Chapter 1Introduction
‘Poverty is cruel. It creates the conditions that lead to degradation and exploitation as it insinuates itself in intergenerational trauma and humiliation. Families and communities living within its grip report feelings of powerlessness, hopelessness and despair aggravated by dependence on welfare benefits. The issue of poverty should not be an afterthought in policy. Government should be striving for human wellbeing in an inclusive economy in which no one is left behind’.
1.1Poverty is a multifaceted social and economic story of deprivation and disadvantage that, according to a recent study by the Australian Council of Social Service (ACOSS) and the University of New South Wales (UNSW), impacts over three million people in Australia today. Every one of these Australians has the potential to suffer debilitating economic, social, political, and personal difficulties that can severely restrict their ability to live fulfilling and contributing lives.
1.2The Senate Community Affairs References Committee (the committee) was determined to investigate the structural drivers of poverty, the most significant impacts, which cohorts are most at risk, and what could be done to reduce poverty across the country.
1.3Over the course of the inquiry, the committee received extensive evidence regarding the human costs of poverty. While commonly used definitions describe poverty in terms of not having enough income, the human impact of this stretches beyond financial deprivation and into all aspects of people’s lives.
1.4The committee heard from people with direct lived experience of poverty. This included hearing about the compounding challenges faced by individuals who do not have enough money to meet basic human needs or to live contributing lives; the impossible daily choices they make between food, shelter, and healthcare; and how these deficiencies impact on their health, education, employment, relationships, and participation in society.
1.5The committee heard from government agencies who intervene with programs in social services, education, health, housing, and employment portfolios to reduce poverty. It also heard from community organisations that provide services on the ground, such as emergency relief, holistic services for First Nations communities, housing, and healthcare, and from organisations that advocate for policy changes to improve outcomes for vulnerable people. Finally, experts and academics highlighted the immense social and economic costs of poverty and suggested potential solutions.
1.6Due to the volume of the evidence received from written submissions and witnesses at initial public hearings and the timing of the May budget, the committee decided to release an interim report on 4 May 2023. It centred the stories heard from people with direct lived experience of poverty and the committee recommended that the Australian Government take urgent action so that Australians are not living in poverty, and prioritise policy measures in that May budget that specifically target rising inequality and entrenched disadvantage, including through the income support system.
1.7The committee heard of the beneficial impact of the increased income support provided by government in response to the unique economic circumstances of the COVID pandemic. The committee heard of how this gave some individuals and organisations the ability to ‘turn their attention away from day-to-day survival and towards envisioning and working towards a more sustainable future for themselves and their dependents’.
1.8The final report covers the additional evidence received since the interim report including on First Nations people and child poverty. It also further investigates the social security system, its multiple components, and its relationship to poverty, and finally, the suite of mechanisms raised by inquiry participants on how to address poverty and reduce its impacts across Australia.
Referral and conduct of the inquiry
1.9On 7 September 2022, the Senate referred an inquiry into the extent and nature of poverty in Australia to the committee for reporting by 31 October 2023.
1.10The Senate granted several extensions of time for reporting, first to 5 December 2023, then 7 December 2023, 6 February 2024, 26 February 2024 and finally 28 February 2024.
1.11Details of the inquiry were published on the committee’s website and the committee invited organisations and individuals to lodge submissions and attend public hearings.
1.12The committee published 253 submissions and a range of additional information, answers to questions on notice, and tabled documents, all listed in Appendix 1.
1.13The committee held nine public hearings and one site visit at the following locations across Australia:
20 October 2022 — Melbourne, Victoria;
6 December 2022 — Brisbane, Queensland;
13 December 2022 — Murray Bridge, South Australia;
31 January 2023 — Western Sydney, New South Wales;
21 February 2023 — Lismore, New South Wales;
27 February 2023 — Canberra, Australian Capital Territory;
4 April 2023 — Perth, Western Australia;
15 August 2023 — Canberra, Australian Capital Territory;
31 October 2023 — Canberra, Australian Capital Territory; and
3 November 2023 — Burnie, Tasmania (site visit).
1.14All witnesses are listed in Appendix 2.
Interim report
1.15The committee published an interim report on 4 May 2023 for this inquiry. Its scope included: defining poverty, the extent of poverty in Australia, the human impacts of poverty, the structural drivers of poverty, and the relationships between income support payments and poverty.
