POVERTY IN AUSTRALIA
The Salvation Army and the National Coalition Against
Poverty
The Salvation Army estimates that there are 2.5 million
Australians living in poverty, which is approximately 12% of the
population. This is an increase of 400,000 people in the last three years,
or an additional 0.5% of Australians living in poverty since 2002.
The Salvation Army submission to the Senate’s Inquiry into
Poverty and Hardship stresses that despite the increased wealth in
Australia, where GDP has grown from $180 billion in 1992 to $830 billion
in 2000, poverty still limits the lives of many Australians.
In 2004, 1.5 million Australians sought help from The
Salvation Army, an increase of 11% from the previous year. This increased
demand reflects the poverty and hardship experienced by many in people in
Australia.
The Salvation Army calls on the government to make a
commitment to:
-
create more jobs
-
increase income support to 25% of the male average
weekly wage
-
remove the penalties that reduce payments to social
security recipients.
The Salvation Army has long been dedicated to addressing
and removing poverty. This makes it highly appropriate for the Army to
join the ranks of churches, non-government agencies and international aid
agencies dedicated to take ongoing action to eradicate poverty by forming
the National Coalition Against Poverty in 2000.
Other members of the National Coalition Against Poverty
include:
-
Victorian Council of Churches
-
UnitingCare
-
Catholic Social Services
-
Brotherhood of St Laurence
-
Australian Council of Social Services (ACOSS)
-
Federation of Community Legal Services
-
Over 50s Association.
For more information on the National Coalition Against
Poverty, please contact the Brotherhood of St Laurence (BSL) at
http://www.bsl.org.au
Why is The Salvation Army supporting the
National Campaign Against Poverty?
The National Campaign Against Poverty has distributed postcards for the public to add their individual voice towards the
alleviation of poverty. The postcards call for the government to implement
three achievable reforms that would reduce financial hardship in
Australia. These reforms are: 1. To create more jobs
There are more than six unemployed people for each vacant
job in Australia. The current unemployment rate of just under 6%
represents about 600,000 people. The Australian Council of
Social Services (ACOSS), drawing on social security data, found that 50%
of all people on unemployment benefit have been out of work for a year,
and of these, most have been unemployed for over 2 years. Clearly more
jobs are needed.[1]
2. To increase income support to 25% of average male earnings (as is the
case for existing pensions)
The rates of payment for people on social security
benefits remain very low. Currently an unemployed single person receives
an unemployment benefit of around $192 a week.[2]
Their unemployment payment is $30.00 less than aged pension. If they
receive rent assistance ($47), their total payments are about $239. This
is $58 less than the Henderson poverty line of $297.[3]
Young people under 21 receive even less. Their payments
are set at around $155 a week, if they are not living at home. Clearly,
housing and groceries are not priced at youth or jobless rates. It is easy
to see why on a weekly basis, The Salvation Army is called on to provide
12,000 food vouchers, 160,000 meals and 3,000 beds to marginalised people
of all ages. The Salvation Army supports the call for all
payments to be raised to the same rate as the age pension (ie $226 a
week), which is set at the very modest rate of 25% of the average male
weekly wage.
3. To eliminate the ‘breaching’ system that penalises
people by reducing their payments
Unemployed people’s hardship can be increased due to
social security penalties that cut their payments for weeks if they cannot
meet Centrelink job search rules. These rules can include keeping a job
diary, applying for a certain number of jobs each fortnight, making a
timely response to Centrelink letters or attending interviews. The rules
can even penalise an unemployed person who moves to an area of lessened
job opportunities.[4]
Research has shown that people do not deliberately break the rules and
that the most vulnerable people the homeless, the ill, the isolated and
the illiterate are most likely to be penalised (ACOSS and National Welfare
Rights Network 2000).[5]
The social security penalties cut payments by 18% for eight weeks for a
first breach (i.e. $275) [6]
and 24% for half a year for second breach (i.e. $1137). For a third breach
payments are cancelled completely for 8 weeks (i.e. $1458).[7]
The government in March 2003 agreed to reduce the number of weeks of
penalty for the first breach but didn’t alter the other two breach
penalties. The National Welfare Rights Network has estimated that up to
20,000 people will lose their entire payment in the next 12 months.
The Salvation Army believes that these penalties are
unreasonable and merely increase the hardship experienced by the most
disadvantaged people in our community.
[1] ACOSS 5/2/2003 Media
release 'Overcoming Joblessness in Australia: 12 Budget priorities’
p 2, from
www.acoss.org.au Social Security Data shows that in December
393,100 people have been unemployed for over a year, most of these
unemployed for over 2 years.
[2] FACS (2003),
Centrelink Rates for 20 September – 31 December 2003, p 10 from
Centrelink web site – newstart rate single person over 21 years:$385 per
fortnight; $192.50 per week.
[3] Professor Ronald
Henderson developed the Henderson Poverty Line in the early 1970s. This
measure identifies the amount of money needed to meet essential costs for
individuals and families. This sheet uses the ‘after housing poverty line
figure for a single person’ from The Melbourne Institute of Applied
Economic and Social Research, Poverty Lines: Australia March Quarter 2003,
Table 1 p. 1 see
http://www1.ecom.unimelb.edu.au/iaesrwww/miesi/poverty.html
[4] Pearce D., Disney
J., and Ridout H., (2002) Making it Work; The Report of the Independent
Review of Breach and Penalties in the Social Security System, Fine
line Sydney p 5 para 1.15, p 60 para 5.12, p 87 7.29.
[5] ACOSS Media release
15/11/2000 Major Welfare and Community Groups call for Penalties
overhaul p 2 (NB Salvation Army AET and AST both signatories) see also
ACOSS and NWRN (2000) Doling out the punishment: the rise and rise of
social security Penalties p 1 see also p 3 comparing breaches to fines
for crimes – eg Drink Driving ($546). Both at
www.acoss.org.au
[6] National Welfare
Rights Network 27/3/2003, Media Release: Social Security penalty
reductions unblock welfare reform package from
www.welfarerights.org.au
[7] The Report of the
Independent Review of Breach and Penalties in the Social Security System
(2002) p 78 para 7.4
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