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2.09 Index of disadvantage

Why is it important?

The links between different forms of disadvantage such as poverty, unemployment, poor education, racism and consequent social dysfunction, stress, social exclusion, and poor health are well documented (Wilkinson et al. 2003; Marmot 2005; Paradies 2006; Saunders et al. 2007; Sassi 2009). A recent study in the NT found that socioeconomic disadvantage accounted for one-third to one-half of the gap in life expectancy between Indigenous and non-Indigenous Australians (Zhao et al. 2013a).

Socioeconomic indexes for areas bring together a composite measure of advantage and disadvantage at the regional level. They provide a broad basis for tracking progress in addressing Indigenous disadvantage across the spectrum of determinants of health.

The ABS has developed the Socio-Economic Indexes for Areas (SEIFA) (Adhikari 2006). These indexes summarise a range of socio-economic variables associated with advantage and disadvantage such as the proportion of families with high incomes, people with a tertiary education, and employees in skilled occupations. Scores for each geographic area are produced by weighting these variables. All areas are then ordered from lowest to highest score and areas are divided up into ten or five equal-sized groups, from most disadvantaged to most advantaged depending on their score. The limitation with these ABS indexes for this measure is that the rankings of regions are based on the whole population in the area and will not necessarily reflect the profile for Indigenous Australians. To address these shortcomings, Biddle (2009 & 2013) over the last few years has constructed a number of Indigenous indexes of socio-economic outcomes. The results from this work are also included here.

Findings

In 2011, Aboriginal and Torres Strait Islander peoples were over-represented in the three most disadvantaged deciles, ranked according to the ABS' SEIFA Index of Relative Socio-Economic Advantage/ Disadvantage. Thirty-seven per cent of Indigenous Australians lived in areas in the most disadvantaged decile (the bottom 10%), compared with 9% of the non-Indigenous population. Only 1.8% of Indigenous Australians lived in areas in the most advantaged decile (the top 10%).

Analysis at the jurisdictional level suggests that in all states and territories a greater proportion of the Indigenous Australian population lived in the most disadvantaged quintile (bottom 20%) compared with the non-Indigenous population. The NT had the highest proportion (74%) and the ACT the lowest proportion (2.6%) of Aboriginal and Torres Strait Islander peoples living in the most disadvantaged quintile areas. Tasmania had the lowest proportion (1%) and the ACT the highest proportion (35%) of Indigenous Australians living in the most advantaged quintile areas (top 20%).

These results need to be interpreted with caution. Indigenous Australians often represent a small proportion of the population in each area and therefore the socio-economic status of the area as a whole will not always reflect the socio-economic status of the Indigenous residents (the 'ecological fallacy'). One study found that Indigenous Australians consistently had a lower socio-economic status than the SEIFA score for the area (Kennedy et al. 2004).

Biddle (2009 & 2013) has constructed a number of Indigenous indexes of socio-economic outcomes based on the Indigenous data from the 2001, 2006 and 2011 Censuses. These studies have consistently found that for Indigenous Australians there is a clear gradient of disadvantage by remoteness. Capital city regions ranked relatively well while remote regions ranked relatively poorly. Income, employment and education correlated geographically while other areas of wellbeing showed more complex patterns.

Within each region there was substantial variation across the smaller, underlying Indigenous Areas. For example, while Sydney was the highest ranking Indigenous Area across all of Australia, the Indigenous population in areas such as Blacktown and Campbelltown had outcomes that were closer to those found in remote Australia. Similar variation was found in remote Indigenous areas, demonstrating that any geographic strategy for addressing Indigenous disadvantage must be targeted below the regional level (Biddle 2009).

The analysis based on the 2011 Census found that in every area, Indigenous Australians had higher levels of socio-economic disadvantage compared with the non-Indigenous population of the area. There was no single area in Australia where the Indigenous population had better or even relatively equal outcomes compared with the non-Indigenous population. The gap between the two populations was smallest in city and regional rural areas (37–38 percentage points) and highest in Indigenous towns (89 percentage points) and remote dispersed settlements (81 percentage points) (Biddle 2013). This study found that, over time, the ranking for most Indigenous areas remained similar, particularly for the top and bottom-ranked areas. City areas, large regional towns and remote towns remained relatively stable. There was a relative worsening of outcomes in small regional towns and rural areas and a relative improvement in Indigenous towns and remote dispersed settlements (Biddle 2013).

Any regional-level analysis of complex social and economic issues using Census data will be affected by the scope of the questions included in the Census, the 'ecological fallacy' and data quality issues. However, this type of analysis does provide useful insights into regional variations in outcomes and comparisons between Indigenous and non-Indigenous population groups.

Implications

COAG has set targets to reduce the gap in Indigenous disadvantage across health, education and economic participation. This summary measure supplements what is known and reported in other measures about the relative disadvantage that Aboriginal and Torres Strait Islander peoples experience across a wide spectrum of social and economic issues.

Figure 2.09-1 Population distribution by SEIFA advantage/disadvantage decile, by Indigenous status, 2011
Population distribution by SEIFA

Figure 2.09-1 shows the population distribution of Aboriginal and Torres Strait Islander peoples and non-Indigenous Australians by SEIFA advantage/disadvantage decile in 2011. In 2011, Aboriginal and Torres Strait Islander peoples were over-represented in the three most disadvantaged deciles, ranked according to the ABS' SEIFA Index of Relative Socio-Economic Advantage/Disadvantage.

Source: AIHW analysis of ABS 2011 Census of population and housing

Figure 2.09-2 Population distribution by SEIFA advantage/disadvantage quintiles, Indigenous population by state/territory and total population, 2011
Population distribution by SEIFA

Figure 2.09-2 shows the population distribution of Aboriginal and Torres Strait Islander peoples by SEIFA advantage/disadvantage quintiles in 2011. Data is presented separately for each jurisdiction (excluding Tasmania), and Australia as a whole. The NT had the highest proportion (74%) and the ACT the lowest proportion (2.6%) of Aboriginal and Torres Strait Islander peoples living in the most disadvantaged quintile areas.

Source: AIHW analysis of ABS 2011 Census of population and housing

Figure 2.09-3 Indigenous-specific index socio-economic percentile rank and standard deviation by location type, 2011
Indigenous-specific index socio-economic percentile rank

Figure 2.09-3 shows as a result of Biddle's analysis of Indigenous indexes of socio-ecoonomic outcomes that capital city regions ranked relatively well while remote regions ranked relatively poorly.

Source: Biddle (2013) Indigenous Relative Socio-economic Outcomes index

Figure 2.09-4 Indigenous and non-Indigenous pooled socio-economic percentile ranks and standard deviations, by location type, 2011
Indigenous and non-Indigenous pooled socio-economic percentile ranks

Figure 2.09-4 shows results of Biddle's analysis of Indigenous and non-Indigenous pooled socio-economic outcomes, showing that for Indigenous Australians there is a clear gradient of disadvantage by remoteness.

Source: Biddle (2013) Pooled Indigenous and Non-Indigenous Relative Socio-economic Outcomes index