Voluntary and involuntary poverty: an examination of the chief causes of the condition of poverty in Australia

To be in relative poverty is to be excluded from the normal activities and acceptable standard of living in one’s community. In order to determine whether poverty in Australia is due to involuntary or voluntary causes a detailed examination is undertaken of the causes of disadvantage and the groups on whom these causes are impacting. Poverty is defined as involuntary when it is caused by factors outside of individual control, or where choices are so limited that one cannot escape from poverty. Nationwide evidence and a case study of poverty in the Newcastle region suggest the following indicators of involuntary poverty: Structural unemployment, Excess of job seekers over job vacancies, Polarisation of job growth into high skilled and low-paid low-skilled work, Decline in social expenditure, Lack of access to affordable childcare services, Increased cost of further education, Mismatch of education with areas of job growth, Unequal access to the internet, Inadequate provision of public transport, Relatively low expenditure on health of low-income groups, Decline in bulk billing, Decline in availability of low cost housing, Below poverty line welfare payments, High effective marginal tax rates for welfare recipients entering paid employment. Secondary indicators produced by the above causes include the presence of cohorts of poverty and locations of disadvantage (postcodes of poverty). A statistical analysis of poverty in Newcastle shows that the variance in the log of odds of poverty between Newcastle’s suburbs is largely due to variations in cohorts of disadvantage and structural causes. This supports the hypothesis that the majority of poverty in Australia is involuntary. It is necessary that the government acknowledge that poverty is largely involuntary so that Australia can shift from a culture of blame to one of mutual responsibility. Government and community action is required to rectify the causes of involuntary poverty. This can be achieved through job creation schemes, sufficient compensation for the unemployed and other groups of disadvantage, adequate and affordable provision of infrastructure and services, such as public transport, childcare, health care, public housing and education. The result will be a more cohesive society with equal opportunity for all citizens and improved social and individual welfare.