The Poverty Debate
16 December 2002 at 12:12 pm
A newly released report into poverty in Australia has resulted in some strong debate within the Third Sector about just what it means in this country.
The report is by the Centre for Independent Studies (CIS) and is called Poverty In Australia: Beyond Rhetoric.
The report challenges prevailing definitions and measurements of poverty, and calls for an alternative strategy for poverty alleviation based on American-style welfare reform, lower taxation and job creation.
Authors Peter Saunders and Kayoko Tsumori argue that social policy researchers regularly mix up ‘poverty’ – whether people have enough to live on – with the very different issue of income inequality – whether some have more money than others.
They claim research on poverty in Australia has become hopelessly entangled with debates over inequality and that helping the poor escape poverty has become synonymous with increasing taxes on higher income earners to close the income gap.
The CIS report assertion is that Australia’s social policy community keeps repeating two mistakes. First, that poverty in this country is a much bigger problem than it really is. Secondly, that the best way to tackle poverty is to increase taxes and redistribute even more of people’s incomes.
But the report has drawn criticism from Australia’s largest welfare umbrella organisation ACOSS despite its support for keeping the poverty issue in the public arena.
ACOSS President Andrew McCallum says it’s a pity that the report does not go beyond rhetoric but presents a particular point of view.
McCallum says there are three major flaws in the CIS analysis:
1. It misunderstands the meaning of poverty
2. It misunderstands the realities of poverty for Australians on the lowest incomes
3 The policy prescriptions would worsen poverty.
McCallum says we agree that poverty is not only about income levels and welfare. Poverty is about not having access to the resources people need to participate in normal social and economic life.
But he says minimum standards of housing, diet and clothing vary from country to country. Poverty in Australia is different to poverty in Bangladesh and is understood by Australians in the context of our ‘normal’ community standards.
He says there is no ‘absolute’ poverty as the CIS claims.”
McCallum says the CIS Report suggests that few Australians live in poverty as the public understands it. The reality is that social security payments are well below what most Australians consider the minimum income to ‘just get by’.
He says for example, a poverty line worked on this basis for a single adult is $343 per week. A single person on Newstart receives just $188 per week.
He says the CIS report has an objective of reducing taxes and the size of government. That is their entitlement but nothing to do with reducing poverty.
He asserts the report confuses cause and effect. It argues that poverty is due to welfare when social security payments are in reality, the last resort people have to avoid poverty.
He says Australia should find its own solutions. Slavishly following the United States is not the answer.
The CIS Researchers’ estimates of the number of Australians in poverty range from around 8%, to 20% (based on the Henderson poverty line), 40% or even higher.
Saunders and Tsumori show that even the lowest of these estimates is far too gloomy and argue it is time for a rethink. They say Australia should abandon the failed redistribution strategy in favour of a self-help strategy.
They say an alternative strategy to more welfare spending is to promote self reliance by requiring able-bodied people of working age to take employment, much as the Americans have done.
More information on the report can be found on the CIS website at www.cis.org.au.