Poverty in Australia

Poverty in Australia is a contentious political issue. There is little doubt there is absolute poverty in Australia especially in Aboriginal communities.

However many on the Left of Australian politics argue that relative poverty ought to be the appropriate measure. This looks at the percentage of the population that earns well under average annual earnings. Many on the right of Australian politics argue that this relative measure is a mistake because it hides the existence of absolute poverty in Australia by looking only at those who, for whatever reason, earn relatively little.

The changing face of Poverty in Australia

Since 1990 the notion that “the rich are getting richer and the poor are getting poorer” has gained increasing public and media attention. Often, different conclusions are reached depending on how poverty is measured. It is clear that Australia’s middle class is shrinking, and while the majority of those living in poverty are probably not becoming poorer in absolute terms, they are becoming more numerous. However, those in the bottom 5% of income earners in Australia have in fact become poorer over the past decade. Poverty in Australia today is complex and changing.

1994 - Poverty line

Australians living in poverty in 1994 was reported at 7.6% (1.36 Million). [The Age - August 30, 2007 - Howard in denial over poverty: Burrow - http://www.theage.com.au/news/National/Poverty-rate-is-not-rising-says-Howard/2007/08/30/1188067198083.html]

According to the census figures, Australias population in 1993 of 17.7 Million & 1995 of 18 Million [Australian Bureau of Statistics - 1350.0 - Australian Economic Indicators, Jul 1994 - http://www.abs.gov.au/ausstats/abs@.nsf/featurearticlesbyCatalogue/AB54F54B546C4197CA256FFC007C1AA4?OpenDocument]

2001 - Poverty line

According to the Smith Family in 2001.

#13.0% of Australians live in poverty (2.47 Million).
#14.9% of children live in poverty.
#21.8% of single parent families live in poverty.

This report highlighted the relationship between poverty and unemployment with the under-employed facing greater risks of poverty particularly with the increasing casualisation of the workforce.

According to the census figures, Australias population during census night 2001 was 18,972,350 [Australian Bureau of Statistics - 2015.0 - Census of Population and Housing -SUMMARY OF FINDINGS - http://www.abs.gov.au/ausstats/abs@.nsf/ProductsbyTopic/1EA78AFE3DE2EDCACA256BDA0073EB53?OpenDocument] .

2004 - Poverty line

The OECD poverty line is defined as 50 per cent of median earnings. The OECD report that 9.9% or one in ten (2 Million) Australians is living below the poverty line.This brings Australia in 14th, behind Britain, the US, Ireland and Italy, in a poverty league table of 18 developed countries. [Melbourne HeraldSun Ben Packham - August 30, 2007 - Two million living in poverty - http://www.news.com.au/heraldsun/story/0,21985,22330974-2862,00.html] [ECO/WKP(98)2INCOME DISTRIBUTION AND POVERTY IN SELECTED OECD COUNTRIES :ECONOMICS DEPARTMENT WORKING PAPERS No. 189byJean-Marc Burniaux, Thai-Thanh Dang, Douglas Fore, Michael Förster,Marco Mira d'Ercole and Howard Oxley62665http://www.oecd.org/dataoecd/34/37/1864447.pdf]

An Australian Council of Social Service (ACOSS) [Home Page - http://www.acoss.org.au/] report [REPORT - A fair go for all Australians: International Comparisons, 2007 10 Essentials - http://www.australiafair.org.au/upload/site/pdf/publications/3078__Australia%20Fair%20Report.pdf] has found the number of Australians living in poverty rose from 7.6% to 9.9% of the population between 1994 and 2004. [The Age - August 30, 2007 - Howard in denial over poverty: Burrow - http://www.theage.com.au/news/National/Poverty-rate-is-not-rising-says-Howard/2007/08/30/1188067198083.html]

The Social Policy Research Centre at the University of New South Wales indicates that in 2004, 1,935,000 or 9.9% of Australians, including 365,000children. [Social Policy Research Centre 2007, Poverty in Australia; Sensitivity Analysis and Trends.]

2006 - UN Human Poverty Index

The last report, 2006, The UN Human Poverty Index (HPI) for 2006 only has a ranking for 18 of the 21 countries with the highest Human Development Index.

In the report, Australia is ranked 14th in the OECD, with a HPI of 12.8. [United Nations Development Programme, Human Development Report 2006, p 295]

The value for the 'Population below 50% of median income (%)' for Australia was 14.3% (2.84 Million).

