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The GFC might be over but the poverty crisis remains

Elaine Henry

by Elaine Henry

26 Feb 05:30am

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Filed under: Gfc, Poverty, Society, Welfare

29 comments

According to the Australian Treasury the global financial crisis is now officially ‘over’, with business booming and the unemployment rate once again beginning to shrink.

What's written in his future?

From an economic perspective, we might breathe a tentative sigh of relief, bearing in mind the fact that these boom and bust cycles are a cyclical feature of the global economy.

However, a broader social crisis still remains in the form of the persistent and intergenerational disadvantage that is preventing a significant proportion of Australians from contributing to the three national challenges of ‘Productivity’, ‘Participation’ and ‘Population’ identified in this year’s Intergenerational Report.

Earlier this week, a group of around 20 individuals from a range of backgrounds (including neuroscientists, financial planners, school principals and educationalists) came together at a workshop convened by The Smith Family and one of our corporate partners, AXA Asia Pacific.

The goal of this roundtable was to generate insights to inform our ‘Money for Wellbeing’ applied research project, which looks at the emotional attitudes and behaviours disadvantaged children and adults bring to their financial management.

The value of this research is considerable, helping Australia to understand the particular skills and relationships that will contribute to breaking the cycle of disadvantage and ensuring these individuals and their families are better able to weather the impacts of economic storms such as the GFC.

One of the prevalent themes to emerge from the discussion was the critical importance of emotional wellbeing as a foundation for all other skills development - particularly financial literacy, which is dependent (for example) on the ability to identify personal goals and the self-discipline to achieve them. Resilience in being able to overcome the inevitable ‘bumps in the road’ along this journey was also felt to be an essential element.

The challenge around these emotional skills is that they do not lend themselves to being explicitly ‘taught’ within the classroom environment, but rather learned through the role-modelling of others, particularly parents in the home setting.

Many of us take these relationships for granted. In fact, we might not even be aware how our own emotional capacities today reflect those of significant others with whom we have connected in life. In disadvantaged communities which frequently have a high concentration of lone parent families, these opportunities are far fewer, which is why The Smith Family acts as the connector to enable these relationships to form.

The outcomes of this approach are clear. Last night in Sydney, The Smith Family celebrated the success of the students who last year graduated from either Year 12 or tertiary studies, one of a series of Award Ceremonies we have held in every capital city over the last few weeks.

As reflected in the experiences shared by our guest speaker, celebrated chef Matt Moran, the students in attendance have worked their way up from difficult starting points, including a lack of educational resources, community support network and positive role models to emulate.

Many are the first in their families to achieve this level of education and the only reason it’s now been made possible is the fact they have been equipped with the right life skills to rise above their disadvantaged circumstances.

One student participating in our Tertiary Awards in Adelaide last week (and who was aptly named ‘Lucky’) shared the story of her arrival in Australia in 2001 as a refugee with her parents and eight siblings. Lucky had spent many years in a refugee camp where she had received little opportunity to pursue an education, but her family was determined to rectify this on their arrival in Australia.

Lack of English language skills and a support network were the tip of the iceberg for a family that also lacked financial stability and within two years experienced the passing of the main breadwinner, Lucky’s father. With a little support from the ‘significant others’ we were able to connect her to, Lucky was able to complete a Health Science Degree and is this year tackling a law degree, specialising in Public Health.

In October last year, Lucky won the biannual Ruth Gibson Memorial award (an award that is focused on the educational development of young women). With the $4,000 funding she received, Lucky won a position to attend the World Conference on Health Promotion in Geneva to be held in July 2010.

The Smith Family has also enabled her sister Ramla, who is a Learning for Life tertiary student herself and a dedicated volunteer within the African refugee community in Port Adelaide Enfield, to accompany her on this special trip with the financial support of one of our corporate partners, Adelaide Airport.

Both Lucky and Ramla are passionate and motivated individuals with a great future ahead of them, and we wish them well as they embark on the next stage of their life.

