Australian welfare recipients far below the poverty line

Jessicah Green

Australians relying on welfare payments such as JobSeeker, Youth Allowance and the Parenting Payment are being forced to survive far below the poverty line, facing worsening conditions of deprivation, stress and social exclusion.

This is the stark reality exposed in the “Poverty in Australia 2025” report released last month by the Australian Council of Social Service (ACOSS) and the University of New South Wales (UNSW). The report reveals not only a growing number of people in poverty, but an alarming increase in how far below the poverty line they are falling—a measure known as the poverty gap.

In 2023, Foodbank Victoria was distributing 71 percent more food than they did during the pandemic and 116 percent more than the monthly average during the Black Summer bushfires. [Photo: Facebook/Foodbank Australia]

The findings reflect a deepening social crisis for the working class in Australia, driven by stagnant welfare payments, skyrocketing rents and increasing inequality across health, education and essential services.

The report shows that 3.7 million people, or 14.2 percent of the population, were living in poverty in 2022–23. This includes 757,000 children, many from single-parent households, who are among the most at risk. The report uses the Melbourne Institute’s “poverty line” calculation, based on 50 percent of median household after-tax income: $584 per week for a single adult, or $1,226 a week for a couple with two children.

But the headline poverty rate tells only part of the story. The depth of poverty—how far people are below the poverty line—is worsening sharply. The average shortfall for people living in poverty was $390 per week after housing costs, a figure that has increased by $18 since 2019–20. For families with children living in poverty, this figure was $464. This is not just poverty; it is unyielding hardship.

The report makes clear that Australia’s social security system is not designed to abolish poverty but to maintain it. The federal Labor government’s token increases to JobSeeker and other welfare payments in September 2023, amounting to just $4 a day, have done nothing to alleviate this.

After these increases, according to ACOSS, a person on Youth Allowance still received $279 per week less than the poverty line, and on JobSeeker $205 less. Single parents with school-age children received the largest rise, $134 a week for a sole parent with two kids aged 8–12, but were still an average of $163 per week short of the poverty line.

Despite inflation and rapidly rising living costs, the government has refused to increase these payments to a level one can live on. Australia’s unemployment benefit is still among the lowest (as a percentage of average wages) in the OECD, and well below what is needed for people to afford rent, food, transport and other essentials. This impacts more than 1.4 million people who rely on these payments to survive. Many are forced to skip meals or avoid medical care to avoid falling further into debt.

ACOSS reports that housing costs are now the number one driver of poverty. Once rent is paid, many households are left with next to nothing. Private renters are especially vulnerable, with 57 percent of low-income renters experiencing housing stress, spending over 30 percent of income on rent, and 52 percent in severe housing stress, paying over 50 percent of their income to landlords.

Rents have skyrocketed since 2021, increasing by 40 percent in Sydney, 34 percent in Melbourne, and 41 percent in Brisbane. According to a recent report by Everybody’s Home, the average advertised rent across all capital cities in June was $858 for a house and $639 for an apartment.

Yet government rent assistance (a maximum of just $107.70 per week for singles with no children and $143.01 for families with three or more children) covers only a fraction of these costs. Labor’s widely publicised $1.9 billion (over five years) rental assistance package translates to a mere $11 per week increase.

The 2024 Anglicare Rental Affordability Snapshot confirms this crisis. Out of 45,115 rental listings, only 160 houses (0.4 percent of the market) were affordable for a couple with two children on JobSeeker. Suburbtrends data shows three-quarters of Australian suburbs are now in “extreme rental pain.” Working-class areas, especially in outer metropolitan and regional zones, are the worst affected.

For working-class families in areas like the western Sydney suburbs of Mt Druitt, Campbelltown or Blacktown, poverty is almost inescapable. A child’s postcode now has more impact on their future than ever before.

Australia’s public systems are amplifying poverty. Underfunding has left schools and hospitals in poorer areas struggling to meet basic needs. Low-income communities are facing overcrowded classrooms, teacher shortages, fewer support programs, long hospital wait times, and declining access to bulk-billed GPs.

As a result, children from poor families are falling behind at school, and adults are experiencing deteriorating health due to delayed or unaffordable treatment.

