1. Evatt report, 2 HILDA ‘The Household, Income and Labour Dynamics in Australia Survey’ report
Evatt ‘Currently the poorest 40% of Australian households have effectively no wealth at all: about half of them actually have negative net wealth because of their personal debts.
At the opposite pole, the wealthiest 10% of Australian households have more than half the nation’s total wealth.
The Top 1% of households alone has at least 15 per cent of the nation’s wealth.
This affluent elite – the Top 10% and especially the Top 1% – is getting cumulatively richer, not only relative to poor households but also, significantly, in relation to the next 50% of households.
Two fault lines are widening – between the bottom 40% and the rest, and between the Top 10% and the 50% in the middle.
Dealing with this situation is perhaps the biggest challenge facing our political leaders today.’ Evatt Report
PPE Progress in political economy http://ppesydney.net/wealth-inequality-australia-timely-new-report/
With TurnbullPM back, the struggle against wealth inequality is a common theme around many issues for the left to campaign on in unions and community groups.
Here is the link to the Evatt Report on wealth in Australia
“Growing wealth inequalities make it harder to maintain the myth of Australia as the land of the ‘fair go’.
They potentially fracture social cohesion and create power imbalances that further undermine nominally democratic institutions.
Research by social scientists has also shown that there are significant statistical and causal links between economic inequality (albeit usually measured in terms of income rather than wealth) and the intensity of an array of contemporary social problems.
Countries with the greatest inequality tend to have the highest incidence of social disorders such as ill-health (both mental and physical), obesity, violence and prison incarceration.
Other research shows that the macroeconomic consequences are just as troublesome. For example, a new study by US political economists reveals economic inequality to have been a principal factor in causing the global financial crisis. And even the normally reliably conservative International Monetary Fund has published research findings showing that nations with high inequality tend to have weaker national economic performance.
Whether public policies can turn the tide is a key political economic question, of course. Thomas Piketty’s controversial but justly famous work on wealth inequality emphasizes economic variables such as the overall rates of economic growth and the rate of return on capital as the key influences on the accumulation and concentration of wealth. Public policies are also a key part of the inequality story, however, as Piketty’s analysis points out. Particularly during the three decades after the second world war, reforming governments in many capitalist nations had progressive taxation and welfare state arrangements that were explicitly designed to ameliorate economic inequalities.
It is the replacement of that social democratic inclination by the politics of neoliberalism and austerity, together with a weakening of the labour movement, that subsequently turned the tide. Were ‘the spectre of a progressively redistributive government’ ever again to haunt the Australian scene, we might anticipate a renewed policy push for progressive redistribution.
And, stretching the imagination yet further, might we even anticipate the question of wealth distribution then having a central place on the public policy agenda?…
Soberly returning to the present, we cannot expect such issues to be addressed, let alone resolved, by a Turnbull government re-elected with the barest of majorities and facing a Senate where populist and right wing parties hold the balance of power.
In the longer term, however, an informed citizenry needs good political economic knowledge if progressive political possibilities are to be realised. And any potential governments with an interest in progressive reform need good information if they are to act in the public interest. Information about the distribution of wealth is an obvious case in point.
The new report by the Evatt Foundation should be seen in this context. The report points to the need for improvements in the information on the distribution of wealth among Australian households. Its main purposes, however, are to marshal the existing evidence, show its characteristics and limitations, and thereby contribute to the clearest possible picture of wealth inequality. Worth a look…”
Evatt’s new report, The Wealth of the Nation, shows that inequality continues to increase.
‘Wealth, as Mr Hobbes says, is power.’– Adam Smith, The Wealth of Nations, 1776 (1, 35).
‘If we are concerned about equality of opportunity tomorrow, we need to be concerned about inequality of outcome today.’
– Anthony B. Atkinson, Inequality, 2015 (11).
Sheil C and Stilwell F (2016) The wealth of the nation: current data on the distribution of wealth in Australia
Christopher Sheil is a Fellow in the School of Humanities and Languages at the University of NSW, adjunct Professor in Social Policy at Boston University (Sydney Academic Centre), and President of the Evatt Foundation.