It is all too easy to make assumptions about disadvantaged families in Australia, including that they lack the self-motivation to forge a better life for themselves. The aspiration and determination etched in the faces of the hundreds of students attending our Award Ceremonies around the country this month are proof that this is simply not the case.

They more than anyone reflect the power of relationships in helping them become, in the words of the poet William Ernest Henley, ‘masters of their own fate’ and ‘captains of their soul’.

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29 comments

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    • Eric says:

      05:38am | 26/02/10

      I thought The Punch had banned silly capitals? Oh, right, that was just for reader comments.

      I see that silly articles haven’t been banned either.

      Reply

    • John A Neve says:

      06:03am | 26/02/10

      Firstly I don’t believe the GFC is over. What we have seen is phase one, phase two wil be far worse. The reason I say worse is that governments seem to rely on two things to clear debt; sell public assets or print money.
      There comes a time when there are no more public assets to sell and printing money only lowers it’s value.

      Governments can only spend what comes in, unless they wish to increase debt. In this country and Elaine’s article is an indicator, there is more and more demands on the public purse. This along with tax cuts suggests more unhappy people or a bigger national debt.

      There are in my view only two ways to address this issue, public restraint of
      a better taxation system.

      Reply

    • Jack Thomas says:

      10:24am | 26/02/10

      I seem to recall homelessness was a Number 1 Priority of Kevin Rudd, his spin doctors even selectively leaked examples of his nightime undercover visits to soup kitchens etc. Throw that on the pile of broken Rudd promises I guess.

      John, the Chief of the Reserve Bank Glen Stevens advised just this week that the GFC is over, and that it only lasted for 6 - 8 weeks in Australia.

      About the same amount of time Kevin Rudd spent writing an 8,000 word waffle about the failure of capitalism.

      All sectors of the property market are booming in most states, largely due to the failure of State Labor governments and more recently Fed Labor’s Tanya Pilbersek to address the supply side.

      Residential housing in every state is a disaster, where the lower end and working/middle class guys will get smashed. Demand pours in from a rapidly growing population, living in cities where again State Labor has left infrastructure dwindle.

      Supply is years beihnd because the banks turned off the tap for developers to fund new projects, meaning supply will be years behind pushing prices further and further. Fueling the whole thing are incompetant State Labor Planning Ministers like Justin Madden, who refuse to address proper planning and supply. The latest refusal to extend the urban growth boundary in Victoria is a clear example of Labor’s negligence to our State planning. Councils, Property Developers and residents alike are all being pitted against each other, and shafted.

      Sadly, the pain you are referring to John is not the GFC, it is the long hard road for the average Aussie paying back the hundreds of billions of dollars of Kevin Rudd’s ill advised and reckless spending.

      Glenn Stevens of the RBA flagged another 3 or 4 rate rises over the next year or so. Great huh?

    • John A Neve says:

      10:50am | 26/02/10

      Jack Thomas,

      I am aware of Glen Stevens’ and others comments, and am more than happy to let time show who is correct. Sadly I don’t think we will have to wait too long.

    • formersnag says:

      02:20pm | 26/02/10

      You forgot one, John, the third way they deal with debt, is with more of it. This is a problem in both the private & public sectors.

      America is going deeper into double dip recession as we speak/write, along with almost every other economy in the world. China’s economy cannot continue booming without American consumers buying their wares and has a growing bubble in its real estate market.

      Last time the stock market crashed in 1987 our economy did not go into immediate recession but lagged behind the rest of the world for nearly two years, eventually going down in 1990. When property values dropped generally by 20% to 50%.

    • Jack Thomas says:

      02:28pm | 26/02/10

      John

      It is way too simple to suggest the only two economic levers available to government are printing more money and flogging assets. That naiivity leads to people believing lies like Keating’s re-writing of our economic history.

      Even an ex Union hack now Labor MP knows there are things like IR legislation that ties wages to productivity, which Work Choices did. Whoops, did I mention the war?

