidence of poverty are significant, with a congregation of low-income people in declining industrial areas and work-poor rural areas; |
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Housing tenure has been linked to poverty with those excluded from home ownership facing uncertain housing security; |
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Health status correlates with poverty with those facing the greatest socio-economic disadvantage having the poorest health; |
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Low levels of educational attainment and poverty correlate closely; and |
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Indigenous people have consistently faced higher levels of poverty than the population in general. |
The poverty rate for people living in capital cities was 10.5 per cent in 2001, lower than for those living in other areas of the states and territories which sat at 12 per cent.
However, due to the concentration of Australia’s population living in capital cities, almost six in ten poor Australians live in capital cities, Therefore, strategies for targeting poverty needs to assist those living in cities as well as in regional areas.
What Inquiries have there been into poverty?
The inquiry that put poverty on the political map in Australia was the Commission of Inquiry into Poverty headed by Professor Ronald Henderson. It reported in 1975 and underpinned a lot of Government action over the following 20 years.
Among the more recent is a Senate Community Affairs Committee inquiry, which issued the report, A hand up not a hand out: Renewing the fight against poverty, Report on poverty and financial hardship, in March 2004.
The Senate committee made 95 recommendations for government policy which it believes would provide hope for those Australians living in poverty. The recommendations (amongst other things) include:
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developing a national jobs strategy; |
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bringing a particular focus on improving assistance to young people making the transition from school to work, training or further education to prevent life-long disadvantage; |
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conducting an inquiry into the nature and extent of low-paid employment, the problem of casualisation and employment security, skills shortages and the wages and conditions for contract labour; |
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guaranteeing six months paid work experience in the public or community sector for those who have been unemployed for more than two years; |
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providing employment security and social mobility to casual and part-time workers through strengthening their employment entitlements, and; |
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poverty-proofing the minimum wage by linking it to adequate standards of living. |
The report also recommends the development of a National Poverty Strategy to harness the political will that would be necessary to comprehensively fight the problem. A National Poverty Strategy would involve government and key interest groups to highlight the importance and nature of the issues raised by poverty and poverty of opportunity, and to agree on a broad plan of action.
To achieve this, the committee recommended that a statutory authority be established that would report directly to the Prime Minister. This authority would develop, implement and monitor the National Poverty Strategy, develop poverty reduction targets against a series of anti-poverty measures, and report regularly to Parliament on its progress.
Democrats recommendations
The Democrats were pleased at the tabling of the report to see that many of the recommendations of the report mirror long held Democrat policies.
We are repeating our call on the Government to particularly focus on Recommendations 94 and 95 to ensure real solutions are found to this problem and to implement them as soon as possible.
Recommendation 94 [20]
That a comprehensive anti-poverty strategy be developed at the national level and that this involve:
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an initial summit of Commonwealth, State and local governments, the welfare sector, unions, the business sector, community groups, income support customers and relevant experts in the field to be held to highlight the importance of the issue and agree on a timetable for action; |
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a commitment to achieve a whole of government approach. That is, coordinated action across policy areas such as employment, health, education, income support, community services, housing and other relevant areas to reduce poverty and poverty of opportunity; |
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not longer than a 12-month period of consultation.
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Recommendation 95
[21]
That a statutory authority or unit reporting directly to the Prime Minister be established with responsibility for developing, implementing and monitoring a national anti-poverty strategy and that this entity:
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establish benchmarks and targets to measure progress against a series of anti-poverty objectives; |
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report regularly to the Parliament on progress against the strategy; and |
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undertake or commission research into a range of poverty-reduction measures. |
Who is affected by Poverty?
Indigenous Peoples
Aboriginal and Torres Strait Islander people continue to be the most disadvantaged group in Australia. The legacy of over two centuries of colonisation has seen Aboriginal and Torres Strait Islander Peoples subjected to widespread discrimination, rampant dispossession of lands, territories and resources, exclusion and marginalisation. Commonwealth and State laws have effectively denied Indigenous Peoples adequate protection through the constant refusal to adopt and put into practice relevant human rights standards. Many of Australia's Indigenous peoples are not only marginalised, they are also politically disenfranchised and entrenched in poverty.
It is estimated that Indigenous people are approximately two to three times more likely to be impoverished than the non-indigenous population, irrespective of the measurement mechanism used.
