One in eight Australian adults living in poverty, study shows

New figures out today about the wealth of Australians paints a bad picture, with housing prices and a lack of jobs hurting millions.

One in six children in Australia and one in eight adults are living in poverty, according to a new report released by the Australian Council of Social Service (ACOSS) and the University of NSW, Sydney.

“It’s not right that in Australia, one of the wealthiest countries in the world, more than three million people, including three quarters of a million children, are living in poverty,” ACOSS chief executive officer Dr Cassandra Goldie said.

Lead researcher UNSW Sydney Associate Professor Bruce Bradbury said the poverty rate in Australia is worse than in most other wealthy countries, including New Zealand, Germany and Ireland.

“Our report finds that 13.6 per cent of people in Australia are living in poverty and that poverty rates have remained at about this level for the past decade, despite economic growth,” Prof Bradbury said.

“Child poverty has consistently been higher than overall poverty, ranging from 18 per cent to 16 per cent over the past decade and now sits at 17.7 per cent – more than one in six children.”

The Organisation for Economic and Social Development (OECD) estimated the overall poverty rate in Australia at 12.1 per cent in 2016, but the ACOSS report has a slightly higher figure of 13.6 per cent because it took housing costs into account and used some slightly different measures.

However, both figures are still above the OECD average of 11.8 per cent.

The report calculates the poverty line in 2017/18 as $457 per week after tax for a single adult; and $960 per week for a couple with two children.

For those who own their own home, or don’t have to pay rent, the poverty line is lower, at $370 per week for a lone person, or $776 per week for a couple with two children. This is an estimate of how much is needed to buy all other essentials after housing is paid for.

In calculating the poverty line, the report does not estimate how much people need for necessities, but instead sets the amount as being equivalent to 50 per cent of Australia’s median income.

This is acceptable, the report states, because the cost of achieving an acceptable standard of living varies over time and between countries, as technology such as mobile phones or indoor toilets become more common.

However, this does not mean income inequality can’t be eliminated, the report states, and this can be done by lifting the lowest incomes (including minimum wages and unemployment benefits) to at least half the median level.

Dr Goldie said the Federal Government could reduce poverty by boosting growth in jobs, increasing Newstart and Rent Assistance, and investing in social housing.

The ACOSS report found the single rate of Youth Allowance (plus Rent Assistance and Energy Supplement) was $168 per week below the poverty line.

Those on the Age Pension (plus Pension and Energy Supplements) fared a bit better, but their income was still $10 per week below the poverty line.

An ACOSS survey released last year found nine out of 10 young people on Youth Allowance had skipped meals, and one in three had withdrawn from their studies because of a lack of funds.

“It’s clear we must act to lift people out of poverty,” Dr Goldie said.

“The low rate of Newstart, a lack of jobs and unaffordable housing are locking people in poverty,” Dr Goldie said.

She said households with the lowest incomes saw their average housing costs rise by 42 per cent between 2005 and 2017.

This was much higher than the middle 20 per cent, which saw their housing costs rise by 15 per cent.

ACOSS is calling for a $95 per week increase to Newstart and Youth Allowance; a $20 per week increase to Rent Assistance (as a first step) and for these payments to be regularly indexed to wages, as is the case for the Age Pension.

The low rate of Newstart, a lack of jobs and unaffordable housing are locking people in poverty, ACOSS says. Picture: istock

Newstart, Youth Allowance and Rent Assistance have not increased in real terms in 25 years.

“We want to support each other. It’s who we are as a nation. But our economy is leaving people behind, with persistently high poverty rates despite decades of uninterrupted economic growth,” she said.

“The job market is changing, with jobs less secure, and fewer entry level jobs than there used to be.

Dr Goldie said that those living in poverty included young people working to get their foot in the door of the competitive job market, single parents juggling caring responsibilities, and older people confronting age discrimination.

“Not only has poverty remained consistently high in our wealthy country, the depth of poverty is getting worse, with households in poverty on average living 42 per cent below the poverty line, up from 35 per cent in 2007,” Dr Goldie said.

UNSW Social Policy Research Centre Professor Carla Treloar said it was clear action needed to be taken on income support, housing and employment.

“We cannot accept these high, persistent levels of overall poverty and child poverty.”

KEY FACTS

• 3.24 million people in Australia (13.6 per cent of the population) live below the poverty line;

• 774,000 children under the age of 15 (17.7 per cent of all children in Australia) live below the poverty line;

• More than one in eight adults and one in six children live below the poverty line in Australia; and

• The poverty rate in Australia is worse than New Zealand, Germany and Ireland, according to the latest figures from the OECD.

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