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Preventing poverty for people in middle income households

Emma Davidson 26 November 2019 12
Tuggeranong

Women working part-time in low paid industries and living in middle-income households are concentrated in Canberra’s outer suburbs – mostly in Tuggeranong (pictured), West Belconnen and Gungahlin. Photo: File.

Canberra has been described as a collection of suburbs in search of a city, and prides itself on a much greater proportion of its population being ‘middle class’ than most Australian capital cities.

Our city is imagined as being endless swathes of suburban homes, with families where both parents have a middle-income job (probably at least one parent in public service). But this is not actually true.

Research by the Women’s Centre for Health Matters shows that many women could end up living in poverty if something happened to the income of their partner, as it is their partner’s income that puts them in a middle-income category. In 2016, at least 34,174 women and girls in middle-income households (equivalised household income of $52,000 to $103,999 per year) in the ACT were reliant on parent or partner income for their middle-class status.

The scarcity of affordable housing, bulk billing GPs and specialists, public education that often comes with expensive extra-curricular costs, and a public transport network that isn’t always suitable for getting to and from work or education, means that middle-income households don’t have much wiggle room if there’s a sudden drop in their income. Death, disability, domestic violence, divorce, or decreased work income can happen to anyone.

For women, simply finding work is not a pathway out of poverty. The industries employing the highest percentages of ACT women are also the industries with the lowest average wage. Women working part-time in low paid industries and living in middle-income households are concentrated in Canberra’s outer suburbs – mostly in Tuggeranong, West Belconnen and Gungahlin, as well as a few suburbs in Woden and Weston Creek. These areas also have high concentrations of women in middle-income households with mortgage repayments. In the event of a relationship breakdown or the loss of the primary earner’s income, these women would find themselves living in a low-income household, making it much harder to pay rent or meet mortgage repayments.

Photo: Women's Centre for Health Matters.

Middle-income households who need to reduce their housing costs are unlikely to find anything affordable on a low income in the private rental market, as shown in the annual Anglicare Rental Affordability Snapshot.

While 24 per cent of women and girls in the ACT live in middle-income households with a mortgage, only 0.51 per cent live in middle-income households in public housing. A rise in unemployment rates or mortgage interest rates is likely to have a bigger impact on the waiting list for public housing (which in 2018 was 983 days for standard applicants for public housing) than a reduction in the number of middle-income households who are already in public housing. Many households who have been pushed into housing stress are forced to make compromises on other necessities such as food, education, health and transport.

For single women with children, there is less of a buffer between being middle income and low income, as the household is reliant on one parent’s income and capacity for domestic and caring work. Most single women with children in the ACT were in some paid employment, and a higher proportion than the Australian greater capital cities average for single women with children.

But again, paid work is not necessarily a pathway out of poverty for single women with children. The high cost of childcare in the ACT reduces the income available to pay for other living costs, such as housing which is also expensive in Canberra.

The Productivity Commission found that the median cost of full-time long daycare for one child in the ACT in 2017 was $545 per week, or $520 per week for family daycare. A single woman on $55,000 per year with one child under five in full-time long daycare will be out of pocket $209.35 per fortnight even after the Child Care Subsidy is applied. She will spend 9.9 per cent of her gross wages on out-of-pocket costs for childcare. Women with multiple young children, or children with additional health needs, may find it impossible to access appropriate and affordable childcare.

Getting children to care or school, and then getting to work, is a time cost that single women with children also need to consider when weighing up their capacity to take on paid work. There isn’t another parent who can share the workload of transporting children, and car parking is even more scarce and expensive after 9:00 am. Most of the single women with children in both middle income and low-income households in the ACT are in the outer suburbs, with Tuggeranong and West Belconnen experiencing the highest concentrations.

Photo: Women's Centre for Health Matters.

For these women to be able to accept paid employment or study to improve qualifications and get higher paid jobs, it is important to have a bus route from the outer suburbs to the city that allows time to get children ready for school first.

For example, there is an express bus route from Banks to the city that only takes 47 minutes, but leaves Banks at 7:16 am – far too early for young children to start walking to school or get on a school bus. Leaving home no earlier than 8:00 am to allow time to get school children ready means a 90-minute bus ride to work, and the risk of arriving after 9:30 am.

These hard choices have flow-on effects for future employment opportunities, creating a compound effect for women who are already struggling to improve their family’s socio-economic status.

Rick Morton has also written about what he describes as the cognitive tax of being poor, noting the impact of grinding poverty on mental health not only for single women, but also for their children. These are women making daily calculations on whether they can make the rent, afford to eat, or pay the electricity bill – but not all three.

