“As every Australian agrees, to live here is to have won the lottery of life, because we are as free, fair and prosperous as any country on earth.”
– Tony Abbott, February 2015
In the three weeks since the release of the Abbott government’s second Budget, two damning reports have exposed the harsh reality of this “free, fair and prosperous” country.
The Salvation Army’s National Economic and Social Impact Survey 2015 presents a snap shot of living conditions for 2,400 of the 160,000 people who access its services each year. The survey points out that the poverty level in Australia is more than 25 percent higher than the OECD average.
The economy has enjoyed almost a quarter of a century of uninterrupted economic growth. Yet 2.5 million people currently live below the poverty line; one in ten people cannot afford to buy enough food.
The average survey respondent lives on less than $18 per day after accommodation expenses. Nearly nine out of 10 experience severe deprivation (defined as inability to afford five or more essential items). Those on unemployment benefits are faring worst: a couple on Newstart have to get by on less than $10 per day.
Three-quarters of respondents report that they have cut down on basic necessities. For example, 57 percent have gone without meals, 68 percent have forgone dental treatment and 37 percent can’t afford to access necessary medical care.
More than half of the households surveyed include children, 60 percent of whom are suffering severe deprivation. Two-thirds of parents report that they can’t afford to pay for kids’ activities or an internet connection; one-third can’t provide fresh fruit and vegetables for their children on a daily basis.
The psychological toll this takes is profound. “As a single mother of one, I am struggling”, one respondent said. “I have so many issues that can’t be sorted out financially. Even though I am working it seems I am not getting anywhere. Paying all the unseen bills has made my health really bad. In the past two years my daughter and I have moved houses three times. I feel very insecure.”
Affordable housing is a key issue. The chronic shortage of public housing exacerbates poverty, as increasing numbers of people are forced into the private rental market.
More than 200,000 people are currently on the waiting list for public housing. The number claiming rent assistance has increased by more than 40 percent over the last 15 years. On average, people accessing Salvation Army services spend nearly 60 percent of their income on accommodation.
The levels of poverty and deprivation exposed by the survey accord with those documented in similar reports by the Australian Council of Social Services and the Committee for Economic Development of Australia.
They all find that poverty is significantly more likely to affect those who experience other forms of discrimination or marginalisation.
Women, for instance, experience poverty at a significantly higher rate than men according to ACOSS, and make up 63 percent of those who seek help from the Salvation Army. Levels of poverty among Aboriginal people are more than 50 percent higher than those of the general population. The situation is not much better for migrants from non-English speaking backgrounds.
According to ACOSS, nearly one-third of people with disabilities live below the poverty line. The inadequacy of welfare payments and the pension also mean that the elderly and unemployed suffer poverty at above average rates.
Working poor
Increasingly, people in paid work are struggling to make ends meet. Low wages, inadequate hours and the high cost of living are creating an underclass of working poor. More than half a million people currently working fewer than 35 hours per week are looking for full time work, according to the Australian Bureau of Statistics.
Low wages mean part time work often is a fast track to poverty. Over the last 20 years, the minimum wage has dropped from 63 percent of the median wage to 54 percent, and from 52 percent of the average wage to just 43 percent. As the Labor Party pointed out in its submission to the Fair Work Commission’s annual minimum wage determination, this represents the largest “minimum wage bite” in the OECD.
Yet the minimum wage increase for 2015 is the most miserly in years. The commission has added just $16 per week to the incomes of the more than 1.8 million people who rely on minimum wage jobs.
Given that the cost of utilities have increased by 6.6 percent over the last year, medical expenses by 6.1 per cent, fruit and vegetables by 5.5 percent and housing by 4.7 percent, this year’s 2.5 percent minimum wage increase will mean that the poorest will continue to fall behind.
“I have a neck injury, but want to work”, another Salvation Army survey respondent said. “Never have I ever been so destitute in my life. Funny what life has in store for us. Ever since I had a workplace accident (not being my fault) and injured my neck, my life has gone downhill a considerable amount … from having everything (family, friends) to having nothing, what an eye opener.”
Budget measures exacerbate poverty
Another report, from the National Centre for Social and Economic Modelling at the University of Canberra, examines how the federal Budget will impact different households. It finds that, despite the official sales pitch about “fairness”, the Budget targets those who already struggling.
The centre’s Interim analysis of the 2015-16 federal Budget estimates that single-parent households and households in the bottom 20 percent of income earners stand to lose the most. Single parent households on low incomes stand to lose more than $1,400 in disposable income over this financial year – a loss of 4.2 percent. Nearly nine out of 10 couples on low incomes with children will lose.
For equivalent households in the top 20 percent, nine out of ten will be better off.
By 2018, if all the measures are passed, the impact would be even greater. Low income households with children would lose between 7 and 8 per cent of their income, while single parent households across the board would lose $2,799 per year.
Meanwhile, couples in the top 20 percent would be $435 better off – more if they have children. Singles in the top 20 percent would be $275 better off.
This reality has been lost in a labyrinth of hype constructed by the government, media and business lobbyists, who clearly hope that if they say “fairness” and “Budget” enough times in the same sentence, people will start to associate the two.
In fact, attacks on workers and the poor are just as much a feature of this year’s Budget. They are just more effectively hidden in the detail than they were in 2014. The fundamental agenda of the government and business has not changed: reduce spending on the poor so as to finance greater subsidies and handouts to business and the rich.