      Horrible things like infrastructure projects funded by private money.

      There are even temporary wheel spinners like Rudd’s handouts, or even Howard’s baby bonus.

      My issue is that State Labor Governments have rendered Victoria and NSW rust belts, imploding on a community level, no matter how good your economic management is. Print all the money you want, sell all the power companies, but when you let Labor MP’s like Justin Madden loose it’s time to leave.

      No offence, but if you are right and the head of the Reserve Bank is wrong on the economy, then God help us all.

    • John A Neve says:

      02:56pm | 26/02/10

      Jack & Fornersnag,

      I’m sure I have covered this many times on this site. In the case of covering debt with more debt, that is in fact what printing money does.

      Regarding privately funded infrastructure, that in turn means the people pay for it forever or it falls down, which ever comes first.

      I’ll stick by my earlier post, time will tell and if you believe Glen Stevens, you’ll believe in the tooth fairy.

    • formersnag says:

      04:11pm | 26/02/10

      John, i was agreeing with you, and adding further info, to back your prediction about our economy heading for recession. Unfortunately i think your spot on, we are heading into an abyss (as our debt & current account deficit worsen) that will not be pretty, and almost everybody is trying to pretend its not happening.

      I remember “the recession we had to have” very well, whats coming will indeed be worse.

    • Vic says:

      07:11am | 26/02/10

      I must admit I was dismayed to read that Tony Abbot comment on homelssness Mr Abott stated ” we just can’t stop people from being homeless if that’s their choice” People don’t choose to be homeless , its not something they set out in life to achieve. I am sure The Global crisis disrupted many many lives and once you get off track it just seems harder to get back onto the right path. His targeting of those on welfare and disability pensioners will make it just that much harder for them, and place a greater burden on charities. Why do we kick those that are down? It seems to me deep within some us is a need to persicute others and thats not a very christian or moral view. Nor do I like the idea that he wants me and you for that matter to work from school to the grave to pay for his abuse of these people. At 70 years old we will all be burnt out, but perhaps hes thinking he won’t have to pay any of us a pension if we die on the job. Many Australians do not want to go on a witch hunt targeting our most vunerable

      Reply

    • Andy says:

      07:26am | 26/02/10

      Tony Abbotts comments are true. After living in Sydney for several years I enountered several people who chose to be homeless. Some people came from homes where abuse was rife and prefered to live on the street to being in their family home. Also I knew of several young people who chose to live on the streets take drugs and survive on prostitution, stealing and hand outs from other people. These people do choose to live on the streets, these people are out there, and it’s not just one or two there are several. We need to take off our rose coloured glasses.

    • John A Neve says:

      08:00am | 26/02/10

      Andy,

      While much of what you say is correct. I would suggest those people who chose to live on the street only represent 0.1% of our population.

      As for the young, those that don’t die, live to regret their earlier decision..

    • Gloria Stitz says:

      08:19am | 26/02/10

      I totally agree with Andy. People like to live on the streets today.  They are in full charge of themselves, they have no responsibilities. [eg. washing or cleaning a house] no bills to pay.
      It is the easy way out for some.
      They could get help from Centrelink with rent assistance or a small loan to get set up, but they don’t want that.
      They have friends on the street and they have that camaraderie which suits their totally irresponsible choices. They mostly indulge in drugs or booze in a paper bag. Their choice!
      Anyone who is left on the streets by domestic violence or a ruthless landlord know they will get some help if they need it.
      Australia is not a selfish nation and help is available to those in need.

    • Old Bert says:

      09:54am | 26/02/10

      @Gloria Stitz,  help from Centrelink with rent assistance would only create a catch22 scenario. What landlord is going to give a bunch of people with bad habits a lease on a house, only to see his investment deteriorate, or worse, burn down. Street people aren’t so stupid as not to know this. A significant proportion of homelessness is driven by mental illness, not, as you put it, “choice”, and “totally irresponsible choices” is inflamatory language, critically unhelpful, and you could provide readers with a list of organizations who give help to homeless or street people, to make your comment constructive.

