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It's time we ended politically induced poverty


It’s been a little over ten years since mining magnate Gina Rinehart suggested that workers are being grossly overpaid, approvingly citing the example of workers in Africa who were ‘willing to work for less than $2 per day’. Such a dire situation (the alleged overpayment, not the unconscionable underpayment) was, according to the mining magnate, evidence ‘that Australia is becoming too expensive and too uncompetitive to do export-oriented business’. As a result of these comments, Rinehart was singled out for what many would consider to be appropriate excoriation. The truth of the matter is, however, she was simply saying what others of her class were thinking.

Jobseeker payments have just been indexed for inflation and increased this week by $24.70 a fortnight, or the princely sum of $1.77 a day, taking it from $47.75 to $49.50 a day. This is still 57 per cent below minimum wage and 34 per cent below the age pension.

One can hardly talk about it as an increase since it is merely a way of acknowledging the decrease, in real terms, in the value of this and other income support payments in the face of a period of severe inflation due to a cost-of-profits crisis.

We do an enormous disservice to the people who are forced to wage a daily battle from below the poverty line when we frame this as an issue that is somehow separate from everything else happening in society, including its economic base.

In the kind of world yearned for by many of those controlling the biggest chunks of capital, giving them permission under the current socio-economic formation to exploit labour, even the lowest paid workers would be paid less than they currently are. And what better way to incentivise workers to accept unconscionably low wages than by making sure the alternative — having to live on unemployment payments — is even worse! According to this line of thinking, income support payments, if they are to exist at all, should be so low that the recipients will be fighting each other for jobs that offer even the most execrable working conditions and below-poverty-line wages.

It is no accident that the neoliberal period of capitalism saw both the systematic dismantling of essential social infrastructure (including social security) and the strategic undermining of the capacity for working people to collectively organise and bargain for decent pay and conditions. Where has this gotten us? A place where multinational corporations are encouraged to avoid taxes; a place where precarious work has been normalised, effectively rendering the minimum wage and minimum working conditions (such as sick leave) meaningless for many, and where the social security system parks people in a state of permanent social insecurity; a place where the labour market no longer opens the door, especially for younger workers, to the housing market.


'If we want to prevent poverty we need a more equitable distribution of income, especially for those who are on income support payments or low or insecure wages and the building and buttressing of a safe, democratic and respectful socio-economic space. It means creating the kind of society where housing is a right enjoyed by all, not a speculative sport for some and a lottery for others.'


For decades, we have seen the emergence of a troubling consensus on the acceptance of the falsehood that people who are living in poverty, more than anything else, need ‘tough love’ paternalism. And for decades this dominant policy frame has not only failed to reduce poverty and inequality but has made life harder for the people it was purportedly designed to help.

Poverty is, above all else, a power relation. Typified by income inadequacy and housing deprivation, it is a means of deliberate disempowerment, a structural and historical violence done to people, not an individual state passively or accidentally experienced by people. Nor is poverty a choice by those who are forced to experience it, as per former British prime minister Margaret Thatcher’s argument that poverty in Britain was ‘not material but behavioural’.

Poverty is a choice, a political choice though, not a personal one. And poverty is material. But it is also more. That it is primarily a power relation is evidenced in the poverty experienced on the basis of gendered violence, unequal (or absent) bargaining power, colonisation, ableism, queerphobia, ageism and exclusion from secure work, adequate income security, or housing. It is also evidenced by the shame and humiliation that is often carefully manufactured and imposed.

In 2004, the Senate Community Affairs References Committee tabled its Report on poverty and financial hardship. The report contained valuable insights and some excellent recommendations, including an increase to the base rates of allowances, the guaranteeing of standard entitlements, such as annual leave and sick leave, for labour hire workers, and a new minimum wage benchmark.

The evidence given to that inquiry 20 years ago is unsurprisingly familiar. Much of it, such as the following testimony by Margaret Clarke, from Byron Bay, may well have been given in 2023 rather than 2003:

‘Like millions of other low-income Australians, I am one of the hidden poor, just keeping afloat. We are flat-out treading water here. We are making very little headway towards our aspirations, and we are one crisis or catastrophe away from the poor box. We are living on the edge.

‘We live in the shadow of the dismal statistics. We are not mad, bad, sad or totally dysfunctionally overwhelmed by life circumstances. Many of us are highly skilled and well educated. We are all doing what we can to contribute to society with the resources we have. Our poverty is poverty of resources, services and opportunities … it is getting too hard to make ends meet, let alone work towards our dreams.’