Frank Stilwell is Emeritus Professor of Political Economy in the School of Economics and Political Science at the University of Sydney and Vice President of the Evatt Foundation.
“Australians often pride themselves on living in the land of the ‘fair go’. This signals a concern with having equality of opportunity and with sharing the benefits of working together for common goals. Yet the reality is often very different.
Economic inequalities between rich and poor Australians result in some people having a notably easy ride while others do it very tough. The deep-seated economic inequalities also have major social and political consequences. They fracture social cohesion and create power imbalances that can undermine the nominally democratic institutions.
From a public policy perspective, it is particularly important to take economic inequalities into account. Indeed, governments have to be concerned with fairness in all aspects of their policies. Education and health policies are obvious examples. But an emphasis on narrowing inequality needs to be present in all public policies – ranging from pensions and superannuation to disability services, housing provision, transport, regional policies and, of course, taxation. It is a two-way process.
The prevailing patterns of economic
inequality determine what we need and expect from public policies; while the policies themselves shape the extent of the inequality, for better or worse….
Of course, there are other recurrent stresses too – most obviously, climate change, financial instability and job insecurity. But these challenges are all inter-linked, and they all need to be addressed in relation to economic inequality. If the policy responses are not equitable they will not be sustainable.
The cherished idea of the ‘fair go’ would then be a dwindling feature of life in Australia. This Evatt report, although quite technical in parts, seeks to make a positive contribution to meeting this crucial social and political challenge….
In the meantime, as working assumptions, it is safe enough to say that the Top 10% own at least 50 per cent of Australia’s household wealth and the Top 1% own at least 15 per cent, while the bottom 40% effectively have no share in the distribution. Among the OECD countries, there is no reliable evidence that this distribution is more egalitarian than the average, and it could be more inegalitarian….
6.4 In closing, it is worth emphasising that, apart from — or because of — the unequal distribution of power and opportunity that unequal wealth implies, it is now widely recognised that economic inequality is a brake on economic growth. It has long been understood that some inequality provides incentives to work, train, study and take risks, which stimulates economic growth and can lead to higher productivity. It is now also increasingly well understood that growing inequality is harmful for economic growth, particularly over the long- term.13
As the OECD has concluded: ‘The challenge, therefore, is to find appropriate policy packages that are both growth-friendly and that reduce inequality’.14
This week we have in the news the ‘The Household, Income and Labour Dynamics in Australia Survey‘ (the HILDA report) and it does not paint a healthy picture. Despite our recent natural resources boom we are going backwards.
Some of the findings in the report are:
Households headed by a person aged 25 to 34 have fallen since 1960; from 60% to 47%. Also, the wealth in this group also have shrunk over the same period.
Roger Wilkins, the author of the report, said there had been “no real increase” in household wealth since 2006 and no real increase in incomes since 2009.
Wilkins says the number of owner-occupied houses fell by 3.5 percentage points between 2001 and 2015, and is tipped to decline further.
Close to 70 per cent of all Australian households received some form of welfare benefits between 2001 and 2014.
From 2012 household income has recovered slowly, climbing to $75,731 in 2014, still 0.7 per cent worse than in 2009, meaning typical Australian families are no better off than they were five years ago.
12 per cent of households surveyed were unable to lay their hands on $500 of savings in the event of an emergency.
“Parents using childcare are, in real terms, paying more than double the fees they were paying in 2002. This is despite 25 per cent of families relying on grandparents for childcare, who provide an average of 14 hours of care per week,” said Prof Wilkins.
Not a lot to get excited about, is there?
Earlier by Frank Stilwell
A National land tax http://chriswhiteonline.org/2011/11/a-national-land-tax/
d. Frank Stillwell on a financial transactions tax http://chriswhiteonline.org/2011/10/financial-transactions-tax-2/
e. Frank Stillwell on tax reform http://chriswhiteonline.org/2011/10/stilwell-on-tax-reform/