The ACT Council of Social Service (ACTCOSS) has today released its tenth of twelve 2020 ACT Election issue briefs calling for targeted action to address cost of living pressures for low-income households in the ACT. This coincides with the release of ACTCOSS’s annual ACT Cost of Living Report.
ACTCOSS CEO, Dr Emma Campbell, said: “Amidst the prosperity, significant poverty exists in the ACT. Approximately 30,000 Canberrans live below the poverty line.
“The ACT has the highest average weekly earnings in Australia. However, for those on low incomes, the cost of living in Canberra means many cannot afford the fundamentals of a healthy life such as food, housing, health services, and energy.
“Our 2020 ACT Cost of Living Report shows that over the past five years changes in the cost of living have hit Canberra’s low-income households the hardest. These households spend a greater proportion of their income on essential goods and services. Over the last five years, prices for some of these essentials grew significantly in Canberra, with medical and hospital services increasing by 28%, electricity and gas prices rose by 25% and 31% respectively, and housing costs increased by 15%.
“The ACT has the highest median rent for houses. House rents have increased by 28% over the past five years. In August 2020, Anglicare found that out of 768 private rentals advertised in the ACT, only 17 properties could be considered affordable for people on low incomes. None were affordable for a single person on the Disability Support Pension and only one was affordable for a single person on JobSeeker receiving the $550 per fortnight Coronavirus Supplement. Without the supplement there would have been none.
“Ensuring that people have adequate incomes and affordable housing is fundamental to reducing poverty and inequality in the ACT. We need a permanent and adequate increase to JobSeeker and related income support payments, to levels above the poverty line, to enable people to cover all basic costs, including keeping a roof over their heads.
“We are calling on the next ACT Government to urgently address the shortfall of over 3,000 social housing dwellings in Canberra.
“The next ACT Government needs to take a targeted approach to cost of living – one that is informed by a detailed understanding of community need. We need a system of taxes and charges that is more progressive, equitable and efficient.
“To achieve this, targeted concessions, rebates and subsidies must be designed to relieve cost of living pressures for households with low incomes or experiencing other forms of hardship. Tax revenue must be sufficient to fund quality services, affordable housing, and community infrastructure that address the structural causes of poverty and disadvantage while benefiting all of us.”
Dr Campbell concluded: “Better, fairer taxes and charges are key to Canberrans sharing our prosperity, alleviating poverty, and reducing inequality. For most of us, the ACT offers an excellent quality of life and supports a strong sense of wellbeing. A just and fair Canberra requires an inclusive economy – an economy that addresses the barriers that a significant number of people in our community face to sharing this experience. By reducing inequality, targeted measures, that address cost of living for people experiencing these barriers, will benefit everyone.”
Find ACTCOSS’s 2020 ACT Election issue brief on cost of living here.
Find other issue briefs at ACTCOSS’s ACT Election page.
Find the 2020 ACT Cost of Living Report here.
ACTCOSS advocates for social justice in the ACT and represents not-for-profit community organisations.
For more information or comment, please contact
Dr Emma Campbell, CEO, ACTCOSS, on 0424 910 617 or 02 6202 7200.
2020 ACT Cost of Living Report Key Findings
Approximately 30,000 people live below the poverty line in the ACT
- The latest estimate of the national poverty line for a single person is a minimum income of $457 per week
- Before the COVID-19 health emergency, it had been estimated that 8.6% of the total ACT population were living below the poverty line, equating to approximately 30,000 people.
The rate of Newstart was well below the poverty line and failed to keep up with cost of living
- As at December 2019, the weekly Newstart (now JobSeeker) payment for a single person without children was $173 below the poverty line
- In the year from December 2018 to December 2019, Newstart recipients effectively experienced a reduction in income due to the payment failing to keep up with changes in the cost of living.
The Coronavirus Supplement increased JobSeeker above the poverty line
- The introduction of the $550 per fortnight Coronavirus Supplement from 27 April to 24 September 2020 saw JobSeeker (formerly Newstart) rise above the poverty line by $105 per week – finally becoming adequate to meet basic living costs for many recipients.
- When the Coronavirus Supplement is reduced, JobSeeker will return below the poverty line and see over 1,000 jobs lost in the ACT
- The reduction of the Coronavirus Supplement by $300 per fortnight from 25 September 2020 will see these payments drop below the poverty line again by around $45 per week. The complete removal of the supplement at the end of the year would see this poverty gap increase to $170 per week.
- The economic impact of the removal of the Coronavirus Supplement would be a loss of 1,120 full-time equivalent jobs in the ACT in 2021-22.
The number of people in the ACT looking for work while on JobSeeker and Youth Allowance has more than doubled during the COVID-19 pandemic
- From December 2019 and July 2020, the number of people in the ACT who were looking for employment while in receipt of JobSeeker and Youth Allowance more than doubled from just over 6,500 to just under 15,000.
- Without the Coronavirus Supplement, the number of people in the ACT living below the poverty line could increase to around 40,000
- Without the Coronavirus Supplement, the number of people in the ACT living below the poverty line could increase by around 25%, approaching 40,000 due to there being additional 8,500 JobSeeker and Youth Allowance recipients than before the COVID-19 pandemic.
Changes in the cost of living have hit Canberra’s low-income households hardest, with significant increases in housing, health, and energy costs
- Consistent with previous ACT Cost of Living Reports, changes in the cost of living over the past 12 months and five years have hit Canberra’s low-income households the hardest.
- Over the past five years, housing, health, and energy prices in Canberra have risen at rates that were higher than the national rate and above the overall Consumer Price Index (CPI).
- Over the past five years, the CPI for housing in Canberra has increased by 15%.
- Housing is the most significant cost for low-income households, the majority of whom rent – around 9,500 out of 22,000 low-income rental households in the ACT (43%) are experiencing rental stress, paying over 30% of their household income on rent.
- Over the year from June 2019 to June 2020, the ACT was the only state or territory where rental affordability declined.
- The latest Anglicare Australia Rental Affordability Snapshot undertaken in August 2020 found that out of 768 private rentals advertised in the ACT, only 17 properties could be considered affordable for people on low incomes – only one of these was affordable for a JobSeeker recipient with the Coronavirus Supplement. None would have been affordable without the supplement.
- Over the last five years, the CPI for health in Canberra increased by 22% with medical and hospital services prices increasing by almost 28% and dental services increasing by over 11%.
- Over the last five years, electricity and gas prices in Canberra have risen by 25% and 31% respectively.
Find out more in the 2020 ACT Cost of Living Report.