A rising tide may well lift all boats, but if you have no boat, you’re lucky to be ‘flat-out treading water’, always on the verge of, if not actually, drowning. As things stand, a tiny minority of us have luxury yachts, while many are lucky to have a lifejacket or the most rudimentary of watercraft.

We are accustomed, at worst, to painting those who are barely treading water as the problem. At best, we acknowledge the roughness of the sea, the wild fluctuations of the global economy, resulting, for example, in high unemployment followed by periods of steep inflation.

It is certainly important to stabilise economic conditions. But the crux of the issue is twofold: the allocation of ‘boats’ and the construction of a ‘safe harbour’.

If we want to prevent poverty we need both: a more equitable distribution of income, especially for those who are on income support payments or low or insecure wages; and the building and buttressing of a safe, democratic and respectful socio-economic space.

It means creating the kind of society where housing is a right enjoyed by all, not a speculative sport for some and a lottery for others. It means ensuring that social security payments actually protect us from precarity rather than exposing us to it. This is the allocation element and, given the political will, can actually be achieved relatively quickly. Witness, for example, the speed with which even the Morrison government, albeit all too temporarily, implemented a life-changing increase to social security payments at the height of the pandemic.

The safe harbour element is more of a long-term project. But we need to start on it now! It is a reconfiguration of first principles. Equitable allocation of income and housing must, in order to be sustainable, be anchored in the safe harbour of a protected planet; a society that acknowledges, and responds to, the rich, ancient history of the First Nations, as well as the violent and ongoing social crime of colonisation. A safe harbour means shaping our economic activity to serve the needs of people rather than pandering to the greed of profiteers. It means socially useful work. It means healing. It means respect, reverence and celebration, as well as space for the work of mourning and the collective work for liberation, under the guiding stars of struggle and hope.




Dr John Falzon is Senior Fellow, Inequality and Social Justice at Per Capita. He was national CEO of the St Vincent de Paul Society from 2006 to 2018. He is a member of the Australian Services Union.

Main image: Silhouette of a man sitting with head nodded at bus stop terminal. (Ross Tomei / Getty Images)

Topic tags: John Falzon, Jobseeker, Centrelink, Employment, Neoliberalism, Poverty, Welfare



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Existing comments

Whilst i agree with a lot of this view, I still take umbrage at the number of people who just refuse to look for work, let alone work.
It is about time that people who do not work had to prove they cannot work so those under privileged people with disabilities etc can get higher benefits. No work no pay unless you cannot really work for medical reasons.

PHIL ROWAN | 23 March 2023  

Thanks for the article, John. I think our major problem is that we allow uncontrolled profiteering. We live in a society where profit is lauded and held to be the epitome of existence but there is no analysis or criticism of what that means. A clear example: rising gas/electricity prices are blamed on Putin and we are all told to tighten our belts. But when exactly did Putin attack our gas and coal producers? That never happened. It's all about the accepted "wisdom" that short supply means high demand and therefore higher prices are justified. But in fact, that's actually called greed. We all live in a society. That means we agree to the compact that exists to maintain that society: things like road rules, tax, and so on. These things keep our society functional. But when a large part of our society refuses to be part of that compact, when we value making money as far more important than keeping our society in good order, we are in trouble. When we finally manage as a society to control businesses so that the good of society is an imperative greater than making excessive profits, we may make some progress on the issues you raise. Until then, I think you are whistling in the wind.

Erik Hoekstra | 23 March 2023  

Sadly, we still have policy-capture by the wealthy. ALP or LNP - makes no difference. They pursue policies that ensure security of profit for the wealthy not the well-being and security of people. Indeed, they put people at risk with their traitorously abysmal policies on climate change, their blind adherence to the notion of war-mongering, and their childish attachment to the greatest ever war monger nation, the US.

phil | 23 March 2023  

Thanks John, well said. And thanks for all you have done and are doing too.

Frank S | 23 March 2023  

"It means creating the kind of society where housing is a right to be enjoyed by all, not a speculative sport for some and a lottery for others."
Let's frame and hold that thought, and translate it into political and social action.

John RD | 24 March 2023  

Very well put!. Neoliberalism is cruel!. It is there purely to benefit capital investors. The housing and labour markets are classic example where the private sector has used the basic rights of a steady job and a place to live, for profit. Western society today is very unstable and the impacts are higher divorce rates, more suicides, homelessness, drug addiction, violent crime, zero respect for others. Its unsustainable. Why do we need nuclear weapons to protect what is, an undesirable situation? or are they there to be used to protect capital investment?

