OECD report: Poverty engulfing many Australians

OECD report: Poverty engulfing many Australians
March 19, 2014
Dan Harrison
Child poverty is on the rise and fewer of us are donating to charity, according to a report that brings into question Australia’s self-perception as the land of the fair go.

The report, released late on Tuesday by the Organisation for Economic Co-operation and Development, shows 14 per cent of Australians get by on less than half the nation’s median income, well above the OECD average of 11 per cent.
The proportion of Australians who report they cannot afford to buy enough food has increased to one in 10, yet this is lower than the OECD average of 13 per cent.
Child poverty in Australia increased between 2007 and 2010, while poverty among the elderly declined, partly due to increases in the age pension.
The pension increase was the biggest contributor to a 30 per cent increase in real public social spending between 2007-08 and 2012-13, a rise more than double the OECD average, but the report said many families with children had been left behind.
Even after the pension increase, Australia’s public social spending as a proportion of GDP is lower than in other developed countries at 19 per cent, compared with the OECD average of 22 per cent.
Income inequality in Australia was stable in the years after the global financial crisis that is the focus of the report, but remains above the OECD average.
Peter Whiteford, a professor in the Crawford School of Public Policy at the Australian National University, said statistics showed income inequality in Australia had been declining since 2007-08.
He said because of the level of the age pension, Australia had a large proportion of people slightly below the poverty line, while other countries such as the United States had a smaller proportion of people in poverty whose incomes were much further below the poverty line.
This meant Australia’s overall poverty gap – the total shortfall between the poverty line and the resources of those below it – was smaller than in many industrialised countries.
Professor Whiteford said Howard and Gillard government changes that moved parents from parenting payments to the lower Newstart allowance, as well as changes to the indexation of family tax benefits, would have contributed to a widening of the poverty gap among families with children.
The proportion of Australians who donate to charity slid by more than 6 percentage points between 2007 and 2012, but at 67 per cent is still among the world’s highest, and well above the OECD average of 44 per cent.
The proportion of Australians who volunteered time or helped a stranger also dropped over the period. Nine in 10 Australians believe the place where they live to be a good place for immigrants, but the proportion who say this fell between 2007 and 2012, as did the proportion of Australians who say their city is a good place for racial and ethnic minorities.