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Media Release by Senator the Hon Amanda Vanstone

Smith Family Report on Poverty

Minister for Family and Community Services, Senator Amanda Vanstone, today welcomed the release of the Smith Family’s report on poverty, but urged caution in considering its conclusion that more Australians are in poverty.

“While the Smith Family report, prepared by NATSEM*, is an important element of the debate on poverty in Australia and ways to address poverty, it is important to understand that it does not provide the total picture,” Senator Vanstone said.

“The report is out-of-date because it doesn’t include the significant increases to benefits provided to low and middle income earners as part of tax reform from July 2000.

“NATSEM itself has produced more up-to-date research showing low and middle-income earners now enjoy much higher disposable income than they did in 1996.

“Also, the NATSEM study measures poverty as earning below 50% of average wages. There will always be people below this benchmark. Under this ‘relative measure’ even those below 50% of average wages who have experienced significantly improved real income and benefits are still deemed to be in poverty.

“Similarly on the NATSEM measure, people with no real change in their own circumstances can be deemed to move in and out of poverty as wages move up or down according to prevailing economic circumstances.

“Of course, the most important and fundamental benefit anyone can provide to those struggling on limited incomes is a strong economy with jobs growth and wages growth.

“There can be no doubt that, on that measure, the Howard Government has delivered.

“NATSEM’s own research on disposable incomes shows significant increases for individuals and families between 1996 and 2001 as a result of Federal Government initiatives such as increases in Family Tax Benefit, increased Child Care Benefits, lower income tax rates and increases in pensions and allowances.

“For example a sole parent, not working, no child care and receiving rent assistance, is more than $66.00 extra each week better off under Howard Government policies.

“A couple with two children in which one partner worked full-time and the other didn’t work is more than $88.00 per week better off than they were in 1996.

“There can be no doubt that individuals and families on limited incomes or income support are constantly battling to make ends meet.

“But the increased support provided by the Howard Government to these very groups should be acknowledged.”

*National Centre for Social and Economic Modelling