Poverty is on the rise in Australia after several years of decline, according to the latest Household Income and Labour Dynamics in Australia (HILDA) survey – and changes to welfare policies have been cited as the possible cause.
The annual survey, released on Tuesday, found poverty rates have been on the rise since 2016, raising concerns of an emerging trend.
Researchers said this trend was likely caused by changes to the welfare system, which has seen many Australians taken off higher pension benefits and on to the Newstart allowance.
“We have seen an uptick in measures of poverty in the last couple of years on the back of fairly substantial declines over this century,” the report’s co-author, Professor Roger Wilkins said.
“We’d be a bit concerned about whether that was the start of a trend upwards, or whether it’s just a short-term upward movement.”
The survey found poverty has increased among all family types, except for couples with children.
Single-parent households are most exposed to poverty (16% – 20%) compared with non-elderly couples with or without children (5%).
Poverty rates are highest among the elderly, particularly elderly single people (in excess of 30%).
The report’s co-author Richard Wilkins suggested changes to the welfare system introduced by the Coalition and previous Labor government were the likely cause for the rise in poverty rates.
“Obviously, there’s a lot of attention on the lack of a real increase in the Newstart allowance,” Mr Wilkins said.
The Newstart allowance currently amounts to $555.70 every two weeks for singles with no children – less than $15,000 a year.
“But that’s probably not the biggest factor. It would be things like progressively moving more people onto Newstart from higher benefits like parenting payment single and the disability support pension,” Mr Wilkins added.
The survey shows about 10% of households are reliant on government welfare, sourcing more than half their income from government support.
It comes as the Australian Council of Social Services (ACOSS) has released a survey of 489 people on Newstart and Youth Allowance. A worrying 84% of those said they are forced to skip meals to save money – 44% said they skip more than five meals a week.
One respondent said they only showered once a week to save on water and electricity, and no longer purchased food that required refrigeration so they could turn the fridge off.
ACOSS CEO, Cassandra Goldie said the findings make it clear the welfare system isn’t working.
“Australia is the wealthiest country in the world, yet we have people skipping meals, staying in abusive relationships and showering once a week because they are on the grossly inadequate Newstart payment,” she said.
“Newstart is not working – $40 a day is not enough to get people through tough times and into suitable paid work.
“Our survey shows people can’t afford rent, food, energy, clothing, transport, haircuts, dental care or Internet access, which severely hampers their chances of getting a job, especially as there is only one job available for every eight people looking.
“An urgent increase of $75 a week is the absolute minimum we need after 25 years without a real increase.”
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