Australia could be the first nation in the world to eliminate poverty

Jul 8, 2024
Piggy Bank, Accidents and Disasters, Adhesive Bandage, Adhesive Tape, Assistance

The Australia Institute has recently argued for the introduction of a system for measuring the extent of poverty in Australia, pointing out that the government’s recently established wellbeing measurement framework, Measuring What Matters, does not measure the number of Australians living in poverty. Greg Jericho and the other researchers at the Institute have argued that the Albanese government should revive the commitment of the Hawke-Keating government that no child will live in poverty and they’ve suggested that elimination of poverty is a worthy ambition that “starts with measuring it properly”.

Of course it is vital for any government committed to decency for all citizens to keep tabs on whether and to what extent people might be living in poverty. So the fact that the government has made a choice not to measure it is, to say the least, a disappointing indication that elimination of poverty is not a priority – it’s certainly not something the Labor government wishes to be held accountable for. That said, the measurement of poverty trends is not something we might expect from either Labor or the Coalition. It’s the sort of commitment that they might class as “brave” and it’s quite unlikely to be favoured by the current Treasurer, who comes from the school professing the view that wealthy nations “can’t fund every good idea”.

There is no dispute among the nations of the world that eliminating poverty is a good idea. All 191 UN member states have agreed to try to achieve it by 2030. The very first commitment in the United Nations Sustainable Development Goals (UNSDGs), to which Australia is a signatory, is to “end poverty in all its forms everywhere.” Nor do Australians support the continuation of poverty, especially for children. “An overwhelming majority of Australians (81%) agree that income support payments should be set at a rate that does not cause any child to live in poverty.”

In short, there is little or no disagreement nationally that we should eliminate poverty. What is in dispute is whether the nation can afford to fix it. The general belief is that no child should live in poverty but governments know this will require them to release whole families from the same. Hitherto they have regarded this as an insuperable problem from a funding point of view. But it isn’t.

Until recently we might have thought it’s not possible to eliminate poverty and still balance the nation’s finances sustainably. However, recent research has shown that not only can Australia afford to end poverty, but we can also do it overnight and with no detrimental impact whatsoever on any Australian who is currently not living in poverty. In fact, depending on the way we structure the solution to poverty, everyone would be financially better off and so would the federal budget and the wider economy.

The means of solving the problem of poverty in a fiscally sustainable way consists in switching from Australia’s current targeted welfare payments system to a system of universal income security – otherwise known as a Universal Basic Income (UBI). It involves switching away from a welfare payments system which addresses the effects of poverty rather than its main cause – i.e., the lack of an equal start in, and ongoing equal opportunity throughout, life.

Poverty grows in societies when the policy settings are geared towards providing support only to “those in need” (in other words, to the victims of a lack of equal opportunity) and only in dollar amounts that confine those in need to continuing poverty (such as the current Jobseeker payment). The policy orientation of a targeted welfare payments system involves creating a problem we needn’t have had in the first place, and then aggravating it by inadequate funding. This entrenches the poverty we are supposedly trying to alleviate and even increases the cost of dealing with it.

By contrast, a universal basic income tackles the problem from the opposite perspective. Instead of staunching tiny bits of the problem arising from the fact that everyone does not have an equal start in life, it gives everyone a fair start and ongoing equal opportunity and thereby eliminates the problem – or at least much of the potential for it – in advance. It’s cost-effect prevention rather than expensive and ineffective cure.

Of course to achieve success a UBI needs to be set at or above the poverty level, at which point measures of poverty do become useful. But we do not need to wait until a government might agree to establish poverty measures that will only tell us what we already know anyway.

Civil society groups and statisticians have been measuring poverty in Australia for decades, the most common measure being that used by ACOSS and UNSW – 50% of the median income after deducting housing costs. As such, we can already move to design a new income security system to end the poverty that we know now afflicts more than 3 million Australians. This will involve removing the last argument against universal income security to which those in government might prefer to cling – namely that income security sufficient to ensure that no-one lives in poverty is bound to be fiscally irresponsible.

Recent research by a range of advocates for a UBI at the poverty level – collated and summarised by Australian Community Futures Planning (ACFP) here – has shown that not only is a universal basic income for all Australians entirely beneficial for Australia’s economy, it can also be designed in a way that:

  • is far fairer than a targeted welfare payments system can ever be;
  • makes everyone financially better off; and
  • can be financed without the need for federal budget deficits or debt.

Given his ostensible commitment to improving the wellbeing of Australians in a responsible manner, we might quite reasonably surmise that, as the Treasurer of one of the wealthiest countries in the world, Jim Chalmers’ problem isn’t that he can’t eliminate poverty. His problem is more likely to be that he thinks he can’t sell it politically. But a UBI designed along the lines outlined in research by ACFP is very likely to sell itself.

There is a need to take a fresh perspective on approaches to ending poverty and by doing so bring into view a solution, the simplicity and effectiveness of which might come as a surprise. It should be a welcome one. There is a way to end poverty and we should encourage the government to choose it – and choose it now, before the cost of living crisis plunges more Australians into income insecurity and even deeper poverty.

Share and Enjoy !

Subscribe to John Menadue's Newsletter
Subscribe to John Menadue's Newsletter


Thank you for subscribing!