Almost a tenth of Canberrans live below the poverty line: 9%, or 38,000 people (including 9,000 children) – more people than before the pandemic began – and the cost of living is increasingly unaffordable for low-income Canberrans, according to an ACTCOSS report issued yesterday.
The 2021 ACT Cost of Living Report, an annual publication, tracks changes in the cost of living for low-income households, which have been hit by rising prices over the past five years.
ACTCOSS wants the Federal Government to raise the level of welfare payments, and for both the Commonwealth and the ACT Government to invest in social housing. They also want the ACT Government to introduce social justice measures to address poverty, inequality, and the cost of living.
Income
“The two main drivers of poverty are income and the cost of housing,” said ACTCOSS CEO Dr Emma Campbell.
People on low wages or receiving JobSeeker ($44 a day) or Youth Allowance ($36 a day) find living in Canberra less and less affordable, Dr Campbell stated.
Canberra’s number of working poor is growing, said Bec Cody, CEO of Mental Health Community Coalition ACT: people on low incomes who cannot afford to live, pay their rent or mortgage, and support their children, let alone function themselves.
“The ACT has the highest median income of any jurisdiction – so if you’re struggling on a low income, you are really being left behind,” Dr Campbell said.
Dramatic increases in the cost of essential goods have disproportionately affected people on low incomes. In the past five years, the ACT’s prices for electricity have increased by almost 28%, gas by 26%, health by 18.6%, education by 18%, housing by almost 16%, meat and seafood by over 13%, and fruit and vegetables by 11.6%, according to ABS CPI data.
“Families on low incomes are hit the hardest because they have no choice but to buy these things in order to keep their families safe, well-fed, and with a secure roof over their head,” Dr Campbell said. “We’re seeing increasing housing insecurity and poor mental health and education outcomes because families are no longer able to afford the basics.”
As costs of living go up, said Carmel Franklin, CEO of Care Financial Counselling, poor Canberrans have to make difficult choices: “Do I pay my rent this week or put food on the table? Can I afford to leave my violent relationship and risk being homeless? Do I pay my mortgage for this month or the car registration that’s due? Do I pay my electricity bill or the medical costs that I’ve got?”
Some people are using high-cost credit (payday loans, credit cards, ‘buy now pay later’ arrangements) to pay for essential household items, and are getting into a spiral of debt.
The cost of housing
Canberra is the most expensive capital to rent; rents have increased by more than 10%, ten times more than the rest of Australia, and many full-time workers cannot afford to pay rent.
The ACT also has Australia’s highest rate (73%) of rental stress among low-income households; people who spend more than 30% of their income on housing costs have very little left over to spend on essentials, Dr Campbell noted.
JobSeeker does not provide enough for people to pay rent in the ACT, said Travis Gilbert, CEO of ACT Shelter. Rent on a one-bedroom flat costs 117% of the rate of the payment (including Rent Assistance); in other words, tenants are in arrears from the first week of their lease, at risk of eviction and homelessness.
“A chronic lack of affordable housing over many years has left us with a housing crisis in Canberra,” Dr Campbell argued.
The ACT has a shortfall of more than 3,000 social houses. Although the ACT Government has committed to deliver 400 public houses and 600 additional affordable houses, a recent report by the Australian Housing and Urban Research Institute found that the ACT Government’s housing strategy was not delivering more affordable rentals. ACTCOSS wants both ACT and federal governments to invest more in social housing.
“We need to address the current shortfall of 3,100 social housing dwellings and the projected need of 8,500 additional dwellings by 2036, or otherwise plan to address the resulting social costs of undersupply,” said St Vincent de Paul Society Canberra/Goulburn CEO Barnie van Wyck.
Community housing providers are the best people to deliver affordable rentals to those on low incomes, Dr Campbell said. “But they need investment, and they need access to affordable land.” She hopes the 2021–22 ACT Budget, to be released this month, will provide.
“Without significant federal and territory government investment in social housing and better protection for renters, this crisis will continue to worsen, deepening and entrenching powerful disadvantage and homelessness in our community. These are the choices our society makes.”
Fix the social security safety net
ACTCOSS wants the Federal Government to increase welfare payments: increase JobSeeker by at least $25 a day, and ensure everyone receives at least $65 a day; increase Rent Assistance by half; introduce a Disability and Illness Supplement of at least $50; and establish a Single Parent Supplement to recognise the added costs of single parenthood.
Poverty rates in the ACT “plummeted” from 8.6% to 5.2% when the government introduced the JobKeeper payment and Coronavirus supplement of $550 per fortnight, Dr Campbell noted.
Recipients ate better and more regularly, caught up on bills, paid for medicine, found it easier to pay rent, paid off debts, saved up for emergencies, bought major household items (like fridges and tables), and could save up to study.
This bore out findings from other countries, where “decent levels” of income support had more success in getting people back into the workforce. “It keeps them healthy, it allows them to take education and training to prepare for their next job.”
When these were phased out, poverty rates rose to 9%, above the pre-COVID level – and more people are unemployed than before.
“This highlights that as a society – through our elected representatives – we are making the choice to leave people in poverty,” Dr Campbell said.
“ACTCOSS continues to call on the Australian Government to fix our social security safety net for good.”
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