According to the ABS, the wealthiest 20% of Australian households, with an average net worth of A$2.2 million per household in 2011-12, accounted for 61% of total household net worth. The poorest 20% of households accounted for 1% of total household net worth, and had an average net worth of $31,000 per household.
This means that the wealthiest 20% of Australian households had net worth that was 68 times as high as the least wealthy 20%.
The most recent Credit Suisse Global Wealth Report finds that Australia has the second highest average level of wealth in the world and the highest median wealth.
In October 2012 ACOSS released a report showing poverty in Australia remains a persistent problem with an estimated 2,265,000 people or 12.8% of all people living below the internationally accepted poverty line used to measure financial hardship in wealthy countries.
The report provides the most comprehensive picture of poverty in the nation since 2006 and shows that people who are unemployed, children (especially in lone parent families), and people whose main source of income is social security payments, are the groups most at risk of poverty.
Over a third (37%) of people whose main income is social security is living below the poverty line, including 52% of people in households on Newstart Allowance. The low level of this payment means that when unemployment goes up as it is predicted to do, more people are thrown into poverty. The Newstart Allowance has not been increased in real terms since 1994 so households relying on it have been falling further behind community living standards and into poverty.
Two thirds of people on Newstart have been unemployed for more than a year and they clearly need more help than they are getting now from employment services. The Government only funds Job Services Australia providers an average of $500 to $1,100 a year to invest in training and work experience for this group.
The report also shows that there are almost 600,000 children living in families below the poverty line. About half of those children are in sole parent families, and one quarter of people in sole parent families are living below the poverty line.
The recommendations from the report were as follows:
“We urge the Commonwealth and state governments to take steps in their next Budgets to reduce poverty, by increasing income support for those in the deepest poverty, strengthening employment services for long-term unemployed people, and easing the high cost of housing for people on low incomes who rent privately.
High priority should be given in the next Federal Budget to raising the Newstart Allowance by $50 per week for single people and sole parents, and the cuts to income support for sole parents should be reversed or at least delayed.
Paid work is a key pathway out of poverty, and we need to see more investment in wage subsidies and training for people who are long term unemployed to make a difference to their job prospects. This should be implemented to stop recent increases in unemployment from becoming entrenched.
To tackle poverty we also need urgent action to ease housing cost pressures, particularly for low income people who are renting privately. People on social security and those in very low paid work receive Rent Assistance to help with housing costs, but at a maximum of $70 a week this is less than a third of typical rents for flats in capital cities and mining towns.”
I can only assume that the figures have worsened since this report was released as unemployment has increased and I am doubtful that you could find anywhere to live in Sydney for $210 a week.
The most important source of inequality in Australia is whether you have a job or not.
In the past, the pillars of egalitarianism in Australia were high wages, high home ownership and low unemployment. If we want to regain this position, we need to ensure that unemployment remains low and that low-income earners are able to buy into affordable housing. I see nothing in the budget that addresses this most pressing problem. In fact, quite the reverse. Expect an onslaught of investors as rich people negative gear their way to an income below $180,000.
Interestingly, Deborah James, the director of the International Programs at the Centre for Economic and Policy Research in Washington, said income inequality is:
“a drag on growth, because for a long time there was a consideration that increasing inequality would sort of lift all boats–you know, we raise the top and then the bottom will get raised as well. And what we’ve actually seen over the last many years, especially if you look at the last few years of the economic crisis, from 2010 to 2012, is that 95 per cent of the increase in incomes in the recovery has actually gone to the top 1 per cent.”
I guess Joe “lift the tide and all boats will rise” Hockey didn’t get the memo.
Financial speculation and the finance industry caused the global recession that we’ve been off-and-on living in for the last five or six years, and yet they haven’t had to pay for the damage that they’ve done. There is a growing call around the world for the introduction of a financial transaction tax to reduce the harmful financial behaviour and generate funds for much-needed public investment but the corruption in governments by the financial sector has made this virtually impossible.
This budget, like everything this government does, misses the mark on the true challenges facing our society – climate change, poverty, income inequity, affordable housing, equal opportunity for education, unemployment, child care, aged care, closing the gap for Indigenous people, mental health, hospital waiting times, tax avoidance, corporate greed.
But don’t you worry about that, you people. There are investment opportunities a plenty for that top 1% as we sell off our assets and give away our resources and open up even more loopholes to allow them to avoid paying tax. As was reported in the SMH:
“The latest tax statistics show 75 ultra-high-earning Australians paid no tax at all in 2011-12. Zero. Zip. Each earned more than $1 million from investments or wages. Between them they made $195 million, an average of $2.6 million each. The fortunate 75 paid no income tax, no Medicare levy and no Medicare surcharge, even though 60 of them had private health insurance. The reason? They managed to cut their combined taxable incomes to $82. That’s right, $1.10 each.”
This budget has sent a very clear message to the Australian people. Unless you have millions to invest (or hide), you will be considered a burden and treated as such.
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