The Bankwest Curtin Economics Centre’s new ‘Behind the Line’ report provides the latest examination of poverty and disadvantage in Australia and offers evidence that rising housing costs are pushing many families into serious financial hardship.
The Bankwest Curtin Economics Centre’s new ‘Behind the Line’ report provides the latest examination of poverty and disadvantage in Australia and offers evidence that rising housing costs are pushing many families into serious financial hardship.
The centre’s analysis reveals that 325,000 people in Western Australia live on less than half the national median income, a standard definition used to classify poverty.
This represents nearly 12.8 per cent of the population and includes almost 86,000 children.
Financial hardship is greatest for public housing tenants, with nearly a third of women in social housing living below the poverty line.
Often, however, low income is one of the reasons the government housing authority allocates public housing in the first place.
And with rents fixed at 25 per cent of assessable income, public housing provides the stability and security for people to find their feet.
But rising rents have been making life tough for many families in the private rental sector. One in seven people in WA in private rental housing are classed as in poverty, and two thirds of older single women in private rentals are living below the poverty line.
There’s a compelling association between rising rental costs in Perth and the share of people in housing stress, and it’s easy to see why.
Source: BANKWEST CURTIN ECONOMICS CENTRE | Real Estate Institute of Western Australia (REIWA) and HILDA survey, Waves 15 to 2020
The Real Estate Institute of Western Australia is reporting median Perth house rentals at $450 per week, and median unit rents at $410 per week.
Even towards the lower end of the market, you’d be hard pressed to find any rentals in Perth for $300/ week.
These costs are pretty much out of reach when you’re out of a job, a situation many people have faced over the course of the pandemic.
The single JobSeeker payment is worth $314.75/week, and the Commonwealth Rent Assistance (CRA) maximum weekly payment is $71.40.
That comes to a total of $386.15/week in income support.
If housing costs are $300 per week, that would leave $86 left to cover food, travel, bills, and all other expenses.
And if your landlord puts your rent up by $20 per week, you’d have $20 less to cover all your other bills because your rent assistance is already at the maximum payment.
It’s impossible to see how the level of government income support can be thought of as adequate, whatever the semantics around where the poverty line should be set.
Increasing the CRA maximum payment by 30 per cent, alongside a $20 per day increase in the base rate for JobSeeker and related payments, would pretty much eradicate severe poverty in Australia.
Critics of the idea say increasing the CRA further will add more expense to an already costly program, or that it would feed through to higher rents, or that more people would be brought into CRA, or that payments would go to people who aren’t in housing stress.
All of these are legitimate concerns, of course. But if there are problems, surely, it’s better to find solutions rather than using the problems as a reason for doing nothing.
• Professor Alan Duncan is director of the Bankwest Curtin Economics Centre at Curtin University.
