Government can’t afford to cry poor on poverty
There is a curious and cruel paradox that anyone who has experienced poverty knows – the less money you have, the more everything costs. It’s sometimes called “Boots Theory” after a character in a Terry Pratchett book who reflects on how a really good pair of boots that cost $50 would keep your feet dry for 10 years, but an okay-ish pair of boots that cost $10 would only last a season. Rich people get richer, he surmises, because they spend less – $50 every 10 years instead of $100.
Mention this poverty tax to any frontline Salvos worker and they will tell you stories: Of the harried mum driving on bald tyres because even though she knows a fine (let alone an accident) will cost more, she needs to feed her kids. Of the young person buying expensive ready meals, knowing that cooking from scratch is cheaper, but they don’t have access to a kitchen.
The people we see make every dollar stretch to a limit that is astonishing. They make heroic budgeting choices. Seventy-seven per cent of the people we surveyed before Christmas feared they would not be able to afford enough food for their families to eat – they said they felt shame and guilt.
Which makes it hard to hear the government using much the same language to say no to raising JobSeeker. There simply isn’t room in the budget to allow people to live with dignity.
Like driving on bald tyres or buying okay-ish boots, the government has also fallen for a false economy, but we will be the ones paying the poverty tax. Putting off raising JobSeeker to a reasonable level might save money in the short term, but it is going to cost us a lot more in the long.
We are all familiar with the phenomenon of people showing up to emergency rooms because they can’t afford a GP. At the Salvos, we see people needing costly medical interventions that could have been easily avoided if only they could afford their medication. How much does that cost the health system?
There is a well-documented link between financial hardship and an increase in the severity and prevalence of family violence. Financial hardship after leaving an abusive relationship makes it harder for victim survivors to rejoin the workforce. Family violence costs Australia at least $34 billion a year[1]. How much of that is because we don’t have adequate income support?
At the Salvos we see mental ill-health everywhere. It is a cause, result and amplifier of every other form of hardship. Mental health costs Australia around $200 billion a year.[2] How much of that could be prevented by letting people live with dignity?
Child poverty leads to poorer educational, employment and health outcomes, intergenerational welfare dependence, lost revenue and ongoing government expenditure. It costs the UK around £78 billion a year.[3] In the US, it could be as high as $1 trillion.[4] The cost to New Zealand could represent as much as 9.1 per cent of their total GDP. We don’t know how much it costs Australia – but it won’t be less.
These days every Australian can sympathise with the idea that we can’t afford something, but that’s not really true of JobSeeker. There is money in the budget but raising JobSeeker would involve some tough decisions. We are all getting used to tough decisions. If you have to make a sacrifice now to save money in the long run, then that’s what you do.
You don’t need to be an expert to see the sense in buying the good boots, and you don’t need to be a treasurer to see the sense in raising JobSeeker.
Jennifer Kirkaldy is the ³Ô¹ÏÍøÕ¾ General Manager of Policy and Advocacy at The Salvation Army Australia.
The Salvation Army will be making submissions to both Senate inquiries into the rising cost of living and the nature and extent of poverty in Australia. Jennifer will be appearing before the inquiry into the rising cost of living in Sydney on 1 February 2023.