The ACOSS report’s authors warn that the situation has deteriorated even further since the 2022–23 data was collected. The cost of living has continued to rise, rents have increased further, public health and education systems are under greater strain, and the real value of welfare payments has fallen further behind.

This all amounts to a decline in living standards, the likes of which has not been seen for decades. Poverty is becoming deeper, more geographically entrenched, and harder to escape.

As more Australians struggle to pay rent, skip meals, or go without health care or medication, Australia’s largest supermarket chains—Coles and Woolworths—have posted combined 2024–25 profits of some $2.5 billion.

This deepening inequality is not accidental. It is the direct result of the pro-business agenda of the ruling class, carried out most aggressively by Labor governments at the state and federal level, which have prioritised budget austerity, tax cuts for the wealthy and military spending over the needs of ordinary people.

Amid a national affordability crisis, this includes the wholesale destruction of public housing, including the Victorian Labor government’s demolition operation to tear down Melbourne’s 44 public housing towers, displacing some 10,000 working-class and poor residents. A similar scheme is underway in Sydney, with the NSW Labor government in the process of turfing 3,000 residents out of the Waterloo South housing estate. In both cases, the transparent aim is to vacate lucrative inner-city blocks to hand over to private developers, who will make vast profits from selling newly constructed homes in the prime locations at exorbitant prices.

Workplace-related deaths in Canada show no signs of decline

Dylan Lubao

A spate of recent workplace-related deaths in Canada makes clear that conditions for workers in the country’s industrial slaughterhouse remain unchanged. With advanced plans for imperialist war unfolding and stepped-up demands for increased corporate profitability from the Liberal government of banker Prime Minister Mark Carney, the working class faces a return to the brutal conditions that prevailed in the sweatshops of the 19th and early 20th centuries.

Without exception, the deaths were avoidable. They speak to unsafe working conditions, inadequate safety regulations and a criminal justice system that protects employers whose practices lead to the injury or death of their workers. 

On October 2, a 26-year-old construction worker from Mexico was killed in the town of Forest, Ontario, when he fell from a scaffold while performing restoration work on an exterior building wall. The worker has not been identified, and it is unclear what, if any, protective measures were in place.

Kulbir Kaila, a 61-year-old cleaning worker at Simon Fraser University in Burnaby, British Columbia, died of a heart attack on July 28 during her shift. Like many of her colleagues, Kaila was an immigrant from the Indian state of Punjab. Her employer, Best Service Pros, laid off 23 cleaners in April 2024, dramatically increasing the workload of the remaining 150 staff.

In January of this year, an unidentified forestry worker died in Saint-Côme-Linière, Quebec, when the skidder he was operating collided with a tree stump and ejected him from the cab. His vehicle lacked a seatbelt and a full door, violating at least one safety regulation.

These three are just a few of the over 1,000 workers who die of work-related causes every year. The 2025 Report on Work Fatality and Injury Rates in Canada cites 1,056 work-related deaths in 2023, the latest year for which data is available. 

The report is authored by Sean Tucker, PhD, of the University of Regina, and Anya Keefe, MSc, of the University of British Columbia. Data was primarily collected from the country’s provincial and territorial workers’ compensation boards.

This number of over 1,000, equating to about three deaths every single day, does not remotely begin to illustrate the extent of injury and death occurring from workplace conditions. The report notes that a 2018 study titled Work-Related Deaths in Canada, headed by Steven Bittle of the University of Ottawa, estimates that the true number of workplace-related deaths is up to 10 times higher.

Myriad reasons exist for this phenomenon of underreporting, many of which will be familiar to workers everywhere. The pressures of precarious employment and fear of termination or loss of income, language barriers and a general lack of awareness, lead many workers to resist reporting injuries or illnesses sustained at work. Their premature deaths then get attributed to other, non work-related causes.

Carex Canada, an organization with expertise in carcinogens, estimates that 235,000 Canadian workers are currently exposed to asbestos, a known and deadly carcinogen present in many residential and industrial buildings and processes. The picture painted by corporate Canada is that asbestos has been phased out, even though legislation in 2018 only banned asbestos use in new construction.

