Income Poverty, Deprivation and Exclusion: A Comparative Study of Australia and Britain

Abstract

Poverty research has a long history in both Australia and Britain, but its influence on policy remains hostage to political priorities and ideology. This can partly be explained by the acknowledged limitations of defining poverty as low-income and measuring it using an income poverty line. This paper examines two new data sets that allow the income poverty profile to be compared with, and enriched by, the incidence of deprivation and social exclusion, measured using data that directly reflect experience. Although a degree of care must be applied when interpreting these new measures across countries, a validated poverty measure is developed that reflects both low-income and the experience of deprivation and exclusion. When results for the two countries are compared, they reveal stark differences between the alternative indicators. Britain has the higher income poverty rate, yet the incidence of both deprivation and exclusion are higher in Australia, while validated poverty is higher in Britain. The distributional profiles of deprivation and exclusion are shown to be very different in the two countries. These differences are explained by the very low incomes of low-income households in Britain, relative to other British households and relative to their Australian counterparts. In overall terms, the results suggest that the three groups facing the greatest risk in both countries are lone parents, single non-aged people and large (couple) families. This suggests that policies designed to improve low incomes would be targeted very differently from those aimed at alleviating deprivation or combating exclusion.