Cam RUSSELL | 24 March 2023  

I totally support John's standpoint. Over my lifetime of 74 years I have seen a almost concerted campaign by the welloff captains of industry to reduce the well-being of the working class who produce the goods that that give these titans of industry the obscene profits and lifestyle they enjoy. Reinhardt is a classic example of their thinking.
I was a career long union member and witnessed the campaign to reduce our power to bargain for the 'fair go for ordinary Australians.
Unfortunately both sides of politics have failed to support ordinary Australians as witnessed by the rise of the "Teals". Now retired I fear for my children and grandchildren's well being.

Gavin A. O'Brien | 24 March 2023  

Thank you very much for what you’ve written John.
Many of us are feeling deeply depressed seeing our neighbours struggling so severely on terribly low incomes, and not able to pay for rent, food, education, and medicine, and being generally unable to meet the daily costs of living.
You offer constructive solutions to this terrible situation.
John, I’d also really appreciate it if you, Per Capita, the Australian Union Movement, and Churches, supported the global movement for a Universal Basic Income, a regular government payment to everyone, enabling all people to meet their daily basic needs.

Robert Van Zetten | 24 March 2023  

Cam Russel. "Western society today is very unstable, and the impacts are higher divorce rates, more suicides, ..., drug addiction , violent crime, zero respect for others. You left out violent public entertainment, increased homosexuality, widespread abortion and same sex "marriage". However, despite these admissions you have given an accurate description of the fall of the great Roman Empire, an event that took 300 odd years for its completion. We in Western Judeo- Christian society, led on by the abysmal USA, are achieving the same decline and destruction of our society much more rapidly and efficiently over the last 50 years in the wake of the 1960's revolution and the uncertainties and faith/belief destroying implications of Vatican II. Sad in the extreme. "And Jesus wept."

john frawley | 25 March 2023  

Good article, John, but we can and should take it a step further. Unemployment is a choice - a deliberate choice by our policy makers to make some people unemployed to keep wages and inflation down.
Back in the 50's and 60's there was a deliberate policy of full employment. Since the advent of monetarism and neoliberalism, the RBA and other policy wonks now aim not for full employment (because they believe that drives inflation up) but for the Non-Accelerating Inflation Rate of Unemployment (NAIRU) - the lowest unemployment rate that can be sustained without causing wages and inflation to rise.
So the unemployed are performing an important social function - the sacrificial lambs driven into poverty, despair, ill-health and sometimes suicide, so that the rest of us can enjoy a low inflation environment.
Instead of rewarding them, our neoliberal capitalist society blames the victims for their predicament. Charming!

Peter Schulz | 26 March 2023  

Thank you John for this timely reminder of the real causes of poverty that we are seeing in our current very unequal economic society.

Findings released by the Australian Council of Social Service (ACOSS) in 2021 show that the top 10% wealthy Australians own nearly 50% of the wealth.


Mike Secombe in an article titled Rent Asunder in The Saturday Paper 20-26.5.2023 quotes a 2023 Anglicare report which showed that before the 2023 budget was handed down, there were only 4 affordable places available for a single person on JobSeeker. All of them were rooms in share houses.

After the budget was announced, Anglicare checked what improvements had been made and discovered that there were 5 affordable places for people who needed government assistance to survive!

What a ground-breaking improvement!

This budget was announced by the Albanese Government as making a real difference for battling Australians. and gave itself much self praise in the process.

It seems to me that more people should be taking umbrage at the fabulously wealthy citizens like Gina Rinehart who have the audacity to suggest ordinary people are overpaid while they themselves pay minimal or no tax and skimp on decent conditions and resist best standard health and safety legislation for those who actually do the work to provide the wealth for these people.

Surely, thinking and caring Australians should be positively outraged by governments that hypocritically claim to be making a big difference for people doing it hard while at the same time giving billions to the large corporations and the mega wealthy and agreeing to pacts like AUKUS that will spend $368 billion on nuclear submarines we do not need for out defence.

We need a responsible government that will give priority to those who are struggling financially, provide affordable public housing, expand the building industry and will provide many more jobs in renewable energy recycling, housing construction and other socially useful programs instead of embedding us further into US war mongering.

We have yet to see such a government on the horizon.

Andrew (Andy) Alcock | 28 May 2023  

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