Rene,

The article does not say that measurement of Centrelink payments is unreliable, but that data quoted by the Vinnies report (for the lowest decile of incomes quoted in the ABS survey) are unreliable, a fact well-known among social policy researchers.

Centrelink and related pensions are adjusted automatically every six months explicitly to keep pace with the Consumer Price Index, and, with occasional increases over and above this, have increased by more than the cost of living in the past 10 years.

Perhaps you could apply for a job as a statistician at Vinnies!

"At this point, I wish only to point out a contradiction in Saunders article, or rather, a lack of disclosure."

There was full disclosure at the end of the article:

"Professor Peter Saunders is Director of Social Policy Programmes at The Centre for Independent Studies"

It's a pity St Vinnies think they need to pontificate as well as do good work - although I think their suggestion to end government subsidy of private schools is absolutely spot on.

Thanks Rhian, I never claimed to be a statistician. I do know however, from the thousands of families we see in Emergency Relief and Financial Counselling that financially the pressure is on. I am not sure about you, but it is pretty clear to me that the increase in numbers of families and individuals relying on inadequate government incomes is a clear sign the present governments policies are not providing an adequate safety net. Further, 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. And what about those awful tax rates for those trying to make a start at work on lousy wages ?

Thanks Rene,

The issues of the adequacy of payments and the number of claimants are largely separate (indeed, an economist might argue that higher payments will attract more claimants – a positive correlation). There are indeed many more benefit recipients than there used to be, and benefits represent a record share of household income and government spending. But this is in part a consequence of this government’s extension of benefit entitlements into middle and upper income ranges, especially family support. It does not necessarily indicate widening poverty.

It is true that the items bought by benefit recipients are not the same as general spending patterns reflected in the Consumer Price Index, and therefore CPI-adjusted benefits may not reflect changes in recipients’ cost of living. Some countries compile separate pensioner price indexes for exactly that reason. However, a quick look at the CPI movements for the past 10 years does not suggest to me that benefit recipients have necessarily lost out through this process. Items whose prices have risen by more than average include alcohol and tobacco, private health and education, meals out and takeaway foods, and holidays. Those whose prices have risen by less that average include clothing, furniture an household equipment, and housing. This is not a comprehensive list, but suggests that the things whose prices have risen fastest tend to be non-essentials.

I agree with your point about high marginal tax rates discouraging benefits recipients from entering the labour force.

The point that I was trying to make, albeit badly, was that the author appeared to equate Vinnies with communism with their reports as evidence of this. Christian organisations, in endeavouring to address the root cause of poverty -rather than being satisfied with merely patching up the problems- are often accused of socialism. Moreover, any lobbying efforts are somehow equated as being contradictory of their charitable aims. I not agree with this view. If anything, trying to address inequity in our society reflects the charitable aims of Vinnies. I point out that the CIS's " work is governed by the following convictions:• the importance of an autonomous and free civil society––a society under limited government where people can prosper, fully develop their talents and live in peace and dignity;
• an economy based on competitive free markets." The CIS Board consists of 19 members, 18 of which are directors, CEO's of major corporations or Bankers. The CIS is a lobby group in the guise of a research organisation. Vinnies is a charity that tries to lobby. Its interesting that donations to CIS are tax deductable (for a lobby group), whilst Vinnies is, with other charities, facing loss of tax funds, for trying to lobby. The statement that Saunders made, does not actually advise the reader who CIS is or what its aims are. It is this point that I consider is an important one to bear in mind, when reading this article.

aniko - what has that got to do with St Vinnie's coming out with alot of old, tired codswhallop? It's a pretty weak old argument to say that because the CIS is for personal freedom and the right of people to succeed that their criticism must be taken with caution. I'm sure the CIS would love to see poor people succeed as well. The major differences between the two philosophies seems to be that one wants to narrow the gap between rich and poor by making the poor richer, and the other by making the successful poorer.

Mollydukes - what business is it of yours what companies pay their executives? Since when is it up to you and the other envious in our society to dictate wages paid to private enterprise leaders? If someones skill and abilities enable a company to increase their profit by many millions of dollars why shouldn't they enjoy suitable recompense? And even if they lose money for the company it's still none of your business. If you're so concerned about it go and buy some shares in the company so you can have a vote. Envy masquerading as compassion is still envy.