Updated budget standard estimates for Australian working families in September 2003

The views expressed in this publication do not represent any official position on the part of the Social Policy Research Centre, but are the views of the individual author(s). Executive Summary • This report presents updated estimates of the incomes required by Australian working families to meet their needs in 2003. The research is based on earlier SPRC research commissioned in 1995 by the Department of Family and Community Services. • A budget standard estimates what is needed, in terms of material goods and services, by a particular type of family in order to achieve a particular standard of living in a particular place at a particular time. This involves identifying the basket of goods and services required to meet these needs, pricing them, and adding up the resulting expenditures to derive the family budget. • The principal advantage of a budget standard is that the assumptions and judgments on which it is based are made explicit, and this transparency provides a valuable basis for informed debate on questions of the adequacy of living standards. • Two separate budget standards were developed in the previous research. The modest but adequate standard is one that affords full opportunity to participate in contemporary Australian society and the basic options it offers. The low cost standard is intended to represent a level of living that may require frugal and careful management of resources but would still allow social and economic participation consistent with community standards. • The primary motivation for developing a low cost budget was to guide the setting of income support payments. The modest but adequate standard describes a level of comfort in which prevailing consumption and participatory needs are met without the need for frugality. It is the standard of living that the majority of 'middle Australian' families aspire to. • In specifying the budgets, and differentiating between the low cost and modest but adequate standards, the total budget for each household was split into the following nine main budget areas: housing; energy; food; clothing and footwear; household goods and services; health; transport; leisure; and personal care. • While the arguments are not clear-cut, the SPRC low cost standard is too low for use in setting minimum wages and the modest but adequate standard is probably too high. In general, which precise point is chosen on the continuum that separates the two standards involves judgments to be made. • The …