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The Australian National University

Three Nations, Not One: Indigenous and Other Australian Poverty

Working Paper 1 / 1999


Benjamin Disraeli originally coined the phrase 'Two Nations' in 1845 to characterise the chasm between rich and poor in Victorian England. While the differential in access to resources has been reduced this century by the development of the welfare state, there is ongoing concern about the level of inequality in Australia. This paper attempts to develop, and sustain, the metaphor that there are three Nations in Australia: the rich, the poor non-indigenous Australians and indigenous Australians. That is, indigenous Australians are different from other poor and rich Australians in the nature and extent of destitution experienced in much of their community.

The paper is written in six sections. First, a discussion of several case studies and personal accounts in order to illustrate the indigenous experience of poverty. Second, an introduction of several conceptual and empirical issues for measuring the multi-faceted nature of indigenous poverty. Third, a description of the data and method used to analyse indigenous poverty. Fourth, a presentation of data which illustrates the multi-dimensional nature of indigenous poverty. The penultimate section canvasses strategies for tackling indigenous poverty while the final section provides some concluding remarks.

Indigenous experiences of poverty – some case studies

Research into poverty frequently appears rather distant from the reality of poverty. Case studies, from the Royal Commission into Aboriginal Deaths in Custody and the 'Stolen Generations' Inquiry, illustrate the day-to-day grind of indigenous poverty in modern Australia and the need for a multi-dimensional approach to indigenous poverty.

Conceptual issues in measuring indigenous poverty

The conceptual problems for measuring indigenous poverty include: the role of non-market work, family size and composition, relative prices and the geographic distribution the population.

The command over resources is undeniably a major factor determining whether a person is poor. However, one cannot live on bread alone and people need access to adequate health care, housing and justice. The Scandinavian levels-of-living measures of poverty use several indicators that capture the standard of living. The disadvantage of the Scandinavian approach is that it over-emphasises the autonomy of these indicators of poverty. While it is important to recognise the differences in facets of poverty, it would be a mistake to ignore the behavioural inter-relationships between spheres of living. For example, chronic health problems may have long-term implications for income earning potential.

The depth of disadvantage in income, housing, health, arrests and land among indigenous Australians

One of the major findings of this paper is that indigenous poverty is not sensitive to changes in measurement methodology. That is, indigenous people are about 2 to 3 times more likely to be impoverished than the non-indigenous population irrespective of the equivalence scale used. While the same methodology must be applied across time if trends in poverty are being examined, the facts of indigenous poverty are so stark that the use of different methods will not materially change the findings at any point in time. Esoteric debates about the efficacy of using the Henderson poverty line do not alter the substantial and consistent differences between indigenous and non-indigenous populations. Notwithstanding the robustness of the results, future research into indigenous poverty must continue to ensure that differences in household sizes are properly accounted for.

The multi-faceted nature of indigenous poverty is illustrated by describing several welfare indicators, including housing, health and security. Indigenous households ranked by (equivalent) income and the average outcomes for the relevant indicators are measured for five equally sized groups of households. Of all facets of indigenous poverty, health stands out as a major concern. Long-term health problems are evident in one-third of indigenous households in both low and high income groups.

Since poor outcomes in non-monetary indicators are endemic among indigenous households it is inappropriate to focus solely on income poverty. For example, overcrowded housing is an issue for relatively advantaged indigenous families. Similarly, the high level of arrest and victimisation of indigenous people in both high and low income households means that income based measures do not tell the whole story of indigenous poverty.

Unsurprisingly high income groups are more likely to be employed, have better and more educational qualifications and are more likely to live in capital ci