Poverty Lines 1994-2004 New Research Shows More Australians Living in Poverty

By Davidson, Peter | Impact, Winter 2007 | Go to article overview

Poverty Lines 1994-2004 New Research Shows More Australians Living in Poverty


Davidson, Peter, Impact


Australia Fair commissioned new research by the Social Policy Research Centre (SPRC) at the University of New South Wales indicates that in 2004, 1,935,000 or 9.9% of Australians, including 365,000 children, lived below the most austere poverty line widely used in international research. This poverty line, which is used by the OECD, is set at 50% of the median (middle) disposable income for all Australian households for a single adult. In 2004 this poverty line was $249 per week. The research indicates that the proportion of people living in poverty rose significantly between 1995 and 2004.

Poverty lines are widely used in Australia and overseas as an indicator of the risk of financial hardship. They are usually based on the disposable (after tax) incomes of households, with adjustments for the number of adults and children in a household.

In international poverty research the poverty line for a single adult is usually calculated as a proportion of the disposable income of a 'middle income' (median) household, usually income below either 50% or 60% of median household income. Another poverty line commonly used in Australia is the 'Henderson Poverty Line' developed by Professor Henderson, the chair of the national poverty inquiry in the early 1970s and updated since by the Melbourne Institute.

The latest research by the SPRC found that in 2004, 9.9% of Australians lived below the lowest of these poverty lines, the '50% of median income' poverty line. As in previous studies, the risk of poverty was much higher among certain groups, including:

* 40.2% of unemployed people

* 39.0% of single adults over 65 years

* 31.5% of all people whose main income is social security

* 22.8% of single adults of workforce age

* 11.4% of sole parent families.

A less austere but still low poverty line, that is used to define poverty in Britain Ireland and the European Union, is 60% of median income. In the case of a single adult, this poverty line in Australia was $298 per week in 2004. When this poverty line was used in the same research, 3,859,000 people, including 786,000 children, were found to be living in poverty in 2004. This represented 19.8% of all Australians. A major reason for the high increase in the number of people living below this income is the level of social security payments. …

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