Google AI


Modern Australian

We can’t fix what we don’t track. That’s why Australia needs an official poverty measure

  • Written by: Melek Cigdem-Bayram, Ronald Henderson Senior Research Fellow, The University of Melbourne
We can’t fix what we don’t track. That’s why Australia needs an official poverty measure

Following last month’s economic reform roundtable, Treasurer Jim Chalmers said all attendees agreed “higher living standards is the holy grail, and a more productive economy is how we deliver it”.

This signalled the government’s understanding that leaving no one behind can unlock greater prosperity and productivity for everyone.

But for all the discussion about improving living standards, there was little explicit mention of poverty. This is despite evidence that, by some estimates, one in seven Australians is living in poverty.

One reason the issue didn’t get a lot of airtime may be because Australia doesn’t have official measures of poverty.

We’ve researched effective ways of measuring poverty and what they reveal about standards of living. We’ve found if Australia tracked poverty properly, we’d likely find out not only how many Australians are struggling, but also why. This insight can help governments, business and the community to formulate better responses.

Half a century of trying

There have been efforts over the decades to try to track poverty in Australia, starting with the government’s Commission of Inquiry into Poverty in 1975.

Chaired by Ronald Henderson, the so-called “Henderson report” became a landmark piece of research.

The inquiry established the Henderson Poverty Line: an unofficial, income-based poverty line.

Today, the Henderson Poverty Line continues to be updated by the Melbourne Institute, but it no longer reflects contemporary living standards. It’s been largely superseded by the approach of the OECD, which defines poverty as 50% of median household disposable income.

Perhaps most enduring, however, was the inquiry’s recognition that housing costs are central to the household budget and should therefore be factored into poverty measurement. This practice remains an international standard.

Australia left behind

Despite the legacy of the Henderson report, Australia has been leapfrogged by the rest of the world in measuring poverty. In lacking official poverty measures, we’re an international outlier.

Almost 160 countries have official poverty measures. These are either a monetary measure, which is based on income, consumption or expenditure, or it’s a multidimensional measure that captures non-monetary aspects such as health, education and employment. Some countries use both, which is best practice.

Australia has neither. In Australia, unofficial income-based indicators continue to dominate the poverty framework.

This recent paper shows under the OECD measure, around 12% of Australians were in poverty in 2022 before housing costs.

When housing costs, such as rent and mortgage repayments, are included, the rate rises above 13%. This signals the growing role of housing in driving inequality.

However, as Henderson observed and is now internationally recognised, poverty cannot be measured by monetary indicators alone. Wellbeing is about economic factors, but also about freedom, and people having choices and opportunities in their lives.

Addressing poverty now requires more comprehensive measurement tools. Failing to do this places us increasingly out of step with international approaches to poverty measurement.

As recognised earlier this year by the Economic Inclusion Advisory Committee, looking at both monetary and multidimensional measures would make for better policies and services.

What could poverty look like in Australia?

Today, multidimensional approaches are used in 84 countries, including Canada and New Zealand. International organisations such as UNICEF, the European Union and the World Bank also use them.

More than half of these countries apply the Multidimensional Poverty Index (MPI), developed by researchers Sabina Alkire and James Foster in 2011. This measures the incidence and intensity of poverty across multiple areas.

Our team worked alongside Alkire to apply the MPI method to Australia to track deprivations across the following five areas:

  • housing

  • employment

  • health

  • education and skills

  • and social connection.

Each dimension is weighted equally and represented by two indicators.

In this illustrative example, which uses HILDA Survey data, people are identified as multidimensionally poor if deprived in at least one-third of the weighted indicators.

The chart shows the percentage contribution of each indicator to total multidimensional poverty between 2003 and 2023. The wider the colour, the larger the contribution to poverty.

The chart highlights areas where progress is being made. For instance, it shows improvements in educational attainment and unemployment (the latter likely a result of temporary pandemic supports such as JobKeeper).

But the chart also highlights new risks, including mounting housing stress, increases in poor mental health and deepening social isolation.

These patterns are largely invisible in standard income-based measures which, while essential for showing how many people are in poverty, do not reveal why they are in poverty or the depth of their disadvantage.