An ATSIC submission to the 2004 Senate inquiry into Poverty stated that about 30 per cent of Indigenous households are in income poverty, which indicates that over 120,000 Indigenous people are living below the poverty line [1]:
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Indigenous unemployment rates, are well over twice that of non-Indigenous people in cities and regional centres and are much higher in remote areas. |
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Being fully engaged in either employment or education decreases the likelihood of poverty. Indigenous people in full-time employment or education are around 30 per cent of each age cohort, compared to at least 50 per cent of non-Indigenous people in each age cohort. |
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The proportion of Indigenous teenagers (aged 15 to 19 years) not fully engaged in work or education is three times that of non-Indigenous people. Approximately 70 per cent of young Indigenous adults (aged 20-24 years) are not fully engaged with work or education. |
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Approximately 50 per cent of Indigenous adults are reliant on some form of welfare payment and for young people (aged 15 to 24 years) the proportion is only slightly lower. |
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As sole parents are vulnerable to poverty, it is of concern that a relatively high proportion of young Indigenous are currently receiving the single Parenting Payment - upwards of 15 per cent of young Indigenous women (compared with around 4 per cent of non-Indigenous women). |
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Indigenous people suffer ill-health and disability at greater rates than non-Indigenous people. This leads to life expectancy rates for Indigenous people being around 20 years less than non-Indigenous rates. Ill-health impacts significantly on work opportunities and places a burden of care on individuals and communities. |
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Families relying on public or private rent are more vulnerable to poverty. For Indigenous people nearly 70 per cent are housed in some form of rental property. |
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Some remote Indigenous communities live in absolute poverty, with by poor infrastructure and associated diseases that are largely eradicated in other parts of Australia. |
The Democrats are committed to playing our part in closing the gap between Indigenous and non-Indigenous Australians.
Women and sole parents
Elderly single women and female sole parents are over-represented in groups living on low incomes.
| A NATSEM paper[2] indicates that poverty rates for men and woman are very similar - 12 per cent for women and 12.5 per cent for men. This is a significant improvement in the poverty rate experience by women and is primarily attributed to the improved position of some sole parents. In the past, sole parents had contributed significantly to a high female poverty rate. In addition, ’the rising tide of poverty among single people younger than retirement age seems to be impacting more on men than women’[3]. |
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While the position of women has improved, there are still considerably more poor women in sole parent families than there are men (104,000 compared with 34,000) and there are 106,000 poor single women over 65 as compared with 40,000 men in this group in 2000.
The key causes of poverty among women, particularly female sole parents, are:
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the continuing inequality of wage levels, with women’s wages still being generally lower than those of males; |
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the nature of the work which women are more likely than males to do, which is more likely to be part-time or casual or precarious in nature; |
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the high costs of child care; |
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the high costs of education; |
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a lack of access to affordable housing; |
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insufficient income support for the needs of many sole parent families; |
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the impact of ’shared-care’ changes to the Family Tax Benefit; and |
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lack of wealth accumulation during working life to support retirement incomes. |
The Democrats have a proud record of defending the rights of Australian women. We have long campaigned for change in all of these areas: calling for action on the gender pay gap, increased rights and job security for casual workers, policies to help women in the workforce balance their work and family lives (such as paid maternity leave, the right to return to work part-time after maternity leave, and more affordable and accessible child care). We support publicly-funded education at all levels, and have opposed every attempt to introduce or increase fees and charges for education. We have also fought hard for improved income support arrangements for sole parents and students.
Children
The rate of poverty amongst children is 9.5 per cent, indicating that almost half a million children are living in poverty[4].
Children in poverty have their quality of life and opportunities eroded. Children living in poverty often miss out on experiences that many other Australian children enjoy - entertainment, participating in sport or clubs, taking music and dance lessons. Treats or little luxuries that provide much needed enjoyment or relief for a family under pressure are not an option for a family choosing what bill to pay and what food they can afford to purchase[5].
Of most concern are the poor educational achievements and diminished opportunities suffered by children in poverty. The research indicated that children living in poverty have reduced cognitive development and score lower IQs, the latter being particularly apparent for children exposed to poverty early in life. There are problems in adjustment and lower school achievement.
Children in poverty often feel different from their peers. Isolation and exclusion reinforce poor social skills. |
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The Democrats have consistently voted against legislation that may unfairly impact on the welfare of children. We support the United Nations Convention on the Rights of the Child which advocates for the interests of the child to always be placed first.
Young people and students
Poverty among young people is now so widespread that Governments must consider urgent action that goes beyond current policies.
