A rising tide that hasn’t lifted all boats

Peter Whiteford writes in Inside Story (29.5.19) about continually widening inequality in Australia, arguing that the evidence shows our society is becoming less ‘fair’ for those on the lower economic rungs.

‘Ever since the federal government’s controversial 2014 budget, inequality has been a central theme of Australian political debate. Concern has also intensified internationally, with agencies including the World Bank, the Asian Development Bank and the International Monetary Fund conducting research and making recommendations. In 2015 the OECD established a Centre for Opportunity and Equality to delve into the causes and consequences of inequalities and generate discussion about policy options.

‘But not everyone agrees we need to be worried. In March, at the annual dinner of the Sydney Institute, former prime minister John Howard argued that the Labor Party and the union movement were “perpetuating an election myth over inequality” to justify a “tax grab.” “Australia still has the strongest and wealthiest middle class in the world,” he went on. “One of the things that hasn’t fundamentally altered is that we are still a very middle-class ­society… We are still the biggest middle class (per capita) in the world and people aspire to the middle class.”

‘… It is not surprising that politicians and some commentators might want to put the most favourable framing on trends in income distribution. It is more surprising when newspapers – particularly those aimed at business figures who presumably want to be advised accurately of economic trends – gloss over the complexities of changing household circumstances. It is not the approach taken overseas by the Financial Times, for example.

‘Looking ahead, will we be blessed by another boom-led increase in household incomes as we move towards an older population with increased needs for funding pensions and health and aged care? Or might we be less lucky? What is certain is that we will need policies to generate economic growth and policies to ensure it is well spread.’

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