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Survey of rural communities in Victoria reveals that as many as one child in four is living below the poverty line: validity of the Henderson Commission of Inquiry into Poverty results has come under fire

RICHARD PALFREYMAN: A survey of rural communities in Victoria shows that as many as one child in four is living below the poverty line. This indicates there's been little improvement in country living standards since the Henderson Commission of Inquiry into Poverty, conducted in the early 1970s. But, as Libby Price reports, the validity of the survey results have already come under fire.

LIBBY PRICE: According to research conducted by the Warrnambool Institute of Advanced Education, a survey of 78 rural communities shows that child poverty is now double the national rate of one in eight children. The basis for the rapid increase is rising unemployment, particularly amongst farmers, farm labourers, and those servicing the rural sector.

Bishop Peter Hollingworth of the leading welfare research body, the Brotherhood of St Laurence, says growing rural poverty is a direct result of a slump in the agricultural economy, largely due to high interest rates.

PETER HOLLINGWORTH: There is a considerable amount of rural poverty amongst Aboriginal people, amongst white people who are on low incomes, people who are on the margins in small farms, people living in country towns who can't work, young people who simply have no opportunities for employment and have to drift to the city where you simply haven't got an adequate income. It means that you're locked into a kind of subsistence lifestyle characteristic of what existed 40, 50, 60 years ago in the bush.

LIBBY PRICE: What in particular has caused this recent worsening in rural poverty?

PETER HOLLINGWORTH: The research evidence shows that if, in fact, the primary producers are not making a good income or if they have a bad year or a series of bad years, it clearly affects the jobs that would be available in the country towns, the service and support structures that would normally be available and to be paid for by those who would have the income to do so.

LIBBY PRICE: While the banks agree that rural areas have an unemployment problem, Executive Director of the Australian Bankers Association, Allen Cullen, says bank research contradicts the finding that rural poverty is on the increase.

ALLEN CULLEN: The report has suggested that there has been a significant increase in the proportion of people who had to leave their farms because they've been unable to generate the income to pay their debt. That finding is in conflict with the experience of the banks and suggests to me that the survey, particularly when it covers two periods, may not be covering the field or at least not covering a comparable group.

LIBBY PRICE: So, you're in effect questioning the survey results?

ALLEN CULLEN: Yes, the numbers in the survey are not all that high, and I think that it would be not ....

LIBBY PRICE: But one in four sounds pretty high.

ALLEN CULLEN: Well, I'm talking about numbers of people who are actually surveyed and to generate the general conclusions. I think the numbers surveyed is too small to place too much weight on their conclusions, and it would certainly matter the particular areas in which the survey was conducted.

LIBBY PRICE: So then, as far as the banks are concerned, despite record high interest rates, there's actually been an improvement in rural areas?

ALLEN CULLEN: Yes, that's the experience of the bankers, and that's because overseas markets for a number of years, since the times we've had in 1985 and '86 have improved materially and farmers incomes have gone up and they've been able to service their debt.

RICHARD PALFREYMAN: Rural debt and poverty. Allen Cullen from the Australian Bankers Association.