1.16The sections below provide a brief overview of the evidence contained in the interim report.
Definition and measure of poverty
1.17Although the Government does not have an official definition of poverty, submitters and witnesses highlighted generally accepted approaches to measuring poverty, including 50 per cent of median income (a version of which is used by the Organisation for Economic Co-operation and Development (OECD)) and the Henderson Poverty Line (which is the longest running poverty measure in Australia).
1.18Despite mixed views regarding which measure is most appropriate, many inquiry participants acknowledged the importance of having an official national definition to allow for measurement of poverty and tracking of progress on reducing poverty over time.
The extent of poverty
1.19ACOSS and UNSW used the latest 2019–20 Census by the Australian Bureau of Statistics to provide contemporary poverty statistics. Based on a 50 per cent of median household income measure, key statistics include:
a poverty line of $489 per week for a single adult and $1027 per week for a couple with two children;
13.4 per cent of people (or over 3 million people) and 16.6 per cent of children (or over 760 000 children) in Australia live below the poverty line after factoring housing costs;
people in households below the poverty line had incomes averaging $304per week below the poverty line (the poverty gap) after deducting housing costs;
the poverty gap widened from 1999 ($168 per week) to March 2020 ($323 per week); and
increased income support payments during the COVID-19 pandemic lifted 646 000 people (including 245 000 children) out of poverty.
1.20Going beyond the headline figures, submitters highlighted how specific cohorts experience higher risk of poverty, including women, children and young people, people with disability, carers, people from culturally and linguistically diverse backgrounds, rural and regional communities, people on income support payments, and First Nations people.
The nature of poverty
1.21The committee heard how the human impacts of poverty are far reaching and the cause of significant hardship and lost opportunities for many individuals. The inquiry received statements from people with direct lived experience of the complex and intersecting challenges and impacts of poverty, including how an inability to pay rent, energy bills, and transport and medical costs, all combine into feelings of hopelessness and negative health impacts.
1.22Submitters highlighted the challenges of housing insecurity, housing quality issues, and homelessness, and how being ‘trapped’ in homelessness or insecure housing can have intergenerational impacts. Inquiry participants also highlighted the heightened risk and vulnerabilities around housing for cohorts such as people with disability, women escaping domestic and family violence, and people in the LGBTQIA+ community.
1.23The committee received evidence about the negative impacts poverty has on physical and mental health, including inactivity, dietary issues, chronic health conditions, and mental illnesses. Stories were told of how people are unable to seek healthcare or pay for medicines due to their lack of resources, leading to acute and long-term health conditions and poor wellbeing. It also heard how the constant financial stress and hardship increased risks of depression, anxiety, and suicidal behaviour and ideation.
1.24Submitters and witnesses told the committee how poverty can reduce economic participation in education and employment. Submitters explained how poverty reduced education access and achievement from a young age, through school, and into young adulthood. It was also highlighted how poverty is a barrier to employment and how lack of employment relates back to increased risk of poverty.
1.25Finally, the committee heard how poverty affects social lives, including how people withdraw from society, struggle to maintain relationships, and lose their sense of belonging. Submitters also highlighted vulnerabilities for migrants and refugees who already lack social capital, and for First Nations people where experiences of poverty reduce their ability to share and practice their culture.
The structural drivers of poverty
1.26Submitters and witnesses outlined the structural drivers of poverty that go beyond simply not having enough money. This included economic, labour market, housing, and social factors that are not personal deficits or within the control of individuals.
1.27The economic environment including the rising cost-of-living and interest rate increases by the Reserve Bank of Australia to curb inflation have disproportionately impacted those on the lowest incomes and their relative purchasing power.
1.28Those without employment are at high risk of poverty, particularly single people and people living in large families. Those experiencing persistent poverty gave evidence that they were constrained in their ability to participate in the labour market, which in turn leads to low incomes and the associated challenges. Inquiry participants also discussed trends around casualisation and insecure work, where even those with paid jobs continue to be disadvantaged. Early childhood education and care were seen as pathways to break this cycle in the long term.
1.29Insecure, inappropriate, or unaffordable housing was identified by inquiry participants as a core structural driver of poverty and that the two issues were intimately linked. Marketisation and private rental market conditions were highlighted as drivers of poor housing outcomes for those on the lowest incomes.
