Current Issues
The Poor in Australia: Who Are They and How Many Are
There?
E-Brief: Online Only 22 August 2002
Dale Daniels,
Analysis and Policy
Social Policy Group
This brief is intended to provide easy access to recent material
on the extent of poverty in Australia, the characteristics of those
in poverty and some recent international comparative studies. The
Australian material usually draws on data that is only a few years
old. The international studies tend to use data that is somewhat
more dated owing to the difficulties of getting comparable data
from many countries.
Poverty Lines
In Australia there is no official measurement of the extent of
poverty. Estimates are made from time to time by researchers in
various organisations that study social policy issues. Generally
poverty measurement is concerned with income poverty. A judgement
is made about what amount of income is needed by families of
differing compositions and Australian Bureau of Statistics survey
data is used to estimate how many income units or individuals fall
above or below that income level. Clearly the derivation of that
income level or poverty line is quite crucial in this method of
estimating the extent of poverty.
Henderson poverty line and alternatives
Until recently the most common method for arriving at a poverty
line was that developed by Professor Ronald Henderson in the early
1970's. It was used by the Commission of Inquiry into Poverty and
has been widely used since then. Updates of the Henderson poverty
line are available here.
More recently alternative poverty lines have become quite widely
used due to concerns amongst poverty researchers about the way that
the Henderson poverty line has been updated over time. In
international comparative studies, poverty lines are usually set at
some proportion of median or average income. This practise is now
fairly common in Australian poverty research.
Absolute and relative poverty
It should be noted that estimates of poverty are generally
estimates of relative poverty. They estimate how many families have
low incomes relative to other families. The alternative, absolute
poverty, would be measured by estimating the numbers of families
who cannot provide the basic necessities such as housing, food or
clothing.
Poverty Gaps
Poverty line based research is not the only type of poverty
research that occurs. Poverty gaps are estimated to indicate the
amount of money needed to bring those below the poverty line above
it. This gives an added dimension to estimating the extent of
poverty.
Further Reading
Further discussion of these and other issues around the
measurement of poverty can be found in:
Ann Harding and Aggie Szukalska,
Financial Disadvantage in Australia - 1999: The Unlucky
Australians?, a report commissioned from NATSEM by The Smith
Family, 14 November 2000. See pages 25 to 39.
Peter Saunders, Defining Poverty and
Identifying the Poor: Reflections on the Australian Experience,
Social Policy Research Centre Discussion Paper no. 84, June
1998.The history of poverty research in Australia is covered along
with recent developments
Harry Greenwell, Rachel Lloyd and Ann Harding,
An Introduction to Poverty Measurement Issues, NATSEM
Discussion Paper no. 55, December 2001, published 23 January
2002.
Geoff Winter, Measuring
the Numbers of People in Poverty, Parliamentary Library
Statistics Group Research Note 31 1999-2000, 30 May 2000
Starting in 2000 the Smith Family began to publish reports on
poverty in Australia on a regular basis. The second of these
reports prompted an extensive debate about the extent of poverty
and how it is measured. The reports and some key contributions to
the debate are listed below.
Ann Harding and Agnieszka Szukalska, Financial
Disadvantage in Australia - 1999: The Unlucky Australians?, a
report commissioned from NATSEM by The Smith Family, 14 November
2000.
The report uses the half-average income poverty line and covers:
- trends in poverty since 1982 by family type
- poverty by educational attainment and labour force status
- poverty by family type and age
- poverty and housing
- the poverty gap
Part B covers methodological issues and compares alternative
poverty lines.
Ann Harding, Rachel Lloyd and Harry Greenwell, Financial
Disadvantage in Australia 1990 to 2000: the Persistence of Poverty
in a Decade of Growth, a report commissioned from NATSEM by the
Smith Family, 28 November 2001.
The report uses a half average income poverty line and covers:
- trends in poverty since from 1990 to 2000 by family type
- poverty by educational attainment and labour force status
- poverty by family type and age
- poverty and housing
- poverty by State
- the poverty gap
Parts B and C cover methodological issues and compare
alternative poverty lines.