Workplace-related deaths and injuries are thus far from rare and not something limited to developing countries.

Between 2020 and 2022, three workers were killed on the job at Hamilton, Ontario-based railcar manufacturer National Steel Car. The gruesome deaths, a result of well-documented workplace speedup and the corporation’s brutish refusal to implement or enforce rudimentary safety measures, led to slap-on-the-wrist fines for the corporation, owned by the indicted financial swindler Greg Aziz.

South of the border, Ronald Adams Sr., a 63-year-old maintenance worker at the Stellantis Dundee Engine Complex in southeast Michigan, was crushed to death on April 7, 2025, while servicing an industrial washer. Proper maintenance lockout procedures were flouted by the corporation in pursuit of speedier production, with the state’s office of occupational health and safety, as well as the United Auto Workers union, whitewashing the corporate murder.

Most recently, a massive explosion at the Accurate Energetic Systems munitions plant near Nashville, Tennessee, killed 16 workers, completely obliterating their bodies. The plant had committed numerous health and safety violations over the years and was allowed to continue producing ammunition for American imperialism’s war machine. The story was quickly buried in the corporate news cycle.

It is estimated that 5,283 workers died on the job in the United States in 2023, a vast undercount. The AFL-CIO union federation argues that there are instead around 140,000 work-related deaths in the United States every year, which includes deaths from work-related illness. This would put its per capita deaths on par with its northern neighbor.

What connects these tragedies across regional and national borders is the deepening crisis of the global capitalist system, which brooks no interference to the vast and increasing accumulation of wealth by the ruling class and preparations for war between the major imperialist powers and their rivals. 

According to the logic of capitalism, workers must remain on the job and slave tirelessly to generate corporate profits and build instruments of death. If a worker dies during the course of their duties, they merely become grist for the mill. So much the better, because they will not become a drain on corporate profits in their retirement.

No better example of this reality exists than the treatment of the world’s entire population by their respective governments during the ongoing COVID-19 pandemic, which is estimated to have needlessly killed 30 million people globally since 2020. Countless workers were thrust into workplaces that became breeding grounds for the disease, infecting them, their children, and the elderly.

In Canada, at least 60,000 people have died of COVID-19. Governments across the country and the political spectrum, from the “left-wing” New Democratic Party (NDP) to the Liberals, Conservatives and Coalition Avenir Quebec, promoted the eugenicist line that “the cure can’t be worse than the disease.” The disease was allowed to spread unchecked and the vital public health science of vaccinations and quarantine subjected to attack.

What limited reforms and protective measures remain are being rapidly stripped away, or are at best a complete farce. The Westray Law, federal Bill C-45, was legislated in 2004 to establish criminal liability for organizations in cases of workplace death and injury. It took its name from the Westray coal mine in Nova Scotia, where 26 miners lost their lives in a methane explosion in May 1992.

To date, only three individuals and seven corporations have been convicted under Bill C-45. The maximum fine levied was $1.4 million. In other words, the cost of doing business.

Work-related deaths and injury are only one component of the rapidly deteriorating social situation facing Canadian workers. 

Social inequality is soaring as the top 10 percent of the population monopolize the country’s wealth and income. The ability to strike, a fundamental right won through bitter struggle, is effectively a dead letter, as illustrated by the federal Liberal government’s outlawing of recent strikes of Air Canada flight attendants, Canada Post, railway and port workers. Long-held preparations for war against Russia and China are set to reduce tens or hundreds of thousands of workers to nothing more than cannon fodder.

In the face of the most severe social crisis since the Great Depression and the Second World War, the trade unions, in partnership with their allies in the NDP, have nothing to offer the working class but further poverty, hardship, and dangerous workplaces carrying the risk of injury and death.

For years, the leadership of the unions has collaborated with the NDP to maintain the big business Liberal party in power as they ran roughshod over workers’ rights and slashed social spending in favor of corporate subsidies and the military.

When workers have rebelled by voting for strike action in numbers unseen for decades, the union leadership has straitjacketed their struggles, keeping them isolated from one another and starving them out on poverty rations. This parasitic social layer does this to maintain their privileges and prop up the capitalist system which affords them a seat at the employers’ table.

