A report released today by one of the country’s leading economic modelling centres has warned the growth in living standards will dramatically slow over the next decade — and more worryingly, actually decline for some of the country’s most disadvantaged groups.
The National Centre for Social and Economic Modelling report concluded that the next 10 years would see living standards for single parents and the unemployed go backwards, while growth across the economic spectrum slows and inequality rises.
The report, Living Standard Trends in Australia, was commissioned by Anglicare Australia and examined the increases in living standards in Australia over the past decade and provided a forecast for the next 10 years.
It found living standards for all income levels had increased in the past 10 years, but the rate of growth was not shared equally by all people.
Since 2004, the top 20 per cent of households had enjoyed growth in living standards of 28.4 per cent.
For those in the bottom 20 per cent of households, that growth was lower, at 15.1 per cent.
During that time, the gap in living standards between the richest and poorest households widened by 13 per cent.
However, it was the report’s forecast for living standard growth over the next decade that was of most concern to Anglicare Australia.
Using Australian Bureau of Statistics data and figures from the last federal budget, the research predicted the standard of living for all Australians would rise by just 1.7 per cent, or 0.2 per cent per annum.
For the bottom 20 per cent of households, living standards were set to decline by almost 5 per cent.
“People who are on the lowest incomes are already doing so badly,” Anglicare executive director Kasy Chambers said.
“We know that the kind of income for someone who’s on Newstart for example, this report looks at that after housing and everything they are spending, these are very low incomes.
“So when you don’t have a lot to start with, it’s actually really hard to go backwards.”
The report’s author, Ben Phillips, said the changes made to pensions, and family and single parent payments in the last two federal budgets were a major factor in the forecasted decline in living standards.
“These are the main choices that government are making at this point, and what we’re seeing is that that is translating into lower living standards in the coming years,” Mr Phillips said.
However, many of the budgetary measures Mr Philips predicts, which will result in a decline in living standards, are yet to pass the Senate.
“A lot will depend on whether those measures pass, and of course how future governments respond to the concerns for lower income families and the challenges that government will face with regards to reduced revenues and the budget deficit issues in coming years,” he said.
Ms Chambers said unless governments committed to reforming Australia’s social welfare system, the most disadvantaged Australians would become poorer over the next decade.
“Australia has reached a watershed,” she said.
“We can continue to walk away from many of the most vulnerable and the most disadvantaged among us, as this research shows we are doing, or we can commit now to ensuring our economy and our society gives everyone a fair go.”
For the people at the bottom, the slightest drop in standard of living can be a catastrophe and I just don’t think as a country, we don’t just seem to care.Vicky Gutsjahr
Melbourne pensioner Vicky Gutsjahr lives independently in a low-rental home run by the Villa Maria Catholic Homes.
She said pensioners were already financially stretched and would find it difficult to cope with the anaemic growth in living standards that the report predicted.
“It makes me think that perhaps we are not the lucky country that we always thought we were, when we’re no longer looking after the people who need it most,” Ms Gutsjahr said.
“The standard of living can fall for a lot of people at the top, and in the middle, without very much effect on them.
“But for the people at the bottom, the slightest drop in standard of living can be a catastrophe and I just don’t think as a country, we don’t just seem to care.”
The report was particularly critical of changes to the single parents’ payment, finding that the Government’s decision to move sole parents onto the lower Newstart allowance when their youngest child turns eight had not increased workplace participation.
“Since the larger shift to Newstart allowance in 2013, relative in total participation we don’t find evidence of gains for single parents in terms of [workplace] participation,” it concluded.