Stage-three tax cuts condemned as ‘unconscionable’ as Acoss report shows extent of poverty

Advocates say it should be a ‘source of great shame’ that one in eight people live in poverty in such a wealthy country

Social service groups say it would be “unconscionable” for the Albanese government to proceed with the stage-three tax cuts, as new research shows one in eight Australians lives in poverty.

A report from the University of New South Wales and the Australian Council of Social Service (Acoss) says about 3.3 million people were living in poverty in the first year of the pandemic, including 761,000 children.

It says poverty levels fell to a 17-year low after the boost to welfare payments during Covid-19, but experts believe poverty likely rose above pre-pandemic levels when the extra support was withdrawn.

The research comes as the government faces calls to shield those on low incomes from the cost of living crisis in the October budget. It is also considering the future of the stage three tax cuts, which disproportionately benefit higher income earners.

Cassandra Goldie, the chief executive of Acoss, said poverty levels in Australia should be a “source of great shame”.

But the report also showed poverty could be significantly reduced through government choices.

“Those stage-three tax cuts are unconscionable in the scale and the way they overwhelmingly benefit people on the highest incomes in the country and overwhelmingly go to the highest income men,” Goldie said.

“This report shows some of the greatest rates of poverty we’ve got are in single-parent families and the children in their care – overwhelmingly [single parents] who are women.”

The Acoss report used Australian Bureau of Statistics data to analyse poverty levels in each quarter of 2019-20.

It found the poverty rate soared to 14.6% in the March quarter of 2020, but fell to 12% – a 17 year low – in the June quarter of 2020.

The Morrison government’s temporary boost to welfare payments briefly lifted 646,000 people out of poverty.

The report also found the poverty gap was increasing before welfare payments were temporarily boosted during the pandemic. This measures how far below average living standards those in poverty are.

Carla Treloar, the director of UNSW’s social policy research centre, said there was no population level data to determine current poverty rates, but surveys showed people were skipping meals, not attending medical appointments and making other difficult choices.

“That pinch that everyone is feeling at the petrol station, at the supermarket, at the chemist, is really magnified for people on $48 a day,” she said.

Treloar said it was “astounding” one in eight people and one in six children were living in poverty in a wealthy country like Australia.

“We showed we could achieve 20-year lows in poverty through these supports,” she said.

Other research has estimated hundreds of thousands of people were cast back into poverty when pandemic welfare support was reduced and later abolished.

The report put the poverty line at $489 a week for a single adult and $1,027 a week for a couple with two children during 2020-21, using the relative measure of 50% of median household post-tax income.

This is lower than another often-cited figure, the Henderson poverty line, which sits at $611.27 a week for a single person.

The base rate of the jobseeker payment, which was recently increased through routine indexation, is $334.20 a week for a single person with no children.

Keagan Nicotra, 30, has been living on jobseeker since losing his job in 2020.

He said he had been able to have an adequate diet while welfare payments were lifted but now struggled to afford food and medicine.

Single people on jobseeker payments lived $134 below the poverty line before the pandemic. Once payments were temporarily doubled, they were $146 above the relative poverty line of 50% of median household after-tax income, the Acoss report said.

Nicotra said living in poverty also had a disastrous impact on his mental health.

“I had a life and I could live it,” he said of the brief period when payments were lifted.

He said a wide range of groups from across society supported an increase to welfare payments.

Acoss has called for all jobseeker and related payments to be lifted to about the relative poverty line of at least $73 a day and for an increase to commonwealth rent assistance. Others, including the Greens, would like the rate of jobseeker lifted to the higher Henderson poverty line.

The federal government has ruled out an increase to income support payments in the upcoming October budget but said it would consider it in future.


Luke Henriques-Gomes Social affairs and inquality editor

The GuardianTramp

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