. The following information provides Members and Senators with a brief overview of the situation with regard to poverty in Australia.
What is poverty?
The concept of poverty is difficult to define and, thus, to measure. While there are a number of different and frequently competing conceptions of poverty, these concepts appear to share one element in common. People who live in poverty live in a state of deprivation, a condition in which their standard of living falls below some minimum acceptable standard.
Poverty can be broadly defined in absolute or relative terms. Absolute poverty refers to people who lack even the most basic of life’s requirements. It is measured by estimating the numbers of individuals or families who cannot provide for the necessities of life such as housing, food or clothing. With the exception of a very small number of Australians—most specifically, a significant proportion of Indigenous Australians—such a definition does not apply in Australia.
Instead, most poverty in Australia is generally understood to be relative poverty. According to this definition, people are considered to be in poverty if their living standard falls below an overall community standard, and they are unable to participate fully in the ordinary activities of society.How is poverty measured?
There is no official measurement of the extent of poverty in Australia.
Most Australian estimates of poverty are of relative poverty. They estimate how many families have low incomes relative to other families. Absolute poverty is measured by estimating the number of families that are unable to provide the basic necessities such as housing, food or clothing.
Income-based measures have typically been used as measures of relative disadvantage for two main reasons. Firstly, it may be assumed that some minimum level of resources is required for people to attain an acceptable standard of living, and income is arguably the best indicator of the resources available to an individual. Secondly, income-based measures are useful on practical grounds, in that household income information is typically easier to obtain than information on other types of resources.
Until relatively recently, the most common method for arriving at a poverty line (that is, a level of income below which individuals and families may be said to be in poverty) was that developed by Professor Ronald Henderson in the early 1970s. However, due to concerns about the way the Henderson poverty line
has been updated over time, and increasing dissatisfaction with single income-based measures of poverty, the general focus has now shifted to developing indicators of social exclusion.
The Gillard Government is currently developing indicators of social exclusion as a part of its social inclusion agenda
. These indicators measure disadvantage across a range of different areas, such as health, education, attachment to the labour market and access to housing and other services—and not just in relation to income. The Social Policy Research Centre
and the Melbourne Institute of Applied Economic and Social Research
have also recently published research papers that attempt to define indicators for the measurement of poverty, deprivation and social exclusion.How many Australians are in poverty?
There is no consensus regarding the number of Australians in poverty or, indeed, how to measure this. Periodically, researchers from various organisations generate estimates of poverty. These estimates vary widely and are frequently contested.
According to one relatively recent attempt
to calculate poverty in Australia, based on 2005–06 Australian Bureau of Statistics (ABS) Survey of Income and Housing data, and with the poverty line set at half of median equivalised disposable income, there were 2,163,714 Australians living under the poverty line. This suggests that almost one in every nine Australians lived in income poverty at 2005–06. This figure is broadly consistent with a number of other estimates which have it that around ten percent of Australians are in poverty at any one time.Who does poverty affect?
A range of different studies into poverty and deprivation in Australia has identified that poverty is more likely to occur among particular groups in the population than others. Generally speaking, according to the Senate Community Affairs References Committee’s 2004 Report on poverty and financial hardship
, the major groups in which poverty is most likely to be prevalent include:
• Indigenous Australians
• people who are unemployed
• people dependent on government cash benefits
• sole parent families and their children
• families that have three or more children
• people earning low wages
• people with disabilities or those experiencing a long-term illness
• aged people, especially those renting privately
• young people, especially in low income households
• single people on low incomes
• people who are homeless, and
• migrants and refugees
The group that faces the greatest risk of poverty among all Australians is Indigenous Australians. Indigenous Australians continue to suffer from high levels of joblessness, low levels of formal education, poor health, inadequate housing and the experience of dispossession and racism.
A noteworthy characteristic of poverty in Australia is that, increasingly, it is no longer confined to those people who are not employed, or who live in a household where adults are unemployed. With the increased casualisation of Australia’s workforce in the last two decades many more Australians have become ‘working poor’. Characteristically, these low-paid workers’ employment is insecure and, as a result, they tend to ‘churn’ through a series of low-paid jobs, interspersed with periods of unemployment.What is the Government doing to tackle poverty in Australia?
Broadly speaking, the Gillard Government’s main policy approach to dealing with the problem of poverty is through the implementation of its social inclusion agenda
The concept of poverty focuses primarily on financial well-being, consumption and income adequacy. Social exclusion, on the other hand, refers to lack of opportunity to participate in social, economic and/or political life. In keeping with this broader understanding of disadvantage, social exclusion is viewed as being the result of a combination of interrelated problems like unemployment, limited education, low income, poor housing, poor health and family breakdown. It is dynamic in that it affects different people in different ways and at different times in the life cycle.
The Government’s social inclusion agenda has involved the establishment of a Social Inclusion Board and a Social Inclusion Unit in the Department of the Prime Minister and Cabinet, and a Minister for Social Inclusion. The Government has also identified a number of ‘early priorities’ for social inclusion. These include: supporting children at greatest risk of disadvantage; jobless families with children; locational approaches to disadvantage; addressing homelessness; closing the gap for Indigenous Australians; cultural diversity; and, employment for people living with a disability or mental illness.
A compendium of social inclusion indicators
is intended to help the Australian Social Inclusion Board to develop measures of social inclusion that are to guide future social policy.
This agenda and its related initiatives are to augment a range of existing policies and services for tackling poverty and disadvantage—policies and services that have been supported or introduced by successive governments. These policies and services may be divided into two broad, and related, areas: policies and services that seek to deal with poverty through increasing labour force participation and decreasing reliance on income support; and, policies and services that provide a social safety net for those who are unable to work.
Policies and services for addressing poverty include:
• support for families with children through Family Tax Benefit and subsidies for child care
• education and training programs, including
– support for schools in areas of socio-economic disadvantage
– Youth Allowance, Austudy and ABSTUDY and higher education scholarships
• health services targeted at ‘at risk’ populations and at chronic disease (which is experienced far more by disadvantaged people)
• homelessness initiatives, and especially the Supported Accommodation Assistance Program (SAAP)
• housing affordability initiatives, including public housing provided through the National Affordable Housing Agreement.