Alison Barrett writes:
Within a week of the $368 billion AUKUS submarine deal, touted by Treasurer Jim Chalmers as an investment “Australia cannot afford not to do”, a new report clearly shows that current income support payments and supplements are inadequate to meet essential costs and lift people out of poverty.
Based on data from the 2019-20 ABS Survey of Income and Housing, the report by the Poverty and Inequality Partnership – a collaboration between the Australian Council of Social Service and University of New South Wales – shows that 13 percent (3,319,000) of all Australians and 17 percent (761,000) of children lived below the poverty line in 2019-20 financial year.
However, the report notes that the pandemic led to dramatic shifts in poverty in the first six months of 2020.
Poverty rose in the March quarter of 2020 as people lost income during COVID lockdowns (from 13.2% in September 2019 to 14.6% in March 2020), then fell to 12 percent in the June quarter of 2020, due to COVID income supports such as the Coronavirus Supplement.
The report “shows that high levels of poverty are not inevitable – well targeted investments in income support [such as Coronavirus Supplement] can make a big difference to people’s living standards and wellbeing”.
Calls to action
The report “provides further evidence of the need for a poverty reduction package in the May Budget,” Goldie said in a statement.
The report suggests the following policies to reduce poverty:
- Raise Youth Allowance and JobSeeker Payments
- Improve income support for people in casual and part-time jobs (who are predominantly women)
- Introduce/improve supplements to “cover essential costs above and beyond basic income support”, particularly for people with disability and/or sole parenting
- Invest in effective employment services to end economic exclusion of people including Aboriginal and Torres Strait Islander people, people with disability and those unemployed long-term.
- Increase Rent Assistance and build more social housing.
Children and young adults
Poverty disproportionately impacts some groups more than others, according to the report.
People at highest risk of poverty include people in sole parent households, in households where the main income earner was unemployed, single people without children, people with disability, people on Youth Allowance, women, children and renters.
“The depth of poverty experienced by young people relying on Youth Allowance also highlights the need for urgent action to lift allowances for young people, including students who are now facing severe financial distress,” ACOSS CEO Cassandra Goldie said in a statement.
“The experience of poverty is also highly gendered. Households with women as the main income earner are almost twice as likely to experience poverty as those where men are the main income earner.”
The COVID income supports were well targeted to reduce poverty among people at highest risk of poverty, according to the report.
“When COVID income supports were introduced poverty fell the most among those at greatest risk of it” including – but not limited to – people in income support households [receiving Newstart/JobSeeker], children, and people in households where the main income earner was unemployed.
In 2019-20, 39 percent of children in sole parent families were living in poverty compared with 13 percent of children in families with two parents.
Child poverty in two-parent families fell (by 6%) with COVID income supports – however, the decline in sole-parent families was minimal (0.3%).
People with disability
People with disability face an “above-average risk of poverty” – in 2019-20, 17 percent of adults with disability lived below the poverty line (compared to 13 percent average).
The report acknowledges that this is likely an under-estimation as the data does not consider extra costs of disability, such as additional costs for transportation, medical, care and adjustments to home or workplace.
While poverty decreased among people with disability with the COVID income supports, the decrease was disproportionate depending on disability status.
For example, those without a core activity restriction are less likely to be on JobSeeker payment (and thus eligible for the Coronavirus Supplement) compared to those who have a core activity restriction and may be on Disability Support Pension, which was not eligible for the supplement.
The report notes that the ABS survey where the data comes from does not identify Aboriginal and Torres Strait Islander people. They cited a 2016 study showing that approximately one-third of Aboriginal and Torres Strait Islander people lived in poverty.
The report does not specifically investigate health-related issues, but poverty has wide-ranging health impacts, including reducing access to healthcare services and the wider determinants of health, including housing and food security.
See Croakey’s archive of articles on poverty.