1.30Finally, social factors such as domestic and family violence and intergenerational disadvantage stemming from child poverty were seen as key drivers of poverty. Submitters highlighted that children who grew up in poverty were more likely to have low incomes in adulthood, be unemployed, or have tenuous connections to the labour market.
The interaction between the social security system and poverty rates
1.31Inquiry participants stressed the importance of the social security system in managing poverty, with particular focus on income support payments. The Department of Social Services (the department) highlighted how various income support payments provide for a minimum standard of living and a social safety net. This includes payments for the unemployed (such as JobSeeker Payment and Youth Allowance), the aged (Age Pension), people with disability (Disability Support Pension), and others.
1.32The department also described the recipient profiles of various payments, including the trend of increasing long-term JobSeeker Payment recipients due to economic shocks, labour market changes, and an aging population.
1.33Other inquiry participants highlighted the strong link between the levels and accessibility of income support payments and poverty rates. Given this, many submitters advocated for income support payments to be increased to reduce poverty rates and to improve outcomes across health, housing, and social and economic participation. The temporary increase in income support payments like JobSeeker Payment during COVID-19 was cited as evidence of the Australian Government’s ability to reduce poverty rates.
The committee’s view
1.34The committee acknowledged the significant evidence provided on the dehumanising experience of poverty, the rates and impacts of poverty, and the long-standing calls to increase income support payments to allow for basic living standards for many Australians.
1.35The committee agreed that urgent action was needed to reduce poverty in Australia. It also highlighted areas for further consideration as the inquiry progressed, including the range of policy domains which can help address disadvantage and work to improve life outcomes for the community.
1.36The interim report recommended the Australian Government prioritise measures in the 2023–24 Budget to target rising inequality and entrenched disadvantage, including through the income support system.
1.37The 2023–24 Federal Budget included an increase in a range of income support payments that benefited around two million recipients. This included:
$4.9 billion to increase the rate of working age payments by $40 per fortnight;
to move single JobSeeker Payment recipients aged 55 years and over after nine continuous months on payment to the higher single rate;
$2.7 billion to increase Commonwealth Rent Assistance maximum rates by 15 per cent; and
$1.9 billion to extend eligibility for Parenting Payment (Single) to single principal carers with a youngest dependent child under 14 years (up from 8 years).
Scope and structure of the final report
1.38The final report focuses firstly on the social security system and its ability to impact on poverty rates. At the time of the interim report, the committee had not yet covered in depth the impacts of poverty for First Nations people and child poverty. The final report explores these two critical areas, including the additional evidence received since the interim report. Finally, the final report considers the evidence on what policy and program mechanisms the Australian Government should enact to help address poverty.
1.39Chapter 2 focuses on the social security system and the supports the Australian Government provides through the social services system that aim to address various aspects of poverty. It reflects the evidence received from inquiry participants about how individuals and cohorts facing poverty interact with the social security system and its multiple components. It then examines the adequacy of various income support payments.
1.40Chapter 3 highlights the complex and intersecting issues around poverty experienced by First Nations people and their communities, including the impact of geographic remoteness, lack of employment opportunities, and interactions with social security payments and programs.
1.41Chapter 4 draws on the evidence received regarding child poverty and highlights the detrimental impacts poverty has on developmental, and other outcomes for children and young people. It then discusses the long-term and often intergenerational effects of child poverty on future economic and social outcomes and concludes with proposed solutions for reducing child poverty in Australia.
1.42Chapter 5 looks at mechanisms to address poverty in Australia, including national policy mechanisms that can influence how poverty is considered and tracked, and policy areas and programs that can improve various outcomes for those impacted by poverty.
Acknowledgements
1.43The committee thanks all those who contributed to the inquiry by making submissions, providing additional information, and appearing at public hearings.
1.44In particular, the committee acknowledges the courage and generosity of people who shared their direct and contemporary lived experiences of poverty, including First Nations people and organisations. These submissions and statements significantly deepened the committee’s understanding of the impacts and challenges of poverty at the human level.
Note on references
1.45In this report, references to Committee Hansard are to proof and official transcripts. Page numbers may vary between proof and official transcripts.