Australian Definition of Poverty

DIFFERENT COUNTRIES and organizations have struggled with the need to define poverty in order to develop standards for identifying the people who are actually poor. The measure that defines poverty must at the least be an indicator of the number and proportions of people who lack incomes necessary to provide themselves with sufficient food, goods, and services to not only maintain life, but to do so at a level that approximates the level for most people in a particular society.

Australia has developed a definition of poverty based on a family in which the household lacks enough weekly income to support a man, his wife (who is not working), and two children. This definition is not unanimously accepted. Many authors on poverty have produced different results when evaluating whether or not Australia is providing adequately for its poor.

The issue of the proper definition of poverty is very important; however, the problems associated with measurement have been so debated that a consensus or level of inequality and poverty has emerged in Australia that have found acceptance. The amount of poverty in Australia has become a point of dispute because some authors has claimed that it has risen, while others claim that it has fallen. These disparate claims also report widely varying statistical differences. The reason for the differences, analysts argue, is the different aspects of income and the different methods used to analyze poverty. Poverty trends vary because the statistical interpretations of data do not agree.

An important contributor to the issue of the definition of poverty in Australia is the significant limitations inherent in the Henderson poverty line. The Henderson measure was developed in the late 1960s. At that time it measured poverty closer to an “absolute” poverty line. It was defined as the basic wage plus child endowment for a couple with two children. The assumption was that this 1960s definition was so austere that it would be unchallengeable.

Aborigines in Australia are among the country's poor who are supported by the federal government.

The Commission of Inquiry into Poverty used the Henderson poverty line in 1973. The commission constructed the first national standard for the amount of poverty in Australia. It issued a report in 1975 that updated the Henderson line to reflect the changes in average weekly earnings then current in Australia. The commission's updating line was named the Henderson poverty line (HPL) after Professor Ronald Henderson, the chairman of the poverty inquiry.

Since the 1970s updates of the HPL have been made, but it has remained a benchmark that government [Page 56]measures benefits as sufficient or not. Despite criticisms and recognized problems to date, an adequate replacement has not been advanced.