The growing cost of living poorly

Public transport, as I indicated earlier, is another service that has sky rocketed in price. While the cost of buying a family sedan has actually dropped below what it would have cost in 1990, ticket prices for public transport in Melbourne have soared about 134 per cent above the inflation rate. (ABS Cat. No. 6455) This suggests households that are more reliant on public transport for travel have experienced, and will continue to experience, far greater relative costs than households that can afford a car.

Affordable housing and childcare are also moving increasingly out of reach for ordinary Australians. A recent study by the Australian Institute for Health and Welfare, Australia’s Welfare 2005, has shown that 883,000 lower income families and singles are suffering from housing stress, spending anywhere from 30 per cent to more than 60 per cent of their weekly incomes on housing. Of the 1.7 million Australians struggling to afford to keep a roof over their heads, more than two thirds are in private rental.

As all parents know, childcare is now hugely expensive. For single parent families, who have been shown to use twice the amount of formal childcare than hours worked - due to a lack of availability of informal care - childcare costs can rival rent as the most significant element of weekly expenditure.

Since 2001, the cost of childcare has exploded. The most recent CPI figures show that over the past financial year (2004-05), the cost of childcare in Australia shot up by 12 per cent; over the previous year, the cost rose by more than 10 per cent. As a result, the increase in the cost of child care over the past two years has been about four times higher than the general inflation rate, contributing to plunging affordability rates and making working longer hours less financially attractive to households reliant on formal childcare.

To put this increase in perspective, over the same four-year period, the Child Care Benefit paid to parents has risen by only 37 cents an hour. For a government hopeful of filling present and future workforce shortages by encouraging single mothers back to work, the escalating costs of childcare could be seen to act as a permanent barrier to parents looking to move from “welfare to work”.

What the policies of tax reform, such as the Goods and Services Tax and the shift to a “user pays” system of essential services have achieved is to lower the cost of luxury items such as cars and DVD players at the expense of the cost of an education - a child’s best chance of getting a head start in life. The soaring price of tickets charged by Melbourne’s private, “public” transport operators has left many low-income Australians, particularly on the urban fringes, at risk of social exclusion and alienation. While the cost of renting a one or two-bedroom unit in or around the CBD has remained steady or fallen for Melbourne’s white-collar workers, low-income families are forced to move further and further away from services, such as good schools and hospitals, in search of cheaper rents. The soaring costs of accessing hospital and medical services, coupled with the decline in availability of bulk billing, is pushing “preventative” health care beyond the reach of many. Even the cost of buying a loaf of bread and a litre of milk has risen 90 per cent above the inflation rate.

While those on low incomes may have seen their weekly income rise by about 12 per cent in “real terms” since the mid-1990s, the concurrent rises in the cost of living for these households has contributed to their declining standard of living.

This is a fact of life for many in Australia 2005. Not only are the poor becoming poorer relative to higher-income Australians, they are also becoming poorer compared to their own standard of living. That is the reason why social welfare organisations, such as Jesuit Social Services and St Vincent de Paul, handed out so many more hampers this Christmas; that is why so many Australian children did not be wake up to presents under the tree.

We should spare a thought for those who are living poorly in our society.