Wall Street rises but underlying contradictions intensify

Nick Beams

Wall Street has resumed its rise this week, on the back of a possible end to the government shutdown, at least in the short term. The first week of the month saw a selloff of almost $1 trillion in tech stocks, which comprise around 40 percent of the market value of the S&P 500 index. The downturn, in which the tech-heavy NASDAQ index fell by 3 percent, was the most significant since the market turmoil set off by President Trump’s “reciprocal tariffs” announced at the beginning of April.

Wall Street sign [Photo by Sjoerd van Oosten / CC BY-NC-ND 2.0]

As Wall Street resumes its upward momentum, at least for now, three major issues are emerging that could bring significant turmoil to the US and global financial markets. These are: when the artificial intelligence (AI) bubble will burst and what will be the consequences; the increasing role of private credit in financing riskier debt, outside the regulations that apply to banks; and the possibility of a liquidity crunch in the short-term repurchase or repo market, which plays a key role in financing trades in the US Treasury market.

Amid the warnings that massive AI investments—OpenAI has entered deals worth $1.4 trillion in computing power over the next eight years with a revenue of just $20 billion this year—will lead to a collapse, there have been reassurances that the companies funding the deals have been doing so with their own cash and they retain a strong cash flow. But that situation is changing rapidly as the demand for investment funds escalates and there is an increasing turn to debt financing.

The Financial Times (FT) reported at the beginning of the month that US companies had issued $200 billion worth of bonds since the start of the year to finance AI-related projects. Analysts predict that “the splurge will ‘flood’ the broader market and store up new debt risks for credit investors.” The chief strategist at Bank of America, Michael Hartnett, has noted that $120 billion has been raised by what are termed the AI hyperscalers: Amazon, Google, Meta, Microsoft, and Oracle. In just seven weeks, more debt will be needed.

In a note to clients last Friday, he said the “cash flow [of these companies] is insufficient to fight the AI capex arms race,” pointing out that by next year, the expected capital spending of $534 billion would comprise 80 percent of this group’s expected cash flow. The risk of financial problems is inherent in the very nature of AI development within the framework of the capitalist economy and its market relations. Large investments in infrastructure, not least the provision of massive amounts of electricity, are needed up front. But the financial benefits of AI will only start to flow over the longer term.

In the interim, rapid developments in AI technology mean that the assets in which hundreds of billions of dollars have been invested could undergo a major depreciation because superior chips or systems have been developed. That process has already been seen back in January when the Chinese firm DeepSeek developed a new chip at a lower cost than US firms. Comments by analysts reported in the FT point to this development as debt comes to play an increasing role in the AI boom.

Gil Luria, head of technology research at the investment firm DA Davidson, said companies that had committed themselves to huge projects for one company were going to have to raise “expensive capital.” The bonds issued so far had not been too expensive, but “the companies are going to need hundreds of billions of dollars more. If the markets end up investing hundreds of billions of debt in rapidly depreciating assets that may not have sufficient returns, the risk could become systemic.”

What this means is that because the amounts are so large and the companies involved play such a large role in the stock market, their problems will send a shock wave through the financial system as a whole. According to Gita Gopinath, who recently stepped down from a top post at the International Monetary Fund, a collapse of the AI bubble on the scale of the ending of the dot-com boom at the beginning of the century would inflict losses of $20 trillion in the US and $15 trillion in the rest of the world. This would be equivalent to 70 percent of US GDP and 20 percent of the rest of the world’s.

Fraser Lundie, in charge of fixed income investment at Aviva Investments, said the surge in debt issuance raised “important questions about concentration risk [and] capex sustainability,” as well as market sensitivity to interest rates because of the long duration of the bonds being sold by tech groups.

The issue of the role of private credit within the financial system has been simmering for some time but has come into greater prominence with the collapse of the auto company First Brands and the bankruptcy of the sub-prime auto finance firm Tricolor, which had both been funded from this source. These events have attracted the attention of Bank of England Governor Andrew Bailey.