According to the census figures, Australias population during census night 2006 was 19,855,288 [2006 Census QuickStats : Australia - http://www.censusdata.abs.gov.au/ABSNavigation/prenav/ProductSelect?newproducttype=QuickStats&btnSelectProduct=View+QuickStats+%3E&collection=Census&period=2006&areacode=0&geography=&method=&productlabel=&producttype=&topic=&navmapdisplayed=true&javascript=true&breadcrumb=LP&topholder=0&leftholder=0&currentaction=201&action=401&textversion=false]

2007 - Child poverty

Australia’s child poverty rate falls in the middle of the international rankings. In 2007,UNICEF’s report on child poverty in OECD countries revealed that Australia had the14th highest child poverty rate. [UNICEF Innocenti Research Centre, An Overview of Child Well-Being in Rich Countries, 2007, p. 6.]

CIA world factbook

Poverty figures for Australia are presently unavailable according to the CIA World Factbook (View Page [https://www.cia.gov/library/publications/the-world-factbook/fields/2046.html] ).

Prime Minister target

In 1987 there was scepticism when the former Labor Prime Minister, Bob Hawke said:

"...by 1990 no Australian child will be living in poverty". [ABC Mar 2, 2006 - Govt criticised for poor record on reducing poverty - http://www.abc.net.au/am/content/2006/s1581917.htm] [ABC Jun 24, 2004 - No Aussie child should live in poverty: church leaders - http://www.abc.net.au/news/stories/2004/06/24/1139422.htm]

Bob Hawke has since decided on a poverty figure of 1 million Australians [ [http://www.abc.net.au/news/newsitems/200507/s1425243.htm Hawke says 1m still live in poverty. 29/07/2005. ABC News Online ] ] . This is lower than nearly any other country on the list.

What is poverty

There are two main ways of defining poverty. The World Bank considers a person to be in absolute poverty if his or her consumption or income level falls below some minimum level necessary to meet basic needs. Robert McNamara, the former President of the World Bank, described absolute or extreme poverty as “…a condition so limited by malnutrition, illiteracy, disease, squalid surroundings, high infant mortality, and low life expectancy as to be beneath any reasonable definition of human decency.” [www.worldbank.org/poverty/mission/up2.htm] In industrial countries such as Australia however, people in poverty often don’t look poor in this absolute sense. Therefore, poverty is more often measured in relative terms, where a family’s income is low relative to that of other families. The minimum level of income against which income is considered is called the poverty line.

Researchers argue about where this line should be drawn. The Smith Family and NATSEM (The National Centre for Social and Economic Modelling) report in 2000 indicated as many as 1 in 8 Australians are experiencing poverty. The Centre for Independent Studies (CIS) argues that their research indicates the figure is 1 in 12 and even could be as low as 1 in 20.
#The Smith family researchers “added up all the pay packets in Australia and divided them by the number of wage earners. That average is then halved to find the poverty line” (the Mean).
#The CIS “ranks all the pay packets in descending order finds the wage in the very middle of that range and then halves that… wage to find the poverty line” (the Median). [www.abc.net.au/am/s459428.htm] This gives very different results as seen in Figure 1 below. [Source: AusStats 6523.0 Income Distribution, Australia.]

The problem of these measures is that they focus exclusively on income. But poverty is also defined through other indicators such as education, health, access to services and infrastructure, vulnerability, social exclusion, access to social capital, etc.The most widely used indicator to take non-income factors into consideration is the Human Development Index (HDI) compiled yearly by the United Nations Development Programme (UNDP). For advanced economies, this index takes into consideration health (probability at birth of not surviving to age 60), knowledge (percentage of adults lacking functional literacy skills) and social exclusion (long-term unemployment rate). Australia ranks very high on this global index, although it has recently begun to fall.

Poverty in Indigenous Australia

Indigenous and minority groups are sometimes referred to as the “Fourth World.” They experience a lower life expectancy, higher rates of infant mortality, higher unemployment rates, a lower general standard of living (health, housing), high rates of arrest and imprisonment, plus problems of alcohol and other substance abuses. Australian Indigenous people are no exception. In 2000, life expectancy of Indigenous Australians was some 20 years below that of other Australians [ABS 3302.0] . All the socioeconomic indicators such as income, employment, housing, education and health show considerable disparities between Australia’s Indigenous and non-Indigenous populations. In fact, Australian Indigenous poverty ranks alongside countries as poor as Bangladesh where absolute poverty is real.

References