ACT Council of Social Service Inc.

Justice | Equity | Social Inclusion | Reconciliation

Inequality is not decreasing and we need to sharpen our focus to turn this around

7 September 2018

Over the past month several publications have put the spotlight on inequality and have fueled public debate about whether Australia is becoming a more or less equal society. Many of the debates we have been engaged with locally have been reflected in the content of and commentary on these reports. Outlined below are quotes from the reports about inequality that affirm the advocacy agenda we have adopted following our local analysis of disadvantage and costs of living. Insights in the reports below will be guiding ACTCOSS future priorities for advocacy on eliminating poverty and inequality.

 

The Transforming Australia: SDG Progress Report by the National Sustainable Development Council, August 2018

Findings on inequality: Almost every goal has at least one target where an important indicator is off track or will require a breakthrough to be achieved. These include the adequacy of Newstart welfare payments (SDG 1), obesity levels (SDG 2), domestic violence (SDG 5), energy and water affordability (SDGs 6 and 7), household debt, stagnant wages growth and underemployment (SDG 8), investment in research and development (SDG9), income inequality and distribution of wealth (SDG 10), housing affordability and homelessness (SDG 11), hazardous waste generation (SDG 12), greenhouse gas emissions (SDG 13), Great Barrier Reef hard coral cover (SDG 14), threatened species (SDG 15), sexual assault and prison population (SDG 16) and official development assistance (SDG 17).

Recommendations for action: We have a lot of work to do to promote prosperity and fight inequalities while protecting the planet.

 

Rising inequality? A stocktake of the evidence by the Productivity Commission, August 2018

Findings on inequality: About nine per cent of Australians (2.2 million people) experienced relative income poverty (income below 50 per cent of the median) in 2015‑16, with children and older people having the highest rates of relative income poverty. This rate has fluctuated over past two decades but not declined. Children, lone parents, those with a disability, the unemployed and Indigenous Australians are most at risk of multiple deprivation.

Many people who exit poverty re‑enter at a later date. Of those who were in income poverty in 2001, 30 per cent had returned to (or were still in) income poverty in 2016.  People in poverty often experience more fluctuations in their incomes than others. Between 2006 and 2016, people below the poverty line experienced more than twice as much income volatility, year on year, as people above the poverty line…The prevalence of marginal social exclusion was relatively steady between 2006 and 2015, but deep social exclusion showed a small and sustained rise after 2012.

Recommendations for action: Growth and complementary improvements in skills and education policies will not be enough [to reduce inequality]. In some previous research, we found that needs in housing or health policies could better be fashioned to address more directly than today quite specific needs — what might be termed ‘hand‑made’ policy — as we look out towards a fourth decade of uninterrupted economic growth.”

 

Inequality in Australia report, by ACOSS/UNSW Sydney, July 2018

Findings: Someone in the highest 20% of the income scale lives in a household with five times as much income as someone in the lowest 20% of the income scale. Even more extreme, someone in the highest 1% of the income scale lives in a household with an average weekly income that is 26 times the income of someone in the lowest 5% of the income scale.

To put it another way – someone in the highest 1% earns more in a fortnight than someone in the lowest 5% earns in an entire year.

Wealth inequality is more extreme: People in the highest 20% of the wealth scale hold nearly 2/3 of all wealth, while those in the lowest 50% hold only 18% of all wealth. The average wealth of a household in the wealthiest 20% is five times that of the middle 20% and almost a hundred times that of the lowest 20%.

When people with low incomes and wealth are left behind, they struggle to reach a socially acceptable living standard and to participate in society. This causes divisions in our society.

Too much inequality is also bad for the economy. When resources and power are concentrated in fewer hands, or people are too impoverished to participate effectively in the paid workforce, or acquire the skills to do so, economic growth is diminished.

Recommendations for action: tax, transfer, labour market and education policies can and must play a more effective role in reducing divisions in our community.