Testifying before the House of Lords financial services regulation committee last month, he said following their collapse, “alarm bells” were ringing over lending by private credit markets and recalled what had led up to the 2008 global financial crisis. “We are certainly beginning to see, for instance, what used to be called slicing and dicing and tranching of loan structures going on, and if you were involved before the financial crisis then alarm bells start going off at that point.” These activities served to cover the risk inherent in the underlying assets.

Bailey said it was still an “open question” as to whether these failures were “the canary in the coal mine” and whether they pointed to “something more fundamental” in private credit markets. Sarah Breeden, deputy governor for financial stability at the BoE, told the committee: “We can see the vulnerabilities here, the opacity, the leverage, the weak underwriting standards, the interconnections. We can see parallels with the global financial crisis. What we don’t know is how macro-significant those issues are.”

It was a telling comment. It made clear that the supposed financial watchdogs, guardians, and regulators of the capitalist financial system, with all the information technology at their disposal, have no real idea if a crisis is developing and will only know when it breaks over their heads.

One of the features of the 2008 crisis was the way in which the major credit rating agencies were giving top credit ratings to packages built on inherently risky assets, not only in the sub-prime mortgage market but in other parts of the financial system. In the present conditions, that role has been taken up by the rapid growth of rating agencies outside the big three—Moody’s, S&P Global, and Fitch—enabling debt sellers to shop around for a more favourable rating.

The head of the Swiss-based global bank UBS, Com Kelleher, drew attention to this practice at a finance conference in Hong Kong earlier this month. He said insurance companies, particularly in the US, were engaging in “ratings arbitrage” similar to that carried out by banks before the 2008 crisis. The issue has also been raised in a recent analysis by the Bank for International Settlements.

Another potential source of instability, even a crisis, is the repo market. It is at the center of what is known as the basis trade under which financial investors seek to make a profit from the tiny difference in the price of Treasury futures and their present price. The futures are sold, and Treasuries are bought to meet that trade. But the difference is tiny and in order to make a real profit, it must be repeated over and over with debt.

The Treasury bond that has been purchased can be used as collateral for an ultra-short-term loan from the repo market and used to buy another bond as more futures are sold. The result, as an analysis by the FT in April showed, can be that just $10 million may, through such leverage, support as much as $1 billion of Treasury purchases. The whole operation depends on the very low interest rate in the repo market where funds are borrowed. But if that rises because of a tightening of liquidity, the whole operation can unravel.

Such an occurrence took place in September 2019 and required a major intervention by the US Federal Reserve. At its meeting last month, the Fed recognized that strains were developing in the repo market and took action to increase liquidity by announcing that as of December, it would cease its quantitative tightening program, in which it wound down its holdings of US Treasuries. It may soon become a buyer again, injecting more money into the system. That action has eased the tensions that were building up. But any sudden or unexpected development within the US or in global markets could see them rapidly develop again, such is the knife edge on which the entire financial system is presently balanced.

Czech Republic: Election winner Babiš forms coalition with far-right parties

Markus Salzmann

One month after his election victory, billionaire Andrej Babiš and his party ANO have agreed to form a coalition with the Freedom and Democracy Party (SPD) and the Drivers’ Party (AUTO). Almost 35 years after the so-called “Velvet Revolution,” which Western politicians and the media claimed would bring peace, prosperity and democracy, the Czech Republic is now being governed by openly fascist forces who are pushing through militarisation and social cuts against the population.

ANO, which won 34.5 percent in the parliamentary election, holds a majority of eight seats together with the SPD (7.8 percent) and AUTO (6.8 percent). The previous right-conservative governing parties suffered in some cases heavy losses, and the nominally “left-wing” parties are no longer represented in the new parliament at all.

Babiš had already governed the country from 2017 to 2021 as prime minister in a minority government with the Social Democrats, which was propped up by the Communist Party of Bohemia and Moravia (KSČM). The KSČM is the successor to the Stalinist Communist Party of Czechoslovakia (KSČ), which played a key role in the capitalist restoration in 1989/90. Now, by supporting Babiš, it has paved the way for the far right.

Because of his right-wing, anti-social policies and several corruption allegations, Babiš lost the 2021 elections, with the right-conservative coalition Spolu narrowly defeating ANO. The outgoing prime minister Petr Fiala continued austerity with great severity and received the bill for it last month.

