Poverty in Australia
Before discussing the extent of poverty in Australia, it is first crucial to mention the difference between absolute poverty and relative poverty. Absolute Poverty is a situation where deprivation is extreme because people do not have access to the basic necessities such as food, clothing, and shelter. In contrast Relative Poverty is a situation in which the incidence of poverty is measured relative to things such as average weekly earnings or income per head. Therefore poverty, as talked about in Australia is the state where income is insufficient to meet the minimum needs of the household or individual.
The Poverty Line is the level of income below which the income of the household or individual is inadequate to meet the essential needs of the household or individual as determined by society. The Poverty line is determined by a percentage of average weekly earnings. In 1966, the original poverty line for Australia, was set by Professor Henderson as basic wage plus the child endowment payable for two children.
There is a definite lack of recent data on poverty in Australia, therefore we have to look back as far as reports from the 1970’s, in order to find any relevant information on poverty in Australia. In 1975 there was a report made on the extent of poverty in Australia by Professor Henderson. It has since been known as the Henderson Report. The Henderson Report found that 8.5 per cent of Australians were living under the poverty line. It also found that: “Most of the poor suffer from one or more of the following disabilities: old age, lack of a male bread-winner, a large number of dependant children, recent migration to Australia, or prolonged illness. The incidence of poverty was much higher in these categories than among those without any of these disabilities.”(Henderson 1975) At the time of this report average weekly earnings in Australia were $165 per week, the poverty line for a single person was set at $49.60 for a single person, and $93.20 for a couple with 2 children. (Jackson, McIver 1998)
A report similar to the Henderson report was carried out in 1987, where the poverty line, still using the original method used in 1966, had been raised to $146 per week for a single, and $274 per week for a couple with two children. (Jackson, McIver 1998) Although the poverty line had risen due to economic grow...
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... every fortnight without fail, and without the hassles of having to go to work every morning. Whilst the Australian Welfare System is not perfect it does without question assist in its main objective which is reducing inequality of incomes, and therefore the level of poverty.
Although there is no current data on the amount of Australians living under the poverty line, and it is very difficult to estimate, it appears likely that using Professor Henderson’s original method, the increasing inequality in the distribution of household incomes has caused the percentage of Australians living below the poverty line to increased substantially.
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Collier, B. 1992. Introducing Economics. Sydney, New South Wales.
Anzarut, D. 1985. Senior Economics. Melbourne, Victoria.
Lipsey, R. Langley, P. Mahoney, D. Positive Economics for Australian Students, Sydney, New South Wales.
National Coalition against Poverty. 10 September 2001. URL http://www.bsl.org.au/ncapwebsite
Trends in Income Inequality in the 1990’s. 15 September 2001. URL http://www.natsem.canberra.edu.au/pubs/cpol.html.
Pearce, Y. August 20 2001. “Poverty level ‘Just hot air’” The West Australian.
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