Australia has more billionaires than ever before, as well as more people living below the poverty line, writes Paul Davis.
A PREVIEW of the 2017 Australian Financial Review 'Rich List' last week revealed that Australia has 60 billionaires — more billionaires than ever before.
That's sixty Australian billionaires, while the nation has 2.9 million people (13.3 per cent of the population) living at or below the international poverty line, including 774,000 children. Australian workers are experiencing anaemic salary growth, work in less secure employment and Federal Government budget policy settings seek to lower taxes on business, while squeezing those in need and increasing costs and charges on the youth. The increasing wealth of a few may be evidence of Australia advancing — but is it fair?
Each year the Financial Review 'Rich List' documents Australians who either, through business skill and acumen, the luck of riding a wave of prosperity, political connections, or perhaps all of the above, have ended up accumulating an incredible amount of wealth when compared to the average Australian. By no means do I bemoan their success, even though by world standards Australian billionaires seem rather politically connected.
In Colombia 85% of the billionaires were politically connected, in India 66%, in Australia 65% and in Indonesia 64%. https://t.co/Q0kmWP2ee4 pic.twitter.com/E0XoK4fvu1— Dave Donovan (@davrosz) May 29, 2017
What I question is their success — or rather, the cost of this success.
For example, consider the Australian Council of Social Services (ACOSS) report from October 2016, which noted that 2.9 million Australians live below the international poverty line. That 2.9 million Australians includes 774,000 children. That's right, Australia – a land of enormous wealth (land, mineral, talent, and so on) has 13.3 percent of its overall population in poverty. Perhaps it is reasonable question to ask whether it is fair that wealth inequality is increasing in Australia, even while we live in relatively peaceful times in world history?
Consider also the wages growth data which shows wave growth at 1.9 percent is at its lowest ebb for a decade. In some Australian jurisdictions, salaries have been going backwards. Correlation is not causation, yet anaemic wage growth is taking place while the wealth of the top capital owners in Australia swells, as evidenced by the increase in billionaires. While the wealth of a few being built on the backs of the many is not unusual, income inequality has been getting worse since the 1970s.
AFR rich list ... equal 10th place is the whale of punting. pic.twitter.com/DKssd5hOrH— sportstradingau (@sportstradingau) May 26, 2017
Perhaps this rise in inequality is the result of a combination of anaemic wage growth with the change in the employment profile of Australians from full-time to part-time and casual. The unemployment rate may be very low, however that is not a measure of full-time employment, or the real employment/unemployment rate. This is because, to classify someone as employed, the statistical standard requires only one hour of paid employment in the reference period. Underemployment is growing in Australia, which when combined with reductions in penalty rates, globalisation and the continued move of services to lower wage cost jurisdictions – and the continued decline in union membership – the power dynamic has shifted between capital and labour considerably to the possible benefit of the 60 billionaires.
The Federal Budget released on 9 May 2017 does little to redress income inequality. The popular “bank tax” will be passed on by the banks to consumers and claimed as a tax deduction, which will further reduce the saving and spending power of bank customers. Billions in tax deductions are to be given to big businesses, while at the same time some dependent upon the State for assistance are to be subject to drug testing, and university students will be charged higher fees and expected to pay back their HECS debts sooner, and faster. The Federal Budget appears to reward the top end of town whilst squeezing those earning less.
Porter telling porkies again. Estimates reveals 650,000 people will have Energy Supplement cut while Turnbull gives tax cut to big business. pic.twitter.com/r8udpBr93A— Senator Murray Watt (@MurrayWatt) May 31, 2017
Can policy settings and laws be considered fair when they enable 60 people to become billionaires while millions are in poverty? Is the economy fair when it only delivers anaemic wage growth and insecure labour for the majority of its citizens? Is is fair to,squeeze those in need and increase the costs and charges on the youth, our future? Are these policies and laws a fair way to advance Australia?
You can follow Paul Davis on Twitter @davispg.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
Australia:— Paul (@davispg) May 25, 2017
2.9 million at or below international poverty line inc. 774,000 childrenhttps://t.co/5qBAaTpu40#ausecon #auspol https://t.co/KBac0uvMvr
Increasing top tax rate to 49.5% a penalty on success, Turnbull says. Listen to this fop: https://t.co/B614t48k5m pic.twitter.com/TfENMpiHEL— Dave Donovan (@davrosz) May 31, 2017
It adds up. Subscribe to IA today for just $5.