The MPI fills this gap and, when coupled with income-based measures and developed using official ABS data, will provide a more complete picture of poverty.

A poverty-free economy, measured in both monetary and non-monetary terms, is one in which all citizens can reach their full capabilities and productivity is maximised.

To achieve this, governments must track poverty comprehensively over time and adopt official poverty measures.

The authors would like to acknowledge the contributions of researchers Nicole Bieske, Cara Nolan and Ismo Rama to this article.

Authors: Melek Cigdem-Bayram, Ronald Henderson Senior Research Fellow, The University of Melbourne

Read more https://theconversation.com/we-cant-fix-what-we-dont-track-thats-why-australia-needs-an-official-poverty-measure-263724

What to Do When an Older Car Is No Longer Worth Keeping in Melbourne

Ever looked at another repair quote and wondered whether your old car is still worth the trouble? It is a common turning point for Melbourne motoris...

Your Baby's First Year: A Local Guide to Feeding, Sleep, and When to Get Extra Support

Ask ten parents in a Brisbane mothers' group how their baby is feeding or sleeping, and expect ten different answers.  Someone's baby sleeps throug...

Kitchen and Laundry Makeover Ideas That Don't Require a Full Renovation

Full kitchen renos are expensive — and most people don't actually need one.  They need the kitchen to stop looking like it's stuck in 2009, or they...

How Technology Is Reshaping the Modern Australian Commercial Kitchen

The commercial kitchen has always been shaped by technology. Refrigeration changed how ingredients could be stored, modern ventilation transformed k...

The Number on a Roller Blind Fabric That Nobody Explains

Somewhere in the fabric book, next to the colour name, there is a percentage. Three per cent. Five per cent. Ten per cent. Nobody explains it, most c...

What’s Trending in Men’s Jewellery This Father’s Day!

Finding a Father’s Day gift that feels personal, stylish and genuinely wearable is not always easy. While socks and novelty mugs have traditionally ...

Road Signs: Understanding Their Role in Clear and Effective Signage

Effective signage and display hardware can help businesses communicate information, promote products and organise customer or visitor movement. Road...

Bottle Label Printing: Key Factors to Consider Before Your Next Packaging Run

Effective packaging begins with understanding the product, bottle material, artwork and production requirements when planning bottle label printing. H...

Planning a Long-Distance Move With Interstate Movers Melbourne

Moving between states involves more planning than a typical local relocation. Along with packing and transporting household belongings, you need to...

Understanding the Role of an I/O Controller in Industrial Automation

Modern industrial systems depend on accurate communication between sensors, machines and control systems. An I/O controller can help manage this commu...

How the Right Mining Hose Supports Demanding Operations

Mining environments place considerable demands on equipment used for material transfer, water management and processing. Hoses operating in these co...

Simple Ideas for Making Social Gatherings More Memorable

We have all been to those parties where everyone just stands around the kitchen island, staring at their phones, waiting for someone else to make a mo...

Outdoor Wall Lights: Improving Exterior Lighting Around Your Home

Lighting can influence how a room looks, feels and functions, so the right fitting should be selected according to both appearance and practical req...

Commercial Office Cleaning: Combining Routine Office Cleaning With Melbourne Service

Keeping a workplace clean requires a service that can accommodate everyday tasks as well as the particular needs of the business. Professional comme...

Caravan Sales in Queensland: How to Find the Right Caravan for Sale QLD

Caravan ownership is about more than having somewhere to sleep while travelling. For many Queenslanders, it is one of the best ways to explore regio...

What Sir Walter Buffalo Turf Actually Costs in 2026 (And Why Quotes Vary So Much)

Two quotes landed on a Hills District homeowner's kitchen table last spring for the exact same 80-square-metre backyard. One said $12 a metre. The o...

Nearly 1,300 NSW Hospital Beds Are Occupied By People Who Are Ready To Go Home

1,276 people in NSW hospitals have been medically cleared for discharge but remain in hospital because they're still waiting for NDIS or aged care sup...

National Survey Launched to Measure Operational Impacts of Federal NDIS Policy Reforms

The effects of recent NDIS reforms are beginning to move beyond policy papers and into day to day service delivery. A new national survey is asking ...