Kayoko Tsumori, Peter Saunders and Helen Hughes, Poor
Arguments: A Response to the Smith Family Report on Poverty in
Australia, Centre for Independent Studies Issues Analysis no.
21, 16 January 2002.
Peter Saunders, Poor
Statistics: Getting the Facts Right about Poverty in Australia,
Centre for Independent Studies Issue Analysis no. 23, 3 April
2002.
These two papers provide a critique of the Smith Family report
by the Centre for Independent Studies (CIS). Peter Saunders is the
Director of Social Policy Research at the CIS. (There are two
researchers in this field with the same name. One is Peter Saunders
who heads the Social Policy Research Centre at the Uni of NSW and
the other is the author of this paper). His team questions the
choice of poverty line used and the trends in poverty suggested by
the Smith Family Report.
Peter Saunders,
Getting Poverty Back onto the Policy Agenda, Smith Family
Research and Social Policy Briefing Paper no. 10, March 2002.
Peter Saunders Director of the Social Policy Research Centre
(SPRC) at the University of NSW, wrote this critique of the CIS
position.
Ann Harding,
Research Highlights a Nation Growing Apart, Australian, 25
February 2002.
Ann Harding Director of NATSEM puts the poverty estimates in a
broader context and comments on the CIS criticisms.
Ann Harding and Agnieszka Szukalska,
Social Policy Matters: The Changing Face of Child Poverty in
Australia, 1982 to 1997 98, paper presented at the 7th
Australian Institute of Family Studies Conference 26th July
2000.
This paper provides the most recent look at child poverty.
Trends from 1982 to 1997-98 are estimated.
R G Gregory, Children and the Changing
Labour Market: Joblessness in Families with Dependent Children,
Centre for Economic Policy Research Discussion Paper no. 406,
August 1999.
This paper looks at the link between unemployment and child
poverty.
R Lloyd, A Harding, and H Greenwell,
Worlds Apart: Postcodes with the Highest and Lowest Poverty Rates
in Today's Australia, paper prepared for the National Social
Policy Conference, Sydney, July 2001.
This paper provides a regional perspective on poverty.
Ann Harding, Rachel Lloyd, Otto Hellwig and Geoff Bailey,
Building
the Profile: Report of the Population Research Phase of the
Australian Capital Territory Poverty Project, a report
commissioned from NATSEM by the ACT Poverty Task Group, 13 December
2000.
This paper looks at poverty in the ACT in 1999.
B Hunter, Three
Nations, Not One: Indigenous and Other Australian Poverty,
Working Paper no. 1, Centre for Aboriginal Economic Policy Research
(CAEPR), 1999.
This paper measures the extent of poverty amongst indigenous
people and explores measurement issues, as well as examining the
indigenous experience of poverty and strategies for tackling
indigenous poverty.
Luxembourg
Income Study (LIS) Key Figures
The LIS website contains useful basic comparative data on
poverty in the countries included in the study. Relative
Poverty Rates for the total population, children and the
elderly are included.
A table showing poverty
rates for children by family type is also provided.
Stephanie Moller, David Bradley, Evelyne Huber, Francois
Nielsen, and John D Stephens, The State
and Poverty Alleviation in Advanced Capitalist Democracies,
Luxembourg Income Study Working Paper no. 278, August 2001.
This paper analyses the impact of the state on the incidence of
poverty in the working-age population of fourteen advanced
capitalist democracies between 1970 and 1997.
Bruce Bradbury and Markus Jantti, Child
Poverty Across Industrialized Nations, UNICEF Innocenti
Occasional Papers, Economic and Social Policy Series no. 71,
1999.
This paper estimates of patterns of child poverty for
twenty-five nations using data from the Luxembourg Income Study. An
analysis of the sources of variation in child poverty across the
nations studied is also provided.
For copyright reasons some linked items are only
available to Members of Parliament.
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