Poverty findings sound warning on budget changes: ACOSS

Governor-General Peter Cosgrove appealed to all Australians to focus on people living in poverty. AAP Image/Dan Himbrechts

More than 600,000 children – 17.7% of all children in Australia – were living below the poverty line in 2012, a report released by the Australian Council of Social Service has found.

Just over one third of the children were in sole parent households.

Nearly 14% of the population – 2.55 million people - were below the poverty line, after taking account of their housing costs, according to the report, which showed poverty was growing.

Four out of ten people relying on social security payments were below the line. While 61% of people below it relied on social security as their main income, 31% relied on wages as their main income.

The findings, dating from late in the Labor government, draw on new data from the Australian Bureau of Statistics for 2011-12 and previous years. They come as the Abbot government battles to get budget changes in welfare through parliament, and are likely to increase the strong political resistance to measures that have been widely criticised as harsh.

The poverty line – 50% of medium income – for a single adult was $400 a week; for a couple with two children it was $841 a week.

The proportion of people in poverty had risen from 2010, when it was 13%. Some groups have a notably higher proportion of people living in poverty – women, children and older people, sole parents; people born in non-English speaking countries, Aborigines and the disabled.

Some 14.7% of women, compared with 13% of all men, were in poverty in 2011-12. Sole parents are at particularly high risk - one third were in poverty.

“The people most likely to be living in poverty are those who are unemployed (61.2%), or in a household that relies on social security as its main source of income (40.1%) and particularly on the Newstart Allowance (55.1%) or Youth Allowance (50.6%),” the report says.

“This is largely explained by the fact that many social security payments fall below the poverty line, even with Rent Assistance and other supplementary payments added to household income.”

The report points out that the indexation of social security payments such as the Newstart Allowance, Youth Allowance and Parenting Payment to the CPI means that the payment does not increase as community living standards improve. This “is likely to result in higher poverty rates over time than would be the case if payments were indexed to wages, as they are with the Age Pension”.

The budget proposes to change the indexation for age pensions and some other payments to the CPI.

Launching Anti-Poverty Week, Governor-General Peter Cosgrove appealed to all Australians to focus on “this important social and community issue”.

He said that for one million Australians “poverty is insidious and all encompassing. Because at its core, poverty deprives people of choice, deprives them of their freedom and assaults their dignity. As a nation we can’t allow this to continue.”

ACOSS CEO Cassandra Goldie said the child poverty rate was of particularly deep concern with nearly 37% of children in sole parent families living in poverty. This was because of the lower levels of employment among sole parents, especially those with very young children, and the low level of social security payments for these families.

The findings highlighted the inadequacy of allowances, she said. “The poverty line for a single adult is $400 a week yet the maximum rate of payment for a single person on Newstart – when Rent Assistance and other supplement payments is added – is only $303 per week. This is $97 per week below the 50% of median income poverty line.”

She said the findings also emphasised the danger posed by the budget proposals to reduce the indexation of pension payments to the CPI only.

“Being unemployed is the strongest predictor of poverty. However, a significant finding of the report is the number of people living in poverty whose main source of income is from employment. Although workers in paid employment face a lower risk of poverty, they form one third (33.2%) of all people below the 50% poverty line. It is likely that most of these are either employed part-time or supporting dependent children on a low wage.”