1 in 8 Australians living in poverty

By Shae Courtney | 20 Nov 12

By Shae Courtney.

Whilst it is true that More Economically Developed Countries (MEDCs), such as Australia, enjoy on balance a standard of living that is the envy of Less Economically Developed Countries (LEDCs), this standard can often mask the internal problems in developed nations.

A recent study, conducted by The University of New South Wales in collaboration with the Australian Council of Social Service (ACOSS), revealed a startling one in eight Australians is living in poverty. Co-author Bruce Bradbury said:

In this study we use a relative poverty definition. The basic idea of a relative poverty line is that you set a poverty line at some fraction of the middle living standard or the median income in that community. We have chosen 50 per cent so people whose income, after adjusting for their family’s size, is below half the middle income of the country in the same year are defined as being poor.

The study is a country-specific investigation, consequently, and it revealed that those living in poverty, an income of 50 per cent of median Australian disposable income, stood at 12.8 per cent of the population or approximately 2.2 million people.

Using the poverty line that is used in the United Kingdom, 60 per cent of median income, the report demonstrated that 20.9 per cent of Australian adults and 26.1 per cent of children lived below the poverty line. For an independent person without children this equates to $430 per week, and to $903 for a cohabitating couple with two dependents.

The report also demonstrated that economic hardship is slightly more likely in female Australians. 22.2 per cent of Australian females live on less than 60 per cent of median income compared to 19.5 per cent of Australian males. On a state-by-state basis, Victoria and Tasmania trumped others by being the two states where poverty is least likely. New South Wales is the state most likely to have poverty. The report’s authors, however, omitted the Australian Capital Territory and the Northern Territory because of insufficient data from the Australian Bureau of Statistics (ABS).

From 2003 to 2007, poverty increased markedly from 11.9 per cent to 14.5 per cent, but decreased substantially between 2007 and 2010.

As the report explains:

The main reason for the increase in poverty from 2003 to 2007 is likely to be that community incomes (represented by the ‘median income’ measure on which the poverty lines are based) rose strongly over this period but a growing minority of people (those below the poverty line) fell behind. For example, the real incomes of people on some social security payments fell behind because their payments were only indexed to the CPI [Consumer Price Index] and not to wages.

The reasons for the dip in poverty between 2007 and 2010 are likely to include the economic downturn in 2008-09 (which depressed median incomes without substantially increasing unemployment) and the increases in pension payments for single people in September 2009 which lifted many people with small amounts of non-pension income (such as interest from investments) above the 50% of median income poverty line.

Social and economic rights

While the Universal Declaration of Human Rights (UDHR) contains economic and social rights, the International Covenant on Economic, Social and Cultural Rights, which became effective in 1976, is the loci and reference point of international economic legislation.

Particularly, Article 25 of the UDHR and Article 11 of the Covenant enshrine a minimum entitlement to food, clothing and shelter.

Article 11 includes: “the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions.”

According to the Icelandic Human Rights Centre: “In purely material terms, an adequate standard of living implies living above the poverty line of the society concerned.”  Given this definition, the Australian government is failing one in eight citizens in its responsibility to maintain a standard of living above the poverty line. Others argue, however, that the precedent set by the UDHR and the Covenant is one of basic subsistence and little more.

Dr Cassandra Goldie of ACOSS says that it is a “national disgrace” that poverty has increased in Australia despite 20 years of economic growth. Prominent Australians including Tim Costello and Janet Holmes à Court have called for Australian politicians to set a target akin to the United Nations Millennium Development Goals to eradicate or significantly reduce poverty.

Income inequality in Australia, however, remains restrained relative to other developed nations. 2009/10 data from the Australian Taxation Office (ATO) reveals the top one per cent of income earners, earning at least $194,365, as representing nine per cent of total income, which contrasts starkly with the picture in the US. It also contrasts moderately with income inequality at its highest, in the 1920s when the top one per cent of earners commanded 11.4 per cent of income.

Shae Courtney is a British undergraduate student at the University of Melbourne, majoring in English. He previously studied at Queen Mary, University of London. He is an aspiring journalist and a research associate at the New Zealand Centre for Human Rights Law, Policy and Practice at the University of Auckland. Shae has a particular interest in current affairs, human rights legislation and international diplomacy.

Further Reading:

BBC article on the Report