Issue Brief 9 / 1996

Indigenous children and income poverty

Child poverty and employment issues are continuing concerns of government. This study confirms the commonly held view, that income poverty is much higher in the Indigenous than the non-Indigenous population.

• Nearly half of all Indigenous children are in families with incomes below the Henderson poverty lines compared with around 18 per cent of non-Indigenous families.
• Two-thirds of Indigenous families are 'poor' or 'rather poor'.

Method and data

This study, one of the few since those of the Poverty Inquiry in the 1970s, uses the 1991 Census and the 1990 Income and Housing Costs and Amenities Survey to produce estimates of poverty amongst Indigenous families. It updates a similar study using data from the 1986 Census.

The Henderson poverty lines are levels of income calculated before housing costs. If families are below these levels they are considered to be living in poverty. Levels were adjusted for family size and composition.

Reasons for Indigenous poverty

Employment

The major reason for Indigenous poverty is the lack of employment of a family member.

• More than 50 per cent of all Indigenous families have no employed adult, compared with less than 20 per cent of non-Indigenous families.

However, poverty is still higher amongst those Indigenous families in which at least one adult has a job than it is amongst similar non-Indigenous families. Some reasons for this are:

• greater labour force participation among non-Indigenous families, either because of the greater likelihood of two-earner families or because of their greater amount of full-time rather than part-time work.
• wage rates for employed Indigenous persons are lower than those for other employed Australians.

Other reasons for poverty

Poverty in Indigenous families also seems to be linked with:

• the far higher proportion of children in the Indigenous population as a whole. Over 19 per cent of Indigenous couples with children have four or more children compared with 6 per cent of non-Indigenous couples.
• the large proportion of these Indigenous children who are in sole parent families or large families. Nearly 37 per cent of Indigenous families with children are sole parent families compared with only 19 per cent of the non-Indigenous population. Over 30 per cent of Indigenous sole parents have three or more children, compared with only 17 per cent of non-Indigenous sole parents.

Comparison with 1986

While the table below indicates no general trend in relative poverty levels, the same general conclusions that apply in 1991 also applied in 1986 - that the incidence of poverty is far worse among Indigenous families than among other Australian families.

Table 1: Comparison of proportion of Indigenous and non-Indigenous families below 
the Henderson poverty line, 1986 and 1991.

Source: 1986 estimates - Ross and Whiteford (1992); 1991 figures - Ross and Mikalauskus (1996).

Policy implications

The estimates presented in the paper refer to 1986 and 1991. Whether the number of Indigenous families below the Henderson poverty line has fallen since 1991 is uncertain, but it is possible that the gap is reducing slowly. Although poverty rates remain high amongst Indigenous families, the evidence from the studies is that it may have declined since the 1970s, particularly among couples with children. Indigenous sole parents, however, remain in poverty. While improvements in income support payments mean that many Indigenous families have moved just above the poverty line, they remain poor as their incomes are within 20 per cent of it. These improved family payments are important and indicate government commitment to solving the problem of child poverty. However, the lack of employment prospects must continue to be the focus of policy if poverty is to be reduced and not just alleviated.

R.T. Ross and A. Mikalauskus.

This Issue Brief summarised CAEPR Discussion Paper No. 110, 'Income poverty among Indigenous families with children: estimates from the 1991 Census' by R.T. Ross and A. Mikalauskus published in July 1996. It was prepared by Linda Roach, assisted Melissa Lucashenko, and edited by Maureen MacKenzie-Taylor.