In 2020, temporary COVID-19 income support supplements lifted many low-income households out of poverty, however after income supports were removed, these gains were immediately lost.
In Queensland, at current Australian Government income support levels, poverty is entrenched. This is a factor of both policy design and socio-economic issues. Incomes are inadequate to meet basic living costs.
According to financial counsellors across Queensland, the most prominent cause of financial hardship is having an inadequate income, followed by unemployment or underemployment, and low financial literacy. Of the seven households modelled in this report, only two were able to meet a basic standard of living.
Housing is the largest expense for all households. Six of the seven low-income households face housing stress, as their expenditure on rent exceeds 30 per cent of gross household income. This finding reflects the high rental costs for even the cheapest dwellings and the severe shortage of affordable housing across Queensland. Consequently, homelessness is a significant risk for Queenslanders on low incomes.
Additionally, six of the seven low-income households have very little capacity for savings or paying for unplanned expenses. This leads people to use buy-now-pay-later schemes or payday loans to meet day to day expenses. It also makes them vulnerable to the impact of fines and penalties.
Vulnerability and hardship are gendered issues. Due to factors including the asymmetric nature of unpaid care work, childcare responsibilities and the economic vulnerability of older single unemployed women without adequate financial assets or superannuation, Queensland’s women are disproportionately impacted by financial hardship compared to men.
These hardships have an impact. Low-income has a significant effect on mental health. In turn, poor mental health and the associated stigma and shame are significant barriers to individuals seeking support.
We do not have to accept poverty. To ensure Queenslanders a future that offers equality, opportunity and wellbeing, QCOSS makes the following recommendations:
- Ensure a basic standard of living can be met by all Queensland households by raising the rate of income support payments
- Improve energy affordability and reduce energy vulnerability for low-income households
- Protect households experiencing vulnerability from high-cost and risky credit courses, including payday loans, consumer leases and buy-now pay later schemes
- Protect individuals experiencing vulnerability from accumulated fines and penalties that are unduly onerous and contribute to deepening financial hardship
- Ensure policies and programs address gender inequalities and promote equal opportunities for all.