Your SlideShare is downloading. ×
0
Inequality, Poverty and Emergency Relief
Peter Saunders
Social Policy Research Centre
UNSW

Presented to the National Emer...
The Needs of Strangers

‘My encounters with them are a parable of moral relations between
strangers in the welfare state. ...
The Welfare State is Under Threat
 Cost pressures (driven largely by the growth in numbers on income support, demographic...
The Role and Nature of Emergency Relief (ER)
 OED: Emergency – “a sudden event or state of affairs that requires immediat...
What Do We Know About ER Users?
 Useful recent (2012) report commissioned by FHACSIA (now DSS) by Homel and
Ryan
 Draws ...
Results from Recent SPRC Research
 Useful to distinguish between the risk of needing ER and the actual incidence of
ER us...
ER Risk and Incidence Estimates
 In 2010, almost one-quarter (23.2%) of adult Australians indicated that they did
not hav...
More Findings - Deprivation
 Deprivation exists when people do not have and cannot afford items that are regarded by
a ma...
Deprivation by ER Risk and Usage
MDS

DEP3

SEVDEP6

Has $500 in emergency saving (i)

0.53

6.8%

1.7%

Does not have $50...
The Bigger Picture – Economic Inequality
 A feature of recent development of most (but not all) OECD economies has been a...
What’s Happening in Australia?
 Australia’s performance in terms of income inequality and poverty is not good;
in 2010, w...
The ‘Official’ (ABS) Picture in 2009-10 (decile cut-offs,
in equivalised dollars)
How Actual Incomes are Distributed between Households
(decile cut-offs of actual household disposable income)
A Closer Look at the Top Decile
An Even Closer Look at the Top Percentile
What Do These Figures represent?
 Measuring inequality using the Gini coefficient is reducing a very complex situation to...
Recent Changes in Income Inequality
 The ABS introduced a new sampling methodology in the mid-1990s and the
figures befor...
Some Illustrative implications
 In terms of total income, the increase in inequality represents a distributional
shift of...
In Conclusion
 Emergency Relief has a key role to play in making ‘A Fair Go’ more of a reality for all
Australians
 Rece...
Upcoming SlideShare
Loading in...5
×

Peter Saunders - The Social Policy Research Centre, UNSW: Understanding the recent trends in poverty and inequality

327

Published on

Professor Peter Saunders, Research Professor in Social Policy, The Social Policy Research Centre UNSW delivered this presentation at the 2014 National Emergency Relief Summit in Sydney/Australia. The two day conference assessed the current systems around service delivery and the challenges that arise around services dedicated to providing material and financial aid, employment, food, housing, addiction relief, transport help and domestic violence support. For more information about the event, please visit the conference website http://www.informa.com.au/emergencyreliefconference

Published in: Education
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
327
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
6
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Peter Saunders - The Social Policy Research Centre, UNSW: Understanding the recent trends in poverty and inequality "

