Rich get (much) richer

A report recently released by The Australia Institute (TAI) confirms that the rich are getting richer and the poor much poorer, with the top seven income earners holding more wealth ($56 billion) than the 1.73 million households in the bottom 20 per cent ($54 billion). The fact that at least three of these people initially inherited their vast wealth just makes it all the more galling.

The report, Income & Wealth Inequality in Australia, authored by TAI’s David Richardson and Richard Denniss, states that while Australia is one of the world’s wealthiest nations, inequality is rising.

In particular it highlights that the fact that the top 20 per cent of people earn five times more income that the bottom 20 per cent – and have 71 times more wealth. The authors maintain that whilst our ‘tax and transfer’ system is capable of redistributing income in order to reduce inequality, the current Government’s initiatives to reduce welfare payments are likely to have the opposite effect. The authors conclude:

“Rather than use the welfare system to redistribute income, the Government is seeking to ensure that welfare payments grow at a significantly slower rate than wages. The result will inevitably be an even bigger gap between those with the most and those with the least.”

The richest seven Australians are (in descending order):

  • Gina Rinehart ($22 billion)
  • Frank Lowy ($6.87 billion)
  • James Packer ($6 billion)
  • Anthony Pratt/family ($5.95 billion)
  • Ivan Glasenberg ($5.61 billion)
  • Harry Triguboff ($4.95 billion) and
  • Win Mau Hui ($4.82 billion).

 

Read TAI’s full report here


Opinion: Does anybody really care?

Yesterday’s news about the widening gap between rich and poor was not really news at all. We know that this has been happening for a while, both on a global scale and here in Australia. As TAI has noted, governments (plural) over the past 10 years have allowed this to happen, by not using the levers at their disposal – their ability to tax and transfer wealth. In recent months the propensity to support those on higher incomes (did anyone mention the proposed Paid Parental Leave scheme?) and further tax those on lower incomes (as witnessed by the proposed $7 GP visit co-payment) has been evident. But for all the outrage at some of the suggested Budget 2014 measures, most Australians seem remarkably complacent that they are becoming relatively poorer while a handful of high earners are becoming richer and richer and richer. What is it about us that means we will do anything rather than protest against what appear to be punitive policy measures? Is it a legacy of our convict days when we tugged our forelocks and bowed to the master? Whatever the reason, it is sad that we do not seem to wish to mobilise and fight the policies which mean, according to TAI, that the average pay check among the top 20 CEOs is almost $10 million.

Does anyone person really need $10 million per year?

Can we truly believe that any one person actually deserves $10 million per annum?

I doubt it. The saying goes that a man can only wear one shirt and drive one car at a time. No one deserves $10 million a year when his or her fellow citizens are homeless or lacking proper nutrition. No one. And it’s high time we all stood up and said so.

What do you think? Is the growing gap between rich and poor to be expected? Or should we be actively campaigning against this growing inequity?

 

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