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The Forum > Article Comments > A chasm of inequality? Really? > Comments

A chasm of inequality? Really? : Comments

By Peter Saunders, published 14/6/2005

Peter Saunders argues the St Vincent de Paul report is alarmist and hysterical.

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With regard to increased numbers of recipients of Social Security payments, I am well aware that middle class welfare payments have been the area of greatest increase since the advent of the Howard government. However, it is clear there has been a significant increase in payments of benefits and pensions (hence not listing allowances). Part of this increase probably results from significant regressive changes to health and work insurance - making insurance companies more profitable at the expense of accountability of employers and a reasonable requirement to make work places safe. A cursory look at CPI figure changes, removing things like furniture and entertainment shows that CPI since the end of the Sept quarter 2003 to the end of the quarter Dec 2004 has grown 38.2%, while the highest paid pension (Aged or sole parents) has grown 13.6% and unemployment benefit by 7.8%. I agree a more intense breakdown of what is measured in CPI would need to occur, but I don't have access to those sort of resources (not being in a think tank)! I suspect the true picture is significantly worse and would just substantiate the fact that our average client in the North West Suburbs of Melbourne, when paying a private rent of $200 per week on a base pension of $280, including rent assistance, but not payments for the children, is unable to cope by any reasonable standard.
Posted by Rene P, Thursday, 16 June 2005 12:22:36 PM
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Rene

I’m not sure where you got your CPI numbers, but they’re wrong. The all groups CPI rose by 3.3% between Sep ’03 and Dec ’04, the CPI excluding household goods rose 3.4% and excluding recreation rose 3.4% in this period. Over the whole of the past 10 years these indexes each rose in total by about 30%. You still haven’t backed up your contention that:

“look carefully at what is measured in CPI, the use of average increase in CPI blurs the fact the basic costs of living, ie those that families out here are most likely to spend their meager incomes on have increased at a far greater rate than what the CPI represents.”

It seems to me you haven’t looked carefully at the CPI at all.

Centrelink’s total clients number more than 6 million, but these include recipients of dozens of programs, including education, training and business assistance, not just pensions and benefits.

I’m not disputing that people living on benefits have it tough. But I believe two of your three initial criticisms of Saunders’ article are wrong, namely that low income data are reliable (Saunders is correct to point out that the ones the Vinnies report uses are not), and that benefits have not increased to keep pace with the cost of living.

As already mentioned, I agree with your third point about the disincentive effects of taxes; so, I suspect, would Saunders.
Posted by Rhian, Thursday, 16 June 2005 3:47:43 PM
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Thanks Rhian - but I downlaoded the figures I used from the ABS web site - perhaps they as statisticians need to join the Vinnies as well ! Rene
Posted by Rene P, Friday, 17 June 2005 10:06:19 AM
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Rene, I respectfully suggest that you have misinterpreted the data.

It is impossible that “removing things like furniture and entertainment shows that since the end of the Sept quarter 2003 to the end of the quarter Dec 2004 has grown 38.2%.”

Over those five quarters NO components of the CPI increased by that much. The largest increases for any of the CPI component groups or sub-groups were in the prices of fresh fruit vegetables (22%, due to the effect of the drought) and automotive fuel (14.8%, due to the rise in the world oil price).
Posted by Rhian, Friday, 17 June 2005 11:47:12 AM
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I know I am not a statistician and it does take some assembling of data off the ABS web site. I am not dealing in averages when I add the CPI change as occurred in each quarter, I am dealing with the actual increase - having just assembled the data again, I still get the same result !! Do we now get into the semantics of experts or is that enough ?
Posted by Rene P, Friday, 17 June 2005 12:56:56 PM
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Does anyone have any reliable statistics on the number of people who receive unemployment benefits and smoke.

Anecdotally and from experience in my community, it seems a lot of people who are below the poverty have money to spend on cigarettes, beer and the pokies yet not on healthy meals for their kids.

I know some people do struggle even with their priorities right and we should try to help them but i have no sympathy for the people who go out on pension day and buy a carton of smokes a carton of beer and put $50 in the Queen of the Nile.

DOCS and Centrelink should be on to these people. perhaps food vouchers should be introduced rather than cold hard cash.

Although Centrelink is incompetent enough as it is without extra responsibility ...

t.u.s.
Posted by the usual suspect, Friday, 17 June 2005 3:37:40 PM
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