We must do more to combat rising poverty

Australia is not on track to meet its commitment to at least halve the proportion of Australians in poverty. It has no strategy to change this. It may in fact be going backwards.

Under the United Nations (UN) Sustainable Development Goals (SDGs), in 2015 Australia committed to at least halve the proportion of men, women and children living in poverty by 2030.

Eight years on, it is apparent that we have made no discernible progress. Analysis by the Bankwest Curtin Economics Centre suggests that 11.8 per cent of Australians were living in poverty in 2020, barely any change from 11.9 per cent in 2015.

Here in the West, the situation is worse, with an estimated 12.8 per cent of West Australians living in poverty. The rate is even higher amongst children, with 16.6 per cent or more than 85,000 children living in poverty – the third highest rate of child poverty of all states.

Income-support payments such as Jobseeker no longer reflect either economic circumstances or community expectations. Their inadequacy places many long-term recipients well below the poverty line, making it much harder for them to get a job and become self-reliant.

We know what works

Despite the $50-a-fortnight increase to the rate of Jobseeker in 2021, it is still well below the poverty line. Australia also has one of the least generous levels of unemployment assistance in the OECD.

But we already know the significant difference that increased income support can make to the lives of Australia’s most vulnerable. The temporary COVID-19 supplement that substantially lifted the JobSeeker payment gave us ample evidence, with research showing that the lift in payments reduced the number of people in poverty by about a third and reduced the number of households in housing stress. 

To help resolve the never-ending debates about the level of these payments, the Federal Government should consider setting up a baseline for the adequacy of payments, which would be reviewed regularly and updated by an independent body such as the Productivity Commission.

This review would consider factors such as economic conditions, the rates of other payments, arrangements in similar advanced economies and housing and education costs.

The increasing lack of affordable housing is another driver of disadvantage in Australia. More than half of low-income households renting in the private market are experiencing rental stress. The rental vacancy rate in Perth, and many regional WA areas, is less than one per cent, with house rents increasing by nearly 20 per cent in Perth over the last year.

At the same time, Commonwealth Rental Assistance (CRA), which has generally proven to be effective in helping low-income households, has fallen behind average rents.

Governments should assess whether more funding to lift the rate of CRA is necessary, based on further state government investment in increasing the social housing stock. The Federal Government could then decide whether it should lift CRA or provide matched funding to incentivise social-housing construction at the state level. Despite significant recent investment in social housing in WA, long-term underinvestment means the state’s stock has fallen over the past few years and is not keeping up with population growth.

Perhaps the greatest opportunity to get ahead of disadvantage right now, however, is through better use of data to identify those most at risk of deep disadvantage.

We know that intervention in early childhood is more successful at influencing outcomes in adulthood than interventions in later childhood. It is difficult to find people before they fall into disadvantage and provide them with the right support and pathways out of poverty.

Better integrated data sharing between federal and state governments would help to design and evaluate targeted support for families to prevent child poverty as early as possible.

This would also improve understanding of the predictors and preventers of entrenched disadvantage.

Without these interventions, current trends in child poverty point to a further 280,000 to 550,000 young Australians experiencing child poverty in the future. They will likely face developmental disruptions at a critical age and significantly increased risks of poverty in adulthood, becoming the next generation of disadvantaged Australians.

This is not inevitable. We will be choosing to perpetuate this cycle of disadvantage if we do not address our poor past performance.

We can and should choose to fundamentally change the way we support people in disadvantage. To begin, we must act earlier to prevent it from becoming entrenched across generations.

The Senate is conducting an inquiry into the extent and nature of poverty in Australia. Its success will depend on the Government’s ability to enact real change by reaffirming its commitment to its 2030 target to halve poverty and making clear, actionable goals, then evaluating their outcomes.