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9 Concerning Findings from the ACOSS Poverty in Australia Report

Child looking through window - Dan Romeo

Every two years the Australian Council of Social Service (ACOSS) realises a report that presents us with a detailed picture of poverty in our country. Produced in partnership with the Social Policy Research Centre at the University of NSW, the Poverty in Australia report is a must read for anybody concerned with social justice.

Published last week to launch Anti-Poverty Week, we strongly recommend taking the time to read the report in detail. But for those of you who don’t have time to go through the whole document we’ve distilled it down to 9 key and concerning findings.

Despite more than 25 years of economic growth, three million Australians live below the poverty line

 

Earlier this year Australia celebrated 25 consecutive years of economic growth. There are few countries in the world – let alone the developed world – who can boast of such an achievement; however, the fruits of this prosperity have not been evenly shared across the community.

According to ACOSS there are now three million Australians living below the poverty line. Even without such a sustained run of economic growth this figure would be a concerning, but when you consider the overall state of the nation’s economy, it’s nothing short of shocking.

But what exactly is the report’s definition of ‘poverty’? According to ACOSS poverty is “defined to exist when a household’s income is so inadequate as to preclude them from having an acceptable standard of living. In practice, it is often identified when people are unable to afford socially perceived necessities – things that a majority in the community agrees that no-one should have to go without.”

The below table outlines poverty lines by family type as defined by the report.

ACOSS - Poverty Definitions2

We only need to look in our own backyard to realise that there’s a good chance this figure will grow by the time the next report is released.

The loss of automotive manufacturing jobs in northern Adelaide alone is estimated to be in excess of 6,800, but that only accounts for the cutting of direct automotive manufacturing jobs. In total, South Australia will lose approximately 23,900 jobs due to car industry closures.

The number of jobs to be lost and the consequent unemployment and flow-on effect in the surrounding communities is a debilitating legacy for those directly affected. And for the next generation coming through things will be particularly tough, as it’s currently hard for young people to see a future for themselves in which they are securely employed.

More than 730,000 Australian children live below the poverty line

 

Probably the most concerning of the report’s findings is the revelation that more than 730,000 Aussie kids are living below the poverty line.

This alarming finding has grabbed the media’s attention; and to be honest, this really is the report’s ‘golden egg’.

According to ACOSS this signifies a two percentage point rise in the number of children living in poverty when compared to data from 2003-04.

Children in single parent families are three times more likely to live in poverty than kids with two parents

 

Nearly half of the 730,000 children who live below the poverty line come from sole parent households.

As the report states, “children in lone families are more than three times more likely to be living in poverty than their counterparts in couple families, with a poverty rate of 40.6% compared to 12.5%.”

ACOSS - Child Poverty

More than half of all Newstart recipients live below the poverty line

 

While there’s been much demonisation of our welfare system in recent months, with Social Services Minister, Scott Porter recently criticising the system for being too generous, the Poverty in Australia report paints quite a different picture.

Despite what the Federal Government has been saying, there hasn’t been an increase to Newstart (in real terms) since the mid-1990s. When compared to the wage increases that Australian workers have enjoyed over that same period (see the graph below), pay rises for Newstart recipients have been miniscule.

So with this in mind it isn’t all that surprising that 36% of people who currently receive social security payments are living below the poverty line, including 55% of those receiving Newstart Allowance.

Our recent Rental Affordability Snapshot showed us just how challenging living on Newstart is for South Australians. The snapshot found that of the more than 3,900 Adelaide properties available for rent at the time, not a single one was affordable for someone living on Newstart.

So despite the Federal Government’s rhetoric the data shows that a number of social security payments fall well below the poverty line. And this is extremely concerning, as it strongly underscores the growing inequity between the waged and the jobless in Australia.

ACOSS - payments

57% of all people who live in households below the 50% poverty line received social security payments as their main source of income.

 

The fastest and most sustainable way to get out of poverty is to get a full-time job. Now, while this may seem like a no brainer, the data makes it all the more obvious.

More than half of all people who live below the poverty line are primarily living off of some form of social security payment.

Unemployed people are the most likely group of people to be living below the poverty line and according to ACOSS, “the high rate of poverty among unemployed people partly reflects the level of the Newstart Allowance which in December 2013 – the mid point of the SIH survey – was $316.75 per week for a single person with no children (including rent assistance).”

ACOSS - labour force

Just under half of all recipients of the Disability Support Pension are living in poverty

 

Arguably the most shameful finding of the all is the discovery that so many disabled Australians are struggling to make ends meet.

While we all know that people with a disability tend to have poorer employment outcomes, it’s disappointing that our social security system doesn’t properly take this into consideration when calculating the disability support pension.

ACOSS believes that the introduction of the Welfare to Work policies of 2006 were a major contributor to forcing disabled people below the poverty line. This Howard era policy saw a large number of disabled Australians assessed as having a ‘partial work capacity’ (at least 15 hours or more per week).

This controversial policy shift forced many disabled Australians off of the Disabled Pensions and onto Newstart. According to Rick Morton from the Australian, “the Newstart Allowance is $173 weekly less than the pension.”

Only 15.5% of people living below the poverty line were homeowners

 

Just as full-time employment is a pretty reliable insurance policy against poverty, so is home ownership.

With only 15.5% of home owners in Australia living below the poverty line, the Poverty in Australia report reveals that the vast majority of Australians doing it tough are living in private rentals.

As ASCOSS’ findings reveal, “the majority of people living below the poverty line were renters (59.7%), including 44.2% in private rental and 11.4% renting publicly. While public tenants are a smaller group than private tenants, their high risk of poverty (48.4%), compared with 21.9% for pivate renters, indicates that they are deeply financially disadvantaged.”

ACOSS - Housing

Australia’s 2014 poverty rate ranks 14th highest out of 36 OECD countries

 

In line with the historical contempt that we feel towards ‘tall poppies’, we’re remarkably average when it comes to keeping our citizens living above the poverty line.

Yeah we’re outperforming big brother, the United States, but we’re not performing as well as we should be. After 25 years of sustained economic growth – something that no other developed country has achieved over the course of the same period (1991 – 2016) – we should be trending closer to our Scandinavian counterparts when it comes to our poverty ratios.

Check out the OECD’s Social Expenditure Database to see how we compare to other OECD countries when it comes to ‘public social spending’ and/or ‘total net social spending’.

ACOSS - OECD comparison

Almost half of people in households receiving the Parenting Payment are living below the poverty line

 

Times are tough for those Australians who receive the Federal Government’s Parenting Payment.

The Poverty in Australia report has found that this particular demographic are not only more likely than most to be renters, but they are also more likely than other social security beneficiaries of working age to be out of work. According to ACOSS only one in three people who receive this particular type of payment are currently in work.

This is a lethal enough concoction as it is, but when coupled with the fact that the parenting payment currently stands at a measly $738.50 per fortnight (for single parents), it becomes all too easy to see why we have more than 730,000 children living below the poverty line.

Don’t be discouraged, there is cause for hope

 

Despite the fact that three million Australians are doing it tough, we are seeing some improvements.

The 2007-08 global financial crisis forced huge amounts of people across the developed world into poverty, and here in Australia, we were no different. During the tumultuous GFC period our headline poverty rate actually skyrocketed to 14.4%.

We’ve managed to bring this down to 13.3%, however, while we’ve made some good short-term progress we still have more people living in poverty today than we did in 2003-04.

 

Photography by: Dan Romeo

You can download the full report here: http://www.acoss.org.au/wp-content/uploads/2016/10/Poverty-in-Australia-2016.pdf