This week a report on global wealth from Oxfam is making headlines ahead of the World Economic Forum. The report states that the world’s 80 richest people now own the same amount of wealth as the poorest 3.5 billion. If you think that sort of inequality is not an issue here, consider that in Australia the richest 1% now own the same amount as the bottom 60%. Many thanks to the Conversation for allowing us to republish this piece on the senate report on inequality in Australia that was tabled in December 2014.
Bridging our growing divide: Inequality in Australia is an important report tabled without fanfare in the Senate by its Community Affairs References Committee. The report is clearly argued and well-buttressed by data and references. The points it makes about an issue central to the kind of society we are developing in Australia deserve wide community discussion.
The inquiry terms of reference called for a review of the extent of income inequality, the rate at which it is increasing and its impacts on access to health, housing, education and work.
The senators were also asked to inquire into specific impacts on disadvantaged groups. These included the likely impact of government policies – especially 2014-15 budget measures – on rates of inequality, the principles that should underpin social security payments and practical measures that government could implement to address inequality.
The six-month inquiry engaged 13 senators – five from the ALP, five from the Liberal Party, two Greens and one independent. The 273-page report, tabled in December 2014, drew on 64 written submissions and seven public hearings involving 59 witnesses from government and voluntary agencies around the nation.
The report makes it clear the non-government representatives reached consensus on the key findings. The government members, led by Zed Seselja, were uncomfortable with the conclusions. They tabled a dissenting report.
I was a co-author of a report by the Australia21/Australia Institute, Advance Australia Fair? What to do about growing inequality in Australia. This was released in mid-2014. I met the committee as a witness and spoke about the origins of the report in a roundtable of experts at Parliament House in January 2014.
Arising from that rich discussion we proposed ten ways to move to a fairer Australia. These included promoting a national conversation about inequality, its effects and ways of dealing with it.
What did the inquiry find?
The committee’s majority report states that income inequality has increased in Australia since the mid-1980s. It asserts that the budget measures will be likely to exacerbate income inequality and poverty. The report emphasises that the Newstart payment is too low – for a single adult recipient it is more than A$100 per week below the poverty line.
The report points to the important role of the minimum wage and the fact that lower incomes are associated with poorer health outcomes. In addition, low transfer payments or low incomes often compound the disadvantage felt by groups such as Aboriginal and Torres Strait Islander peoples, people with disability, people living with mental illness, single parents and new migrants.
It also argues the need to consider how the income-support system can assist the large and growing group of people with insecure work. The report notes that regional variations in labour markets can seriously limit people’s employment opportunities.
It goes on to underline the importance of Commonwealth rent assistance and of long waiting lists to enter public and social housing. According to the report, a decent wage is the best way to lift people out of household stress.
Finally, the report discusses the importance of a one-on-one approach for reconnecting people with education, training and employment opportunities. It argues the need to invest in programs that connect with young people at risk of leaving school early, that develop tailored training for workers aged 50 and above and that provide long-term unemployed people with mentors.
The report makes 13 recommendations to act on these key findings.
What is the government position?
The government senators’ dissenting report affirms that Australia is a prosperous egalitarian society, which provides security and opportunity for all. It argues that while Australia has some significant issues with poverty and much can be done to improve opportunity and circumstances for all Australians, the majority report adds little to the debate. It says history has shown that a strong economy that provides employment is the best way to build a prosperous society.
The dissenting senators say arbitrary comparisons between relative income levels pale in significance compared to Australia’s capacity to grow wealth and lift people out of poverty through employment and education. The majority report fails to make the case that inequality is driving poor socioeconomic outcomes, they say, and does not meaningfully engage with budget policies to improve these outcomes.
The five-page dissenting report has a single recommendation:
That the Senate implements the government agenda to build a strong and prosperous economy for the benefit of all Australians.
That this is the government members’ response to inequality in Australia shows why the public needs to join the debate.