The new government is also centred on militarisation and social cuts. To enforce these, openly fascist forces are now being brought into government.

The SPD, led by Tomio Okamura, is a far-right party. Its election campaign was marked by vile agitation against migrants. The party denies the extermination of Roma during the Holocaust, wants to ban Islam and rejects the admission of any refugees into the Czech Republic. One earlier SPD election poster showed a black man with a blood-stained knife, after which criminal proceedings were initiated for incitement to hatred.

Behind its image as a “drivers’ party,” AUTO also hides a fascist programme. Its chairman Filip Turek is a collector of Nazi memorabilia and has repeatedly made racist comments on social media, including about former US President Barack Obama. Regarding a 2009 arson attack on a Roma family in which a small child was nearly killed, Turek pleaded for “mitigating circumstances” because the victims were Roma. Many of his posts refer to Hitler and Mussolini, as Czech media have reported.

At the founding congress of AUTO’s youth organisation, Motor Generation, in November 2024, participants reportedly displayed signs with slogans such as “I have an SS dagger at home” or “Certified racist.”

The new cabinet posts have not yet been fully settled. Reservations exist especially concerning Turek. Because of his openly displayed fascist attitudes, he may—contrary to earlier plans—be denied the position of foreign minister. Okamura, however, is expected to become the parliamentary speaker. After the president and the prime minister, this is the third-highest office in the state. Grotesquely, Okamura would in this position also be responsible for dialogue with minorities.

The draft coalition agreement already includes lowering corporation tax from 21 to 19 percent. The budget is to keep the deficit below 3 percent of GDP and to be balanced or in surplus in the medium term. To achieve this, massive cuts to pensions, healthcare and education will be necessary. In the coalition agreement, these are only vaguely referred to as cuts in state spending; they are not explicitly named. But all three parties are in full agreement on this question.

Keeping the retirement age at 65, instead of raising it further as planned by the previous government, is a mere statement of intent and can be thrown overboard at any time.

In military policy, the increases in armaments spending to 5 percent of GDP decided by the previous government will not be touched. In addition to this already gigantic agenda of militarisation, the new government wants to further expand the anti-drone programme and increase the number of soldiers.

The inclusion of far-right forces in the government has caused some concern in the EU over whether Prague will continue supporting the goals of the EU and NATO—especially whether it will maintain the war course against Russia.

Babiš and his coalition partners immediately dispelled these concerns. In foreign policy, the coalition agreement announces an even harsher “zero tolerance” line toward illegal migration—meaning that the EU’s brutal fortress-Europe policy will be further tightened in the Czech Republic by the far right. At the same time, migrants are being turned into scapegoats for the worsening social crisis.

In addition to maintaining EU membership, relations with Israel and with the United States under Donald Trump are also to be strengthened.

A referendum on the Czech Republic leaving the EU and NATO—demanded above all by the SPD—is off the table. Support for Ukraine against Russia will also not change under the new government. Immediately after his election victory, Babiš phoned Volodymyr Zelensky to underline this.

Babiš’s announcement that he would review the Czech munitions initiative, introduced by the previous government, turned out to be mainly election propaganda. The Czech Republic will continue to support Ukraine under the new government. Pavlina Janebová of the Prague think-tank Amo.cz commented: “Babiš sees himself as a businessman. He naturally wants to ensure that Czech companies can one day participate in the reconstruction of Ukraine.”

Former NATO general and current president Petr Pavel, who must appoint the new government and could theoretically refuse, expressed satisfaction. The coalition had “confirmed the pro-Western orientation of our country,” Pavel said.

This makes clear once again that the ruling class in Europe is prepared to bring openly fascist forces into power—as long as they support the EU’s aggressive war policy. This development is evident across Europe: in several countries far-right parties are already in government, in others they stand at the threshold of power.

This development is most advanced in the United States, where Trump is establishing an authoritarian presidential dictatorship. Just as there is no resistance from the Democrats and the trade unions there, in Europe too the bourgeois and “left” parties have nothing to counter this development.

The vast sums for armament and war—financed through massive social cuts—are incompatible with democracy. That is why far-right and fascist forces are being brought into governments: to suppress the opposition of the working class.