Table of Contents
Australia is at war! First there were the history wars, as Henry Reynolds, Keith Windshuttle and others fought over the technical detail and interpretation of Australia’s colonial history. Then came the war on terror, which followed the events of 11 September 2001. One of the latest ‘wars’ is the poverty war. Note that this is not the ‘war on poverty’ that LBJ talked about in the 1960s, but rather a battle for the hearts and minds of the Australian public (and media). Professor Peter Saunders has documented the Poverty wars that started with a coordinated series of skirmishes by the Centre for Independent Studies (CIS) against a report written for the Smith Family (Saunders 2005: 6–8). [1] The debate started with some rather technical details of measurement, but quickly became bound up in questions of cause and response revealing stark differences in philosophy about choice, freedom, responsibility and the role of government. As always, the first casuality in war was the truth—or rather, public debate. The ferocity of the public debate caused the Smith family, one of the major non-profit welfare organisations in Australia, to stop using the word poverty and led them to disengage from poverty research. Saunders recommends that poverty research gets less technical and grounds itself in the lived experience of poverty and the social exclusion that perpetrates poverty in the long run (Saunders 2005). While I fully endorse this sentiment, it would largely entail qualitative research that has not yet been done, and is not possible to do using the 2002 NATSISS. However, the latest survey does provide direct information on financial stress and social capital for the first time. This provides an unambiguous advance in our knowledge of the processes underlying Indigenous disadvantage.
Income questions in the 2002 NATSISS tend to be asked in a reasonably similar way to other ABS surveys. The advent of financial stress questions in NATSISS and the GSS provide a broad indicator of how Indigenous and other Australian households are coping with their respective income statuses. Respondents were asked whether they could raise $2000 within a week for something important. Note that the main social capital variables are dealt with in Ruth Weston and Matthew Gray (in this volume), with this chapter focusing largely on income characteristics and poverty issues.
The 1994 NATSISS included an impressive and diverse range of income data by source, as it asked respondents to indicate a separate amount for income from wages and salaries (for main job and second job), business income, government payments (that is, from a list of government pensions and a separate amount provided for family payments and rent assistance). [2]Unfortunately, this rich source of information was not used by many researchers. One reason is that the publicly available data was coded into broad income ranges, so did not provide much distributional information. Another reason was that it was not entirely clear how robust the income data was. For example, was it really possible for individual respondents to accurately identify the separate amounts received from those sources when there were considerable flows between labour force states, and reasonably large flows between the various elements of the welfare system?
The official output for income for the 2002 NATSISS has been more modest than was attempted in the 1994 NATSISS (ABS 2004c). In contrast to the earlier survey, there has been no attempt to break down the amount of income from various sources in publications or the CURF. [3] This is not necessarily a bad thing, as the analysts will not be tempted to overstate the amount of information contained in the income data. Indeed, the 2002 survey data has the major advantage that it is now provided in continuous form, and hence can be used for a more robust distributional analysis and a more informative analysis of poverty. [4]
The structure of this chapter is as follows. The next section elaborates on how the poverty war debate appears to have influenced the way the 2002 NATSISS data was presented in the official ABS publication (2004c) and reflects on the utility of their classification of ‘low-income groups’, which was used as a synonym for poverty in that publication. The discussion in this section will also reflect on the limitations of how the survey was conducted, with specific reference to the problems with how the questions on income and financial stress were asked. The third and fourth sections then examine new insights provided by NATSISS data with respect to income and financial stress. The concluding section reflects on future directions for research to consolidate the analysis in this chapter.
The ABS is not a direct combatant in the poverty war. They are more like Switzerland, surrounded by belligerents. They are not doing the fighting but their policy appears to be affected by the war. Biddle and Hunter (in this volume) criticise the ABS’s measure of ‘low income’ as misleading, and this section briefly re-visits that discussion and places it in the context of the poverty war.
Based on analysis of the non-Indigenous population, the ABS (2004c) outputs data for the second and third decile as a measure of ‘low-income’, arguing that the lowest income decile has characteristic closer to those with higher incomes. ABS (2004c) uses this ‘low income’ group as a synonym for poverty, which appears to be an implicit endorsement of CIS criticism of income-based measures in the poverty wars, especially the claim that measurement error (or, rather, under-reporting) is pronounced for low-income earners—particularly those who indicate they have an income less than or equal to zero. One reason to be cautious about adopting the ABS definition of ‘low income’ without question is that the self-employed—a group that are often associated with measurement error in their income status—are not prominent in the Indigenous population.
Even if it were true that income is not measured properly for the non-Indigenous population with very low income, Biddle and Hunter (in this volume) show that this assumption is suspect for the Indigenous population. Compared to those in the second and third decile, those in the first decile are significantly less likely to be employed and own or purchase a home, and significantly more likely to have fair/poor health. Other variables not reported here indicate that the bottom decile respondents are also more disadvantaged, as they are more likely to:
have not completed Year 12
be unemployed or outside the labour force
have been arrested in the last year, and
have transport difficulties.
The ABS definition of low income tends to understate the incidence of Indigenous disadvantage, and it should not be used.
In contrast to the 1994 NATSISS, there were no specific questions for self-employed people in the 2002 NATSISS. However, data was collected on whether there was income from ‘profit or loss from own unincorporated business or partnership, rental property, dividends or interest’. Consequently, if one was particularly concerned about the reliability of income for the self-employed, one could eliminate people with some income from a business or partnership. Eliminating people with income from rental properties, dividends or interests might also be considered by analysts. While this strategy directly addresses the major criticism raised by the CIS in the poverty wars debate, it is not possible to implement using the CURF, as such data is not reported in remote areas. Notwithstanding this, the lack of any solid evidence that income is being measured incorrectly in the low income category means that one should not be overly concerned about such bias in the Indigenous data. However, any comparisons with non-Indigenous populations in the GSS should focus on non-remote areas in the NATSISS and eliminate potentially problematic respondents such as the self-employed to test the sensitivity of the analysis and to maximise the validity of Indigenous/non-Indigenous comparisons.