Cost of living increases make it even tougher for low-income families
16 December 2019 at 4:42 pm
A new report says living costs are outpacing income growth in WA, hurting families on the lowest incomes
Western Australians living below the poverty line are spending close to three quarters of their income just on housing costs, new research shows.
New modelling from the Western Australian Council of Social Service (WACOSS) found that while wages rose slightly over the past year, this was more than offset by cost of living increases across the board.
Single parent families and unemployed people have been hit particularly hard by these increases.
For a single Newstart recipient living in Perth, the rate of payment falls $16.43 short a week of covering even a basic standard of living.
WACOSS CEO Louise Giolitto said this showed the rate of Newstart was unacceptable.
“Households with two sets of wages were better able to absorb the increase in costs, which hit especially hard for people relying on income support payments like the Newstart Allowance,” Giolitto said.
“On even the most conservative estimations, it is clearly simply impossible for someone on Newstart to be able to afford the basics in life.”
Households living under the poverty line – 50 per cent of the national median household income – also severely struggled.
These households spent 72 per cent of their income each fortnight on housing costs.
For families using financial counselling services, on average 45.5 per cent of their expenditure went towards housing costs alone.
WACOSS made several recommendations to help low-income households, including raising Newstart and mandating 30 per cent affordable housing, including 10 per cent social housing, in every new development.
Giolitto said putting more money into the pockets of those on the lowest incomes and wages was fundamental to boosting the economy.
“All the evidence shows that increases to the incomes of those with the least are immediately spent on essential goods and services, rather than being squirrelled away and hoarded,” she said.
“When people are doing it tough, they need the support of community services… The sector needs fairer and more adequate funding to better support both the workers in the industry and the people they dedicate their lives to assisting.”