Tanya Plibersek wants the government to think harder about inequality in Australia, as she writes in her latest column for Mamamia.
Economic inequality. If you’ve travelled overseas, chances are you’ve come face to face with some extreme examples. Five star hotels and slums, cheek by jowl. Children begging outside expensive designer shops.
Of course, Australia is not immune to economic inequality either.
It’s true that grinding poverty still exists here at home. Too many people are homeless, too many Indigenous Australians are being left behind, and too many people are struggling to make ends meet.
Yet it’s also true that by many general measures, Australia does pretty well.
We’ve had more than 20 years of continuous economic growth. We came through the Global Financial Crisis better than nearly all similar countries. We have good health and education systems. We are a safe and peaceful nation.
In fact, when Labor was last in Government, Australia topped the Better Life Index three years straight, beating all other advanced nations. The Better Life Index looks at how countries perform in areas like jobs, incomes, health, and the environment.
So if things are okay overall, how it is that Australia still has pockets of shameful disadvantage, and why does it seem harder than ever for the average family to get ahead? And what should we be doing about it?
Let’s dig a little deeper.
While Australia has enjoyed an unprecedented stretch of relatively good economic times, the truth is the benefits have been spread unevenly. We know this because something called the ‘Gini coefficient’ (a useful number that measures economic inequality) has mostly been getting worse for decades.
Put simply, in Australia, the trend has seen the rich getting richer, and the poor poorer.
The three richest Australians have more wealth than the million poorest.
But it doesn’t have to be that way – and that’s where government comes in.
Things improve when governments prioritise policies that help fight inequality. In Government, Labor pursued those policies, from the National Disability Insurance Scheme, fairer education funding, better healthcare, to tax cuts for low income earners.
But Tony Abbott has unravelled much of Labor’s work.
Because of Tony Abbott’s last Budget the average family is $6000 worse off. Pensioners will be around $80 a week worse off within a decade, our kids will pay $100,000 for university degrees, and all Australians will pay more to see the doctor and to fill a car with petrol.
Under the Abbott Government the average family feels it’s harder to get ahead, because, sadly, it is.
Equality doesn’t happen by accident. The choices governments make, especially at Budget time, have the power to make Australia a more economically equal place – or not.
On the eve of this second Budget, there are a few things I think Tony Abbott should remember.
Reducing inequality is not just good for the poorest Australians, it benefits us all.
Countries which are more equal tend to be more economically successful. That’s been proven by the IMF, the World Bank, the Centre for American Progress, Nobel Prize winning economists like Joseph Stiglitz, and academics like Thomas Piketty.
Lower inequality is good for everyone, because when we invest in the basics like good health and education, and decent pay and conditions, the investment pays off with greater economic activity.
As a mum, all I want is for my sons, and my daughter, to grow up in an Australia with both a strong economy and a fair society – where they can get great education and healthcare, where they can get a job, and where they can afford to live a good life.
But I don’t just want that for my own kids, I want it for all kids. Australia’s strength and prosperity in the future will depend on all Australians having the chance to contribute to our nation.
Reducing inequality is good for us all, and we deserve a government that works to make that happen.
Top Comments
Hi Tania, There may be people out there who may know more than me on the subject, but.......
The inequality started when Bob Hawke endorsed wage indexation. Yes. He was all for it. But.........regular indexed wage rises were the worst thing to happen to Australia.
The Union leaders at the time, loved the idea because it would mean more money coming in.
Perhaps you do some research into the events in the 1970's when it was introduced.
From my experience, I was earning an average income, and looked forward to the regular rises until I could see how unfair they were. I saw a lot of unhappy people, who still had to pay the same rates for their gas, electricity, petrol, car registration, and the same interest rate for their home loans. Things were getting harder for the lower income folk. I also saw the results of Union strikes over wages.
The Unions were partly to blame for getting involved with their members wages. Those employees who worked on the Warves, in the car and building industries, were the one's who went out on strike the most. The workers didn't get paid while on strike, which made things even tougher at home until they could go back to work. The Unions didn't care because it meant that they were going to get more fees from their members higher wages. Then the effect of regular wage indexation took it's toll on the Textile, and other Australian industries, who went overseas where they could continue making their products much cheaper.
Indexation ran for 14 years or more, and the average wage increased, but there were more people each year who were NOT earning the average wage.
As soon as the negative effects were noticed, the government should have stopped it, but they didn't want to, because it suited them to change the tax scale to raise more taxes.
Privatizing essential services is not supporting the country either. Overseas investors may be ther, but Australian money is going overseas as a result.
Another thing that needs to be addressed is the 'American' idea of CEO's getting paid ridiculous salaries - even when the company doesn't perform well, is not a fair thing when the people actually doing the work, are being paid very little. CEO's used to be paid a reasonable salary, and were rewarded when the company performed well.
Hello Tanya, if governments are really serious about
creating equality for everyone then they would undo and stop the privatisation
of our assets. You don’t have to be a university academic to know that the
money that was generated by our utilities and other assets created revenue,
jobs and stability for our nation. Now that they have been privatised they make
money only for a minority of people who are already wealthy, caused job losses
and for that we have far too many people who don’t have the lights on in their
homes.
Claiming our assets are better run by private companies is
absolute rubbish, part of the problem is we have ministers who sit on the
boards of corporations, this is nothing more than a conflict of interest and a
lop sided system designed for the rich. It is never too late to take back our utilities,
create our own mining companies to compete with private enterprise and quite a
number of other things we can do to create revenue for the whole of the country
and not just for a minority of people who are already rich beyond our wildest
dreams.
This would be great, but hard to do... It would take too much money to buy the utilities back from businesses, the government would have a lot higher debt. The revenue would eventually pay it off, but that would take years... and if Labor did it, the Libs would claim that Labor can't run a government and spend beyond our means, etc, etc... Just like they did with the NBN... I really despise the Liberals!
The problem with this is that a government run entity cannot compete with private enterprise. If you don't have a profit motive there is no incentive to run a lean and efficient organization. You can see examples of this in every single public department of the government..
If you want to see a real life example of this then look at Venezuela's oil industry, it's been 100% nationalized and now has extraction costs that are more than twice as high as it's closest private competitor..
What usually comes of this is the government will then attempt to regulate it's private competitors out of the market. This was all good and well pre globalization, it's virtually impossible to do now that companies can trade with Australian customers from overseas.
Actually there is no evidence that the profit motive leads to corner cutting or lower quality, what usually happens is the business is simply delivering what the market perceives as "value". If a business is not providing quality, another business will simply come along and offer a quality product in it's place.