    • ~Gloria Stitz~ says:

      10:33am | 26/02/10

      Old Bert, why would I write a list of organizations who help homeless people.?
      Homeless people already know who these good people are who are helping them and they would definately not be reading this Blog!
      I do not and would not know where to get “A List” as you call it.

      My dear friend works for the Salvo’s in the office.
      Every morning as soon as she opens her office door, she has a few regular kids that come in for their “breakfast’. 
      These kids sleep under bridges etc. She has asked them many times why they don’t seek more protected safer shelter and they just laugh at her.
      They like things just the way they are so they can be anonymous.

    • Jack Thomas says:

      11:26am | 26/02/10

      Andy, Tony Abbott’s comments about homelessness being a lifestyle choice are at best insensitive. Most likely moronic and heartless.

      The overwhelming majority of homeless people are there because they have been sexually abused, physically abused, mentally ill, etc. Granted there will be some examples of kids choosing drugs over a really sh1tty homelife, but once on the street the environment is so harsh it is impossible to return to normality (a proper home).

      I am not saying I have the solution, but to acknowledge the reality is a good start. Burning the victims is not the solution either.

      The loss of one drugged up street prostitute is a loss to humanity, I don’t care what you say.

      It seems I prefer the Salvo’s brand of Christianity over Tony Abbott’s, but I doubt very much your comments Gloria. Anyone in the bottom end of the welfare system would know the reality, and not think this is all just kids on a sleepover.

    • Toby says:

      04:19pm | 26/02/10

      Andy and Gloria,
      What you have written is well and truly up there with the most idiotic thing I have ever read and I am only responding in the hope that others aren’t infected by your poisons garbage as you two are clearly beyond help.  People only “choose” to be homeless so far as a person “chooses” to end their own life!  The majority in both circumstances will be afflicted by something you clearly don’t recognise as being a personal challenge, be it mental illness, drug abuse or other significant disadvantages.  Contrary to you bullsh*t people do choose to be in these circumstances and simply because help is available does not mean that these poor people have the capacity to take it.  This can be for any number of reasons.  Think before you speak and if you know nothing about a topic then just stay f*&king; quite about it!

    • Bec says:

      07:59am | 26/02/10

      My mother’s life was saved by a late term abortion. I am thankful every day she was able to get it.

      Reply

    • acker says:

      08:05am | 26/02/10

      Are Labor much better than Liberals on this issue ??....“A email sent by councillor John Cumming sparked outrage, with claims that he has insulted welfare agencies and described public housing as a “burden on the community”...Cr Cumming, a member of the Labor Party, also says in the email to public housing tenants as socially dysfunctional people “with drug addictions and criminal records”.

      http://www.starnewsgroup.com.au/story/82496

      Reply

    • AdamC says:

      08:27am | 26/02/10

      This is clearly good work you are doing, Elaine, but I have to note it seems very much on an individual level. As an organisation (and a community generally) we seem to be able to get a smart, disadvantaged woman an education and a bright future. That is good news. But what about all the others who still languish?

      The fact is that we have failed (and not just in Australia, but everywhere) to seriously reduce the incidence of poverty and disadvantage in society. In fact, as our material prosperity has rocketed upwards in recent decades, the extent of severe disadvantage seems to have increased! It would be good to read an article premised around reducing this disadvantage systemically, rather than articles premised (it’s true) on fundraising through pulling the heartstrings.

      Reply

    • Harquebus says:

      11:12am | 26/02/10

      The GFC ain’t over, it’s only just started.
      If Australian Governments didn’t waste the $billions of our mineral wealth, we wouldn’t need entities like the Smith Family.

      Reply

    • Kim says:

      03:27pm | 26/02/10

      Wouldn’t matter how many billions we had, we’d still need the Smith Family and the Salvation Army.  As stated above, there are thousands of people on the street that are there because of abuse at home, drugs, mental illness etc.  Do you really think the government give a toss about them?  Entities like the Salvos and the Smith Family at least give these people a hot meal and clothes etc.

