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Are Australians living in poverty just as much as Filipinos? Is it not about how much money you have?

During my visit to Davao City last week, I had the opportunity for several great chats with my good friend Glen Biggs, from Global Impact. One of our evening discussions involved late night coffee at an excellent, relatively new, coffee establishment just down the road from the Global Impact Davao base. Glen raised the challenging concept that, maybe, Australians are just as poverty-afflicted as people from developing countries like the Filipinos.

Despite our economic prosperity and vast opportunities, by the time most Australians reach retirement age they usually have to take a cut in lifestyle, rely upon a Government pension, and turn to family for support and assistance. One report suggests that 74% of retirees in Australia receive an income of $400 or less per week, while the Australian Bureau of Statistics reports that there is a gap between what people expect their source of retirement income to be and the reality when the time comes. The data suggests that in fact:

Of people aged 45 years and over who had retired from the labour force, just over 1.3 million people (44%) reported a government pension or allowance as their main source of income just after retirement (54% of men and 37% of women) (graph 6.29). A further 13% (384,700 people) reported no income source but lived off savings, lump sum payments or other assets, and 366,700 people (12%) reported superannuation or annuity payments (20% of men and 6.3% of women).

(Australian Bureau of Statistics — Year Book Australia 2007)

As I quickly pointed out to Glen, even if our retirement incomes are ‘limited’ (by Australian standards) we’re still clearly streets ahead of the Philippines, as we’ve had a working lifetime of opportunity, and our taxes have contributed to infrastructure and services which now continue to benefit us during our retirement, with health care, pensions, rebates/concessions, and a whole range of other facilities. Perhaps most importantly, issues which become life or death matters in developing countries are generally relatively trivial for us because of the support that surrounds us.

However, Glen’s point is a very important one — will increased income lift people out of poverty? Here in Australia we have vastly increased income and opportunity and we still don’t know how to manage it. Will increasing income for people in extreme poverty help them overcome poverty?

I’m personally a big believer that income is one of the biggest factors — that commercial/capitalist activities have the potential to revolutionise a country — but Glen’s point is certainly food for thought: perhaps poverty is also about a state of mind.

So how do we overcome that state of mind (in developing AND developed countries)?