More than 145,000 people aged 15 to 24 are living in poverty and big increases in part-time and casual work are creating a new class of working poor whose incomes do not cover their living costs and work-related expenses[6].
The divide between the haves and have-nots in the 15 to 24 age group is growing, with more becoming entrenched in poverty. While Australia has enjoyed prosperity in recent years, young people have not shared in this and welfare systems fail to reflect the tightening employment and income realities.
The Australian labour force has risen 16 per cent in the past decade but 15- to 19-year-olds' share has risen only 5 per cent, and for the 20 to 24 age group, the job participation rate has fallen 8 per cent.
The common contributors to poverty include unemployment and social isolation, the decline in bulk billing by doctors, increases in food and studying costs and the ease with which the unwary get caught by heavy loan repayments.
The Democrats believe that there needs to be partnerships involving not just governments but also business and community groups to tackle youth poverty.
Since 1992, the Australian Democrats have conducted an annual Youth Poll that highlights the attitudes and opinions of young people on a diverse range of important issues. The poll asks questions in areas including demographic information, employment, health, education and training, entertainment and national and state issues.
The Democrats are the only party in Australia to conduct such a poll and continue to recognise the contribution young people have to make to Australia's political process.
People with disabilities
Poverty is particularly prevalent amongst people who have a disability. People with disabilities have lower workforce participation rates and are more likely to be unemployed than many other groups in the population.
In addition to less opportunity to earn an adequate income, people with disabilities often have higher costs of living associated with their disability. This may include the high cost of medication, the purchase of special equipment or aids, and access to appropriate housing, transport and services related to personal care or maintenance of a person's home. The combination of higher costs of living, along with low income, leads to a strong connection between disability and poverty[7].
Studies have estimated that 26.7 per cent of households headed by 'sick' or 'invalid' persons were in poverty before housing costs in 1996 - this declines to 6.2 per cent after housing costs[8]. In addition to this is must be noted that many people with a disability are dependent on family members for care and support, which in turn impacts on the ability of these carers to participate in the labour market with many carers being forced to either leave the job market or reduce their hours of work.
The Democrats believe that people with a disability have the right to appropriate housing, education, work opportunities, support services, respite, physical access and the right to participate equally in all aspects of society.
Migrants and Refugees
Migrants and refugee communities face multiple disadvantages upon their arrival in Australia. This can be compounded by a lack of knowledge about services and culture, experiences with discrimination and racism, problems with the recognition of pre-existing skills and greater challenges in finding employment. Some refugees also start life in Australia with an enormous debt to the Commonwealth due to the appeals process or even their stay in detention.
The unemployment rate is generally above the national average in all visa categories except for those on business visas and is worst amongst humanitarian visa holders[9]. The two year waiting period for income support also puts migrants at greater risk of poverty. Many people on Bridging Visa E's (BVE) are even more disadvantaged, as their visa does not entitle them to any work rights or any medical services.
The difficulties some refugees experience can be compounded by the following:
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trauma and depression due to persecution in their homeland, followed by a traumatic and dangerous trip to get to Australia and compounded by time spent in detention; |
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depression and despair over apparent indefinite separation from spouse and children; |
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uncertainty about the future due to uncertainty of their visa status; |
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alienation from the Australian community because of perceived views on detainees and an acute absence of support programs which they can access; and |
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poverty as a result of difficulties in obtaining employment without access to language and job seeker programs, recognition of overseas qualifications, or local labour market experience (this is also relevant to migrants). |
The Democrats are strong supporters of the abolishment of the Temporary Protection Visa (TPV). We believe this is an unnecessarily cruel and system which keeps refugees in limbo. Senator Bartlett has tabled a number of Private Senator's Bills aimed at removing the injustices present in the Migration Act 1958.
The Ageing population
Australia has a growing ageing population. Australians aged over 65 years are concentrated at the bottom of the income spectrum with older Australian households making up 43 per cent of all low-income households[10]. The older members of our population have been and continue to be vulnerable to age discrimination and long term unemployment. Pensioners who are not home owners often live in poverty of are substantial risk of it.
Factors that contribute to an increased risk of poverty for people aged 50 to 64 years include unemployment and underemployment; dependent family members; and inadequate income support. For the 65 plus age group, factors relate to inadequate retirement income; increasing housing costs; ill health and disability[11].
