The number of Australians living below the poverty line is increasing and with many relying on welfare and no other means of income, the problem will only worsen.
A report by the Australian Council of Social Services (ACOSS), in conjunction with the Social Policy Research Centre at the University of NSW has found that 2.9 million Australians are living below the poverty line. The Poverty in Australia Report 2016, which is the fifth report of its kind, uses the poverty line benchmark of 50 per cent of the median household income – this equates to $426.30 of disposable income per week for a single household.
According to the report, 17.4 per cent, or 731,300 children under 15 live below the poverty line, most of them in single parent households. This represents a two per cent increase over the last 10 years.
ACOSS CEO Dr Cassandra Goldie said, “The overall picture from the last decade is one of persistent and entrenched poverty across the community with an increase in child poverty. It is a national shame that after 25 years of economic growth, we have not done better at changing this trajectory and ensuring our most precious national resource, our children, are given the best possible start in life.
“This report is a further wake up call to the Government to address the inadequacy of the lowest income support payments and bolster support to low income families through the family payments system. It is also a reminder that housing remains the biggest cost of living issue for households and must be addressed as a policy priority.”
While politicians from both sides take pot shots at each other over the issues of welfare and poverty, Dr Goldie said such debates were just frustrating, telling ABC television, “We frame it as if it’s the fault of the individual, you’re either lazy, not working hard enough, not retraining hard enough, but the basic numbers are there,” she told ABC television.
“One job available for every five people conservatively is the estimate looking for paid work.”
It’s not just those who are unemplyed that face poverty problems. Working part-time and living on the median household income accounts for 15.5 per cent and 4.7 per cent of full time workers also live juts on or below the median.
The issue of housing once again reared its head, with those reliant on renting more likely to struggle. Of those living below the poverty line, 59.7 per cent were in rental properties, with 44.2 per cent renting privately.
Dr Goldie called for an increase in Newstart and Youth Allowance payments, rather than the proposed cuts currently before the upper house. “Newstart and Youth Allowance are $110 and $158 a week below the poverty line respectively. Along with improvements to training and employment supports, an increase to these payments of at least $50 a week would go some way to alleviating poverty and improve people’s chances of finding paid work.
“The alarming increase in child poverty revealed by this report should also act as an urgent appeal to senators to reject further cuts to family payments, currently before the upper house. The cuts would strip another $60 a week from single parent families. The current proposal to withhold Newstart support for young people for up to four weeks should also be rejected. Both proposals would likely lead to increased poverty.
While 13.3 per cent of the population live below the poverty line, 13.9 per cent of those on the Age Pension fail to meet the necessary income deemed enough to live on. And when you dig deeper, more than twice as many only just live above the poverty line, with 33.2 per cent having a disposable income of between 50 and 60 per cent of the median household income.
And yet, the position for those over 65 on the Age Pension has actually improved over the last 10 years, thanks mainly to the Age Pension reforms in 2009 and the fact that an increased number of people are leaving the work force with at least a small amount in super. The average increase on a single Age Pension of $32 in 2009 was above inflation and as a result, placed Age Pension payments closer to the 50 per cent median household income level.
Would anyone living on an Age Pension feel that their situation had improved, especially those who don’t own their own home? Any increases in Age Pension are more than likely swallowed by the inevitable increase in rent.
That really is the crux of the matter. The current ASFA Retirement Standard (June Quarter), states that a single female between 65 and 85 requires $455.81 per week to live a modest lifestyle. The full Age Pension at June 2016 was $436.95 per week, already almost $20 less than that required. However, factor in that the ASFA Standard doesn’t have an allowance for housing costs, rent or mortgage, and you can easily see why older women are more likely to find themselves living below the poverty line and homeless.
And all this is before the gender super gap is even considered – but this isn’t just about women. The Age Pension is inadequate and it’s unlikely to change any time soon. Therefore it’s important that we, as a nation, are encouraged to save as much as we can in super and this means making it easier. The freeze on superannuation contributions should be lifted and the contribution increased to the legislated 12 per cent as soon as possible and the proposal to cap concessional contributions at $25,000 should also be scrapped, especially for those approaching retirement age.
Only by helping hard-working Australians save for their own retirement will be able to address the issue of pensioners living in poverty.
Do you agree? Should more be done to help people save for their own retirement? Or should the Age Pension simply reflect the true cost of living in Australia?