This paper reports on the calculation of poverty rates for small areas in Australia using a spatial microsimulation model. The spatial microsimulation methodology used involves reweighting data from confidentialised unit record files (CURFs) from surveys conducted by the Australian Bureau of Statistics (ABS) to small area census data, also from the ABS. The method is described in this paper, and then maps of poverty using poverty rates derived from this small area estimation method are shown for the eastern coast of Australia and its capital cities. Further analysis of poverty rates in capital cities is then conducted. We find that areas of higher poverty risk can be clearly identified within Sydney, Melbourne, Canberra and Brisbane. We also find that areas of high poverty are frequently ‘buffered’ by areas of moderate poverty. This is not always the case since, in some areas, we find a high poverty area neighbouring a low poverty area but, generally, there appears to be a moderate poverty ‘buffer’ in most capital cities.