Many aged Australians look back on lifetimes in low paid work, part-time or casual work or, for women, an interrupted working life. Often older workers have found themselves on the job market quite late in life as a result of changes in industry and a generally negative view of older workers. Older Australian workers must have the opportunity to access training opportunities and skill recognition services so that they may improve their employment prospects.
Many older Australians have not had the opportunity to build assets through the purchase of a home or through superannuation. They are fully dependent on government income support; they are particularly vulnerable to the fluctuations of the rental market; and they often face high costs through ill health and special needs[12].
The Democrats believe that the Commonwealth must do the following:
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increase support for educational and other programs which will enable older Australians to remain active members of the workforce; |
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review the special needs of ageing carers in relation to retirement income and income support; and |
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provide additional funding for programs which provide support services for the aged homeless including additional funding to ensure adequate access to aged care accommodation. |
Homeless People
Since the 1980s the issue of homelessness has been the subject of several significant reports. A major report by the Human Rights and Equal Opportunity Commission into youth homelessness highlighted the plight of homeless youth, estimating that there were at least 20 000 to 25 000 homeless children and young people nationally at that time[13].
Causes of homelessness include various personal, social and economic circumstances over which homeless people often have very little control.
The estimated number of homeless people in Australia on Census night in 2001 was 100 000, with the levels of women, more young people, and a significant minority of families rising. Their data also indicates that the homeless population 'has increased over the past 40 years, but there is no quantitative data on the rate of increase'[15]. |
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Rural and Regional communities
The factors influencing disadvantage in rural and regional communities include limited employment opportunities which in turn lead to underemployment and joblessness, and a lack of public and private services and facilities, particularly transport and other social services.
The Democrats agrees with the Senate Inquiry into Poverty that[16]:
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access to government services in such areas as health, education, housing and transport as well as other community services, such as banking, needs to be expanded in many regional areas to provide the necessary social infrastructure to enable these communities to function effectively; and |
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Governments should play a key role in building up the economic infrastructure of these communities by developing national public infrastructure development projects, and maintaining and extending regional development and other job creation strategies. It is only by concerted and sustained action that the urban-regional economic and social divide can be overcome. |
Notes
| [1] |
Senate Community Affairs References Committee Inquiry, submission 244, Aboriginal and Torres Strait Islander Corporation |
| [2] |
NATSEM, pg 5 |
| [3] |
Harding, A, Lloyd, R & Greenwell, H, Financial Disadvantage in Australia 1990 to 2000: The persistence of poverty in a decade of growth, Smith Family, 2001, pg15. |
| [4] |
NATSEM, pg 4. |
| [5] |
Senate Community Affairs References Committee Inquiry, Chapter 11, pg 12. |
| [6] |
Senate Community Affairs References Committee Inquiry, submission 169, Mission Australia. |
| [7] |
Senate Inquiry, Submissions 158, pp.9-10 (Disability Action); 256, ppgs.2-5 (People with Disability Australia); 125, p.i (SANE Australia); 163, p.141 (ACOSS). |
| [8] |
King A, 'Income poverty since the early 1970s' in Fincher R & Nieuwenhuysen J eds., Australian Poverty: Then and Now, Melbourne University Press, 1998, pg.88. |
| [9] |
Senate Inquiry, Submission 153, pg.4 (Immigrant Women's Speakout Association of NSW). |
| [10] |
Senate Inquiry, Submission 172, ppgs.22,30 (Smith Family). Analysis based on equivalent disposable income for each household using the OECD equivalence scale. |
| [11] |
Senate Inquiry, Chapter 15 |
| [12] |
ibid |
| [13] |
Human Rights and Equal Opportunity Commission, Our Homeless Children: Report of the National Inquiry into Homeless Children, 1989. |
| [14] |
Australian Bureau of Statistics, 2001 |
| [15] |
Counting the Homeless, ppgs.1-8 |
| [16] |
Senate Community Affairs and references committee inquiry, chapter 14. |
| [17] |
Saunders, P, ‘A Perennial problem, Employment, Joblessness and Poverty, January 2006, SPRC Discussion paper no. 146 |
| [18] |
Gregory, B and Sheehan P, ‘Poverty and the collapse of full employment’, in Fincher R. and Nieuwenhuysen J. Australian Poverty: then and Now, 1998, pg.104. |
| [19] |
Senate Inquiry, pg xxii |
| [20] |
Senate Inquiry, pg xxxix |
| [21] |
ibid |
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