Newstart and wages: Nowhere near enough for families

27 Feb 2020

By Eric Leslie Martin

Co-author of the report, Poverty & Inequality in Australia, Professor Carla Treloar and Cassandra Goldie, ACOSS CEO. Picture: Provided.

By Eric Martin

The St Vincent de Paul National Council welcomed the release on Friday 21 February of Poverty & Inequality in Australia, the report published by ACOSS and UNSW in Sydney tabulating the latest research and data on the financial conditions of struggling Australians.

National Council Chief Executive Toby O’Connor said the report showed that more than one in eight adults and one in six children (or 774,000 Australian kids) live below the poverty line.

“In Australia the poverty line, which is measured as 50 per cent of median income, is $457 a week for a single adult. The average poverty gap (the gap between the poverty line and the incomes of people in poverty) is $282 a week,” he said.

The 2020 report, Poverty in Australia 2020: Part 1, Overview, found that there are 3.24 million people (13.6 per cent) living below the poverty line of 50 per cent of median income which, in dollar figures, works out to $457 a week for a single adult living alone; or $960 a week for a couple with two children.

Among different family types, sole parent families have the highest poverty rates, at 32 per cent. Children in sole parent families, with a poverty rate of 39 per cent, are more than three times as likely to live in poverty as children in couple families, who have a poverty rate of 13 per cent.

Unbelievably, people with paid employment are also living in poverty: among Australian households, where the main income is wages, seven per cent are also living in poverty.

This seven per cent is made up of families with children, those reliant on only part-time earnings, and those with high housing costs. Since most people live in wage-earning households, this group actually makes up 38 per cent of all people in poverty.

“The report highlights the persistent, deepening poverty in Australia – 42 per cent of households in poverty are living, on average, at a further 42 per cent below the poverty line, compared to 34 per cent below the poverty line in 2007,” Mr O’Connor stated.

The constant struggle of meeting utility bills, repair bills and secondary expenses often results in a choice between these expenses and having enough food to last the fortnight and/or being able to afford transport.

Evidently, the added cost of children is sufficient to push some people to breaking point, something clearly reflected in the findings of the report.

“Every day, Vincentians work with people who are struggling with a range of issues in communities across Australia.  For many, their struggle is exacerbated by persistent, grinding poverty,” Mr O’Connor added.

“Today’s report is an important measure of poverty in Australia. We track GDP and other economic indicators we consider important and it is imperative that we also track poverty, or nothing will change.”

“The next generation is set up for failure because of increased housing costs and failed policy around social housing, stagnant rates of income support and slow wage growth,” he said.

“The Government can reduce poverty by boosting jobs growth, increasing Newstart and Rent Assistance and investing in social housing.”