Suburbs in areas where there is a higher concentration of women in low-income households, or at risk of falling into a low-income household, do not correlate with suburbs that have a generally low socio-economic demographic or a high level of income inequality within the suburb.

Women at risk of poverty are invisible but everywhere in the ACT, but the higher concentrations in our outer suburbs may reflect the difference in housing affordability, combined with reduced access to paid work that they can get to on time while still fulfilling their caring responsibilities.

It is important that these suburbs also have access to employment and education opportunities, and a public transport network that supports access to those opportunities.


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12 Responses to Preventing poverty for people in middle income households
HiddenDragon HiddenDragon 7:44 pm 28 Nov 19

“…and a public transport network that isn’t always suitable for getting to and from work or education….”

That’s putting it mildly, and the people who tend to be most reliant on the outer reaches of that network will often be those who have the least flexibility and control over their hours of work – if they’re late, they’ll lose pay, and if they’re late too often, they’ll be looking for another job.

July Williams July Williams 5:29 am 28 Nov 19

Canberra is so expensive.... There are no real markets nor any inexpensive restaurant options.... Look at any other Capital City and there are many inexpensive suburbs for living, shopping and entertainment... That's just not the case here.

    Julie Macklin Julie Macklin 11:21 am 28 Nov 19

    If someone considers eating out as a regular normal thing they are not poor, or they are bad money managers and living beyond their means. I grow much of my own food. It's was very helpful to assist me with paying off my mortgage. Eating out was never considered; it was beyond my means.

    Jeff Smith Jeff Smith 11:30 am 28 Nov 19

    Good point. Two seperate resturant owners I have recently chatted to, who both closed their Tuggeranong resturants and setup new restaurants closer to town. Both said the rents, taxes and charges in small suburban Tuggeranong had increased so much in comparison to the patrons you were able to attract and money you could earn in the business. They said the extra costs to be located in the city gets them more access to wealthier people, public transport, foot traffic etc. This is not a good sign for anyone trying to set up cheaper resturants in the poorer areas of the low serviced parts of Canberra. Award wage earning families should be able to eat out affordably on the odd occaison and treat themselves to a meal.

Blake Anthony Cross Blake Anthony Cross 4:01 pm 27 Nov 19

There is no middle class. Your rich or your poor. Most of us are poor. Middle class is dead.

bj_ACT bj_ACT 2:26 pm 27 Nov 19

Thanks Emma for such an excellent article and insight. Too many outer suburbs of Canberra have hidden economic issues due to: poor nearby job opportunities; the reduction in Bus services; worsening public education performances; and increasing ACT government charges and living costs. Both the ACT Government and Federal Government actively avoid addressing issues for Canberra strugglers in the outer rim.

A lack of competent data analysis below the Suburb level, masks the disadvantages some Canberrans face. Especially in some large Tuggeranong suburbs like Kambah and Wanniassa that have some rich pockets with quality houses and very high incomes. These pockets offset the disadvantaged households.

Tuggeranong suburbs have consistently appeared in social and housing stress analysis such as this one. https://the-riotact.com/canberra-southside-suburbs-top-mortgage-stress-list/185382

Trevor Watson Trevor Watson 1:43 pm 27 Nov 19

And worse is to come. Until politicians decide to look past the next election and start actual real spending on major infrastructure to crank up the economy we could see negative rates. That would have some very unpleasant long term side effects even the wealthy would not enjoy.

Sher Young Sher Young 12:34 pm 27 Nov 19

Let alone the BARR rate hikes.

    Justin Watson Justin Watson 12:38 pm 27 Nov 19

    You are playing a broken record. Everything is expensive all across Australia. Rates are just a part of the cost of living and Canberra rates are on average for Australia. We have a problem, in this country and its Federal governemt policies that are pushing up the cost of housing, healthcare, childcare, aged care, while keeping wage growth low. You can blame rates all you want, but lower rates means less services for the vulnerable as well.

    Luke Bennett Luke Bennett 1:00 pm 27 Nov 19

    Sher Young hate to spoil the party with facts, but anyways...

    Sher Young Sher Young 1:07 pm 27 Nov 19

    Justin Watson I’m on a superannuation pension, my rates tripled, pardon my broken record

    Jeff Smith Jeff Smith 11:47 am 28 Nov 19

    Luke Bennett You should probably look at the table in the raw report below this image you posted (TOTAL TAXATION REVENUE, By Level of Government and Jurisdiction) you will see that ACT taxation revenue has increased over the one year period. There are a few other issues with using this ABS report as the core evidence to your argument. ACT Treasury papers will give you a better idea of the growth in ACT Government taxes and charges. As for the ABS data, the ACT is not included in the ABS Local Government tax breakdown, comparing this data this way can be a bit apples and oranges.

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