  1. 1. Inequality, Poverty and Emergency Relief Peter Saunders Social Policy Research Centre UNSW Presented to the National Emergency Relief Summit Sydney 4 March 2014
  2. 2. The Needs of Strangers ‘My encounters with them are a parable of moral relations between strangers in the welfare state. They have needs, and because they live within a welfare state, these needs confer entitlements – rights – to the resources of people like me. Their needs and their entitlements establish a silent relation between us. As we stand together in line at the post office, while they cash their pension cheques, some tiny portion of my income is transferred to them through the numberless capillaries of the state. The mediated quality of our relationship seems necessary to both of us. They are dependent on the state, not upon me, and we are both glad of it’ (Michael Ignatieff, The Needs of Strangers, 1984)
  3. 3. The Welfare State is Under Threat  Cost pressures (driven largely by the growth in numbers on income support, demographic change and technological advances in health care delivery)  Political reluctance to raise taxes has created a fiscal problem  Concerns over adverse effects on the incentive to work and save and public concern that elements of the system are being exploited  The complexity of many social problems has lowered expectations about what can be achieved  The triumph of market ideology over state intervention is a long-term threat BUT  Not all countries are cutting back spending on welfare state spending  Between 2009 and 2013 the average OECD social spending to GDP ratio fell slightly from 22.1% to 21.9%.  The spending ratio ratio fell in 14 countries and rose in 13 countries (including Australia – where it is still well below the OECD average)
  4. 4. The Role and Nature of Emergency Relief (ER)  OED: Emergency – “a sudden event or state of affairs that requires immediate action”  ER provides temporary cash or in-kind support on a discretionary basis to those who are willing to self-identify as requiring assistance (i.e. is not an entitlement and does not always provide choice to recipients) and may involve stigma  The kind of support provided should be appropriate to the circumstances (e.g. nature of the mergency; cash vs. in-kind support; one-off or on-going)  The need arises because: (a) Other income-generating or redistributive and support systems have failed – breakdowns in the functioning of market, state and/or family relations (b) Unexpected events place additional pressure on resources that require immediate attention  While (b) will always exist (although how the definition of ‘emergency’ is interpreted may change), the incidence of (a) reflects broader economic and social trends and policies  To understand the pressures facing ER providers, it is important to understand the nature and impact of economic forces and policies
  5. 5. What Do We Know About ER Users?  Useful recent (2012) report commissioned by FHACSIA (now DSS) by Homel and Ryan  Draws on data from three major ER service providers (Anglicare, Salavation Army and St Vincent de Paul Society) and national data (HILDA)  Study shows that ER users are mainly: female, aged 25-44 years, single parents or single people, renters and reliant on a government pension or allowance  The majority of ER users sought assistance more than once  ER users are not a random sample of all Australians → causes are not just “bad luck” (unavoidable) emergencies (e.g. car or fridge breaking down)  Longer-term (‘structural’) factors are also at play (e.g. gaps in the social safety net, including inadequate payments and incomplete coverage)  The numbers assisted and the amount of assistance both increased between 2007 and 2010, i.e. in the aftermath of the GFC
  6. 6. Results from Recent SPRC Research  Useful to distinguish between the risk of needing ER and the actual incidence of ER usage  An indication of the risk can be obtained from responses to surveys asking people if they can raise a certain amount of money in an emergency – the amount asked in ABS and HILDA surveys is $2,000 (now $3,000 in HILDA) but SPRC research shows that a smaller amount ($500) is more relevant to disadvantaged people and more widely supported as a basic essential  The incidence of ER usage draws on responses to questions asking people if they have sought assistance from a welfare agency in the last 12 months because of a shortage of money – stigma may mean that the responses under-estimate the scale of the problem  SPRC surveys have asked these questions in 2006 and 2010, but attention here focuses on the most recent results (which show a modest overall improvement since 2006)
  7. 7. ER Risk and Incidence Estimates  In 2010, almost one-quarter (23.2%) of adult Australians indicated that they did not have at least $500 in savings for an emergency  A much smaller percentage (2.7%) reported having asked a welfare agency for support over the previous 12 months because of a shortage of money. Almost all of this group did not have $500 in emergency savings  ER users are predominantly (95%) aged under 65 and are disproportionately under 30, single people or single parents, and live in country towns or outer metropolitan areas [Note: use reflects where services are located]  When asked if they would describe themselves or their family as poor, almost one-third (32%) of those without $500 in savings described themselves as poor, compared with 4.4% of those who had at least $500 in savings  Of those who had asked for ER, 57.6% described themselves as poor, compared with 10% of those who did not use ER  [The estimate for the whole population is 11.3%]
  8. 8. More Findings - Deprivation  Deprivation exists when people do not have and cannot afford items that are regarded by a majority (at least 50%) of the community as “things that no-one in Australia should have to go without today”  The SPRC research identifies 24 ‘essentials of life’ items that meet this criteria  The items include: a substantial meal at least once a day; a decent and secure home; a telephone; regular social contact with other people; being able to buy medicines prescribed by a doctor; and children can participate in school activities and outings  Three measures of group-level deprivation have been developed: (1) A mean deprivation score, equal to the number of essential items that are lacking and cannot be afforded (MDS) (2) The percentage who are deprived of at least 3 essential items (which produces an estimate close to the income poverty rate) (DEP3) (3) The percentage who are deprived of at least 6 essential items (defined as those who are severely deprived) (SEVDEP6)
