On Friday morning I took part in a Radio National panel discussion on poverty. It was pre-recorded and should be broadcast sometime on Sunday morning.
It was quite interesting watching the responses to my comments:
- Inequality and poverty are separate issues. I don’t worry much about inequality but poverty can be a serious issue.
- Even in the wealthiest societies there will also be some people who through no fault of their own find themselves in dire circumstances.
- Most people differentiate between the ‘deserving poor’ and the ‘undeserving poor’.
- The definition of poverty is contested – in Australia it can mean anything from people who are homeless to only having one plasma television.
Nothing. There was no response, beyond knowing smiles – yes, another neo-con conservative – and they just carried on with their conversation.
This evening Jim Rose drew my attention to this graph:
It comes from this document
We find that moving from traditional income-based measures of poverty to a consumption-based measure and,
crucially, adjusting for bias in price indexes lead to the conclusion that the poverty rate declined by 26.4 percentage points between 1960 and 2010, 8.5 percentage points of which has occurred since 1980.
That is US data – but I suspect a similar exercise would generate similar results in Australia.
Taxpayers are being asked to support anti-poverty programs for people who are nowhere near living in poverty, while other who do live in poverty lose out. Of course, that isn’t a surprising argument. As Director’s Law makes clear:
Director’s law states that the bulk of public programs are designed primarily to benefit the middle classes but are financed by taxes paid primarily by the upper and lower classes.
To better understand this concept understand that the federal government will spend $140 billion on welfare this coming financial year and it is generally accepted that there are 2.5 million people “living in poverty” – so the federal government could send each and every one of them a cheque for $56,000.
Another way of looking at this is illustrated by Matt Cowgill:
The Budget shows that total spending on social security and welfare this year will be $140 569 million. Our population is 23.5 million. Divide one number by the other and you arrive at spending of about $6000 per person on social security and welfare …
That $6000 per person includes much more than cash benefits, which is what you might think of when you hear the word ‘welfare’. This category of spending includes not only the age, veterans and disability pensions along with other cash benefits, but also aged care, child care, and disability care.
Doesn’t seem to be a lot of money actually being spent on poverty.