SYDNEY, Australia — Australia has experience unfaltering economic growth for the last 23 years. Despite a significant global recession, Australia stood as one of the only developed countries unaffected.
In Sydney, Australia, the workforce grew over 13 percent and the number of businesses grew by 10 percent, despite the recession. The city represents almost 10 percent of Australia’s economy and supports jobs for nearly half a million people. While this economic growth is positive, there is still poverty in Sydney.
As of 2012, 26,000 children in Sydney are below the poverty line. According to research done at the University of Canberra, almost 30 percent of children fall in the lowest socioeconomic quintile. This is by far the highest percentage when compared to other regions in Australia. Two regions in Sydney, Auburn and Canterbury, are the worst affected by poverty.
Australia’s ABC News credits the high rates of poverty in Sydney to changes in the federal budget in 2012. NewStart Allowance, which provides federal aid to single parents with a child under the age of eight and disabled people, dropped from $321 a week to $263 for single parents. The loss of $58 per week translates to over $3000 per year. For disabled populations, the loss was even greater, at $160 per week.
As a result, single parents with young children and disabled populations are shocked by greater financial insecurity and experience the harsh realities of living in poverty. The University of Sydney’s Academic Stand Against Poverty, or ASAP, noted that the 2014 to 2015 budget, “will hurt low income workers and force more Australians into poverty.”
Their research outlines cuts made in the budget, which disproportionately affect those dependent on federal welfare. In particular, funding to indigenous programs, education, universal healthcare, young unemployed and low-income families. The budget for this year includes a $500 million cut to specifically indigenous programs and will create programs focused on a region in which only 20 percent of the indigenous people reside.
Currently, 750,000 indigenous people live in Sydney, Australia. Reflecting the national numbers, Indigenous populations are more likely to be imprisoned, lack access to education and have limited infrastructure development. While prices in Indigenous regions rise to 50 to 60 cents more than non-indigenous regions, the Australian government is cutting funding to welfare and other programs that would alleviate the burden of poverty.
ASAP argues that the budget cuts of Australia’s government mostly affect low-income populations, and this exacerbates the gap between the elite and people in poverty. This limits Australia’s opportunity to complete the Millennium Development Goals, which could affect its international reputation.
Australia’s future does not indicate improvement. Rather, the economic growth it has experienced for the last 20 years may decline. The Wall Street Journal reported that rising house prices pose a risk to Australia’s financial security. While low interest rates and rising house prices could be beneficial to Australia’s economy in the short run, the long run could see significant problems to the economy, similar to the global financial recession in 2007.
A hit to Australia’s economy on a whole would also mean a negative affect on the economy of Sydney. This, in turn, could increase the already high number of people in poverty.
– Tara Wilson
Sources: Wall Street Journal, Sydney Morning Herald, niversity of Sydney The Royal Botanical Gardens