  9. 9. Deprivation by ER Risk and Usage MDS DEP3 SEVDEP6 Has $500 in emergency saving (i) 0.53 6.8% 1.7% Does not have $500 in emergency saving (ii) 3.95 53.6% 27.9% Ratio (ii)/(i) 7.5 7.9 16.4 Has not asked a welfare agency for support (iii) 1.17 15.9% 6.6% Has asked a welfare agency for support (iv) 6.08 68.3% 45.3% Ratio (iv)/(iii) 5.2 4.3 6.9 Whole population 1.30 17.3% 7.6%
  10. 10. The Bigger Picture – Economic Inequality  A feature of recent development of most (but not all) OECD economies has been a widening of income differentials  Although greater inequality was originally seen (and still is, in some places!) as a necessary pre-condition for economic growth (“trickle down”) the evidence does not support this view, increasing concern has been expressed about the adverse social and political implications of greater disparities ‘[There is] … no evidence that inequality may be conducive to growth in OECD countries … growing inequality raises political challenges because it breeds social resentment, it questions the ultimate role of democracy and generates political instability’ (OECD Secretary-General)  Nobel-Prize winning economist Joseph Stiglitz has argued that ‘our democracy is being put at peril’ by the high level of inequality in the US because of effects on voter disillusion and distrust, and perceptions of unfairness  Unless actual inequality is reduced, equality of opportunity will not be attained (because those at the top will act to protect their privileges and the economic status of their children – mobility acts in only one direction for those already at the top, while bigger gaps mean there is further to fall!)
  11. 11. What’s Happening in Australia?  Australia’s performance in terms of income inequality and poverty is not good; in 2010, we ranked 24th out of 34 OECD countries in terms of income inequality, and 26th out of 34 in terms of our poverty rate  Income inequality has been growing in Australia. However, definitional changes introduced by the ABS make it difficult to be precise about the extent of change. Research by Roger Wilkins at the Melbourne Institute has shown the changes have over-stated the extent of change but not affected its direction  A recent Oxfam report drawing on leading academic research has shown that a feature apparent in many countries – growing inequality at the top of the distribution – has been particularly marked in Australia  Between 1980 and 2008, for example, the share of income going to the richest 1% of taxpayers was higher in Australian than in all other countries studied except the US
  12. 12. The ‘Official’ (ABS) Picture in 2009-10 (decile cut-offs, in equivalised dollars)
  13. 13. How Actual Incomes are Distributed between Households (decile cut-offs of actual household disposable income)
  14. 14. A Closer Look at the Top Decile
  15. 15. An Even Closer Look at the Top Percentile
  16. 16. What Do These Figures represent?  Measuring inequality using the Gini coefficient is reducing a very complex situation to a single statistic – important not to lose sight of the underlying picture  The 2009-10 ABS income distribution estimates are based on a sample of over 18,000 households  When ‘weighted-up’ to reflect the population, the figures represent 8.4 million households containing 21.6 million individuals and account for an estimated $626 billion of annual after-tax (disposable) income  This means that each one per cent share of disposable income thus represents $6.26 billion, spread among one decile (or 0.84 million) households, thus corresponds to an average of around $7,450 pa per household in that decile, or $143 a week  In 2009-10, the estimates presented earlier indicate that the share of disposable income going to the bottom decile was 2.42% or an average of around $18,000 per household  The share of disposable income going to the top decile was 29.8% or an average of around $222,000 per household  For the top percentage of households (around 84,000 households), their share of total income was 6.18%, equivalent to an average of around $460,000 per household
  17. 17. Recent Changes in Income Inequality  The ABS introduced a new sampling methodology in the mid-1990s and the figures before and after that date are not comparable  The recent period (since 2003-04) has seen a number of definitional changes that further compromise the consistency of the data  Between 1994-95 and 2009-10 the mean incomes of all quintiles rose in real terms  But while the lowest quintile experienced real income growth of 45% and the middle three quintiles about 51%, real incomes in the top quintile rose by 67%  The Gini coefficient thus increased from 0.302 to 0.329, or by 8.9%. The P90/P10 ratio increased from 3.78 to 4.24, or by 12.2%  As a consequence, the income shares of quintiles 1 to 4 all fell, while that of quintile 5 increased by 2.4 percentage points, from 37.8% to 40.2%
  18. 18. Some Illustrative implications  In terms of total income, the increase in inequality represents a distributional shift of $15 billion from the poorest four-fifths to the richest fifth of Australians  If inequality had not changed but total income had remained the same, the bottom quintile (1.68 million households) would have received an extra $3.2 billion in 2009-10, or around $1,900 per household a year, or $37 a week  These estimates are illustrative only, but they highlight what could have been achieved in a period of overall income growth if governments had been willing to intervene to offset (but not reverse) increasing inequality  These hypothetical changes would have done much to relieve the financial pressures on low-income households, and the flow-on pressures facing ER providers
  19. 19. In Conclusion  Emergency Relief has a key role to play in making ‘A Fair Go’ more of a reality for all Australians  Recent policy failings (e.g. in relation to the level of NSA) and changes in emphasis (e.g. increasing benefit conditionality) are eroding entitlements and placing additional pressure on ER providers  Although the numbers seeking ER assistance are small overall, the characteristics of users highlight which groups face the greatest pressures – but there is likely to be a large level of unmet (and unexpressed) demand  Those who use ER experience the highest levels of deprivation – much higher than other vulnerable groups (e.g. public renters and the unemployed)  The Australian income distribution has become more unequal over the last 15 years, with those at the top experiencing the largest gains  This unequal pattern of economic outcomes is an obstacle to the attainment of equality of opportunity  Given the huge amounts of income involved, income redistribution has the potential to ease the financial pressures that drive the demand for ER
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×