    • acker says:

      02:36pm | 27/02/10

      Geelong Football Club is going as strong as ever, on your bus with your empty diatribe.

    • AdamC says:

      03:15pm | 26/02/10

      @Eric, no I suppose I don’t have much evidence about the extent of disadvantage in society. It is, after all, a difficult thing to measure quantitatively, and I agree that relative metrics like the Henderson poverty line are useless for measuring the extent of genuine hardship. Maybe you are right, and things have become much better for the less well-off in recent times. There are definitely many organisations which have a stake in perpetuating the idea of widespread disadvantage.

      @John A Neve, most people’s living standards are higher than they were many years ago, credit cards notwithstanding. The problem is people’s expectations keep rising as their incomes do, so they manage to keep themselves miserable. The only way I could agree with your contention in any way is if you were a young homebuyer (they are probably worse off than their equivalents ten years ago). Everyone else, though, is clearly better off.

      Reply

    • John A Neve says:

      08:45pm | 26/02/10

      AdamC,

      We must agree to diagree, I fail to see how having little job security, having a large credit card debt, relying on a second job or your partner working just to exist. Allows you to claim a higher standard of liing!!

    • TB says:

      06:40pm | 26/02/10

      I’m sorry, but I simply could not get past the title and first paragraph of this article. The GFC is by no rational assessment of the facts ‘over.’ EU economies are still faltering - the infamous acronym ‘PIGS’ to describe ailing European nations has now become ‘PIIGS’ (Portugal, Ireland, Italy, Greece and Spain), and it may very well become ‘PPIIGS’ if predictions of an impending collapse in the Pound ring true (yes, the second ‘P’ is for Pom). Maybe Germany and Slovenia will be next on the list so we can have ‘PPIIGGSS?’ Who knows.

      On the other side of the pond the US is trying to spend its way out of its troublesm creating an almost unfathomable pile of debt in the process (while continuing to fight costly wars which are essentially unwinnable while banging the drums for yet ANOTHER war), and all the way over here in Australia we have a housing market which will almost certainly crash once deflationary pressures hit our shores and interest rates start creeping back up.

      Yep, I’m glad all that GFC business is over and done with.

      Reply

    • brett says:

      07:35am | 28/02/10

      GFC over rubbish! I’m an importer that supplies 600 retailers with my products. I can tell you first hand the market is dead. I have a customer going bankrupt every 10-20 days. Hardly any stores are paying on time, more like 90 days plus. The only way to get goods into stores is via consignment stocks. And the shops are always empty. GFC over what a load of BS.

      Reply

    • brett says:

      07:39am | 28/02/10

      May I add just one other thing. While trade is down like this, the collection of GST is also way lower. I can tell from my business we are collecting at least 40% less GST then two years ago. You can imagine times this by the thousands of businesses down on trade. No wonder the governments are struggling for cash.

      Reply

    • DT says:

      12:18pm | 28/02/10

      Brett your experience is common place and particularly outside the major population centres where retailers and trades are struggling. However, the GFC was far worse in the northern hemisphere and Australia is the only nation that remained free of recession, well that’s if 0.6% growth is of any significance because in my opinion, considering the major economic reforms that had taken place since 1985 to 2007 and the 2007 debt-free, funds invested, budget in surplus position we had thanks to the previous government (and APRA they established) etc., even without stimulus our technical recession would have been little different, and now we would not have a significant federal debt and interest to repay which would be a far better position to be in right now. Meanwhile the homeless and the poor continue to suffer and “working families” struggle harder than they were before Rudd Labor came to office.

    • computer support jobs says:

      05:24pm | 26/06/12

      I’d need to examine with you here. Which is not something I normally do! I get pleasure from studying a post that may make people think. Additionally, thanks for permitting me to comment!

      Reply
 
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