Showing posts with label poverty and disadvantage. Show all posts
Showing posts with label poverty and disadvantage. Show all posts

Tuesday, 17 April 2018

More reports showing that 'trickle up' economics is at work in Australia


Here is just a little of what Liberal & National party members - and their governments - refuse to understand as they support a far-right economic platform which is built on a reduction in corporate tax rates, high business profits and large management salaries in conjunction with employee wage supression, erosion of workers' rights, an increase in employment insecurity based on casual, part-time and/or employees as sham contractors and, further restrictions on eligibility for a number of basic welfare payments.

The Sydney Morning Herald, 10 April 2018:

Last year, as the government prepared another round of welfare crackdowns, Minister Michaelia Cash said she expects “that those who can work should work and our welfare system should be there as a genuine safety net, not as something that people can choose to fund their lifestyle.”

The subtext was clear – those who need help are a drain on the rest of us.
This rhetoric is familiar, but it is wrong. It is the wealthiest Australians who enjoy the most support.

Research commissioned by Anglicare Australia shows that each year, a staggering $68 billion is spent keeping the wealthiest households wealthy. That is greater than the cost of Newstart, disability support, the age pension, or any other single welfare group.

The Cost of Privilege report, prepared by Per Capita, models four household types to show how these concessions and tax breaks work. One of the couples we modelled, Tim and Michelle, own their own home. They have two children in private schools, top health insurance, and two investment properties. Michelle doesn’t work, and Tim runs a small business. Each year, Tim and Michelle get $99,708 in concessions from the taxpayer, or $1917 per week. That is well over twice as much as a couple with two children on Newstart, and nearly three times as much as a family with one parent on the Disability Support Pension. Tim and Michelle do this by getting concessions on their superannuation, negatively gearing their investment properties to minimise their taxable income, and getting tax breaks for private schools and private health insurance. They also get generous Capital Gains Tax exemptions.

Each year, thousands of Australia's wealthiest households profit from these loopholes and subsidies. Our report finds that tax exemptions on private healthcare and education for the wealthiest 20 per cent cost more than $3 billion a year. 

Superannuation concessions to them cost over $20 billion a year, and their Capital Gains Tax exemptions cost an astonishing $40 billion a year. Compare that to the annual cost of Newstart, which comes in at just under $11 billion a year.

Importantly, nothing that Tim and Michelle are doing is wrong or illegal. This is not a broken system. It is a system working exactly the way it was designed to work, supporting the wealthiest at the expense of the rest of us.

These numbers tell us that something has gone badly wrong. The eighties were the decade of trickle-down economics, where taxes were cut for the richest with the promise that everyone else would soon feel the benefits. But now it’s worse – we’re in an era of trickle-up economics where subsidies, tax breaks and concessions for the richest are paid for by everyone else.....

Anglicare Australia, 26 March 2018:

Cost of Privilege - households (.pdf)

ABC News, 15 April 2018:

One in every five Australian children has gone hungry in the past 12 months according to a new report, with some even resorting to chewing paper to try to feel full.

The survey of 1,000 parents commissioned by Foodbank shows 22 per cent of Australian children under the age of 15 live in a household that has ran out of food at some stage over the past year.

One in five kids affected go to school without eating breakfast at least once a week, while one in 10 go a whole day at least once a week without eating anything at all.
"I think that's a very sad indictment on us as a society," said Foodbank Victoria chief executive Dave McNamara…..

"Some kids were eating paper. Their parents had told them 'There's not enough food, if you get hungry you'll need to chew paper.'"

"This isn't made up. This is a story we heard setting up one of our school breakfast programs down in Lakes Entrance, which is a beautiful part of the country."

"No-one's spared. It's not people on the street; it's people in your street. It's in every community across Australia."

Foodbank Victoria graphic below based on its Rumbling Tummies Report, April 2018:


Friday, 9 March 2018

Two perspectives on global economic and social inequality


So you thought trade agreements were really about win-win free trade?

John F. Kennedy School of Government Harvard University, Dani Rodrik, excerpts from What Do Trade Agreements Really Do?, February 2018:

As trade agreements have evolved and gone beyond import tariffs and quotas into regulatory rules and harmonization, they have become more difficult to fit into received economic theory. Nevertheless, most economists continue to regard trade agreements such as the Trans Pacific Partnership (TPP) favorably. The default view seems to be that these arrangements get us closer to free trade by reducing transaction costs associated with regulatory differences or explicit protectionism. An alternative perspective is that trade agreements are the result of rent-seeking, self-interested behavior on the part of politically well-connected firms – international banks, pharmaceutical companies, multinational firms. They may result in freer, mutually beneficial trade, through exchange of market access. But they are as likely to produce purely redistributive outcomes under the guise of “freer trade…..

The consensus in favor of the general statement supporting free trade is not a surprise. Economists disagree about a lot of things, but the superiority of free trade over protection is not controversial. The principle of comparative advantage and the case for the gains from trade are crown jewels of the economics profession. So the nearly unanimous support for free trade in principle is understandable. But the almost identical level of enthusiasm expressed for the North American Free trade Agreement—that is, for a text that runs into nearly 2,000 pages, negotiated by three governments under pressures from lobbies and special interests, and shaped by a mix of political, economic, and foreign policy objectives—is more curious. The economists must have been aware that trade agreements, like free trade itself, create winners and losers. But how did they weight the gains and losses to reach a judgement that US citizens would be better off “on average”? Did it not matter who gained and lost, whether they were rich or poor to begin with, or whether the gains and losses would be diffuse or concentrated? What if the likely redistribution was large compared to the efficiency gains? What did they assume about the likely compensation for the losers, or did it not matter at all? And would their evaluation be any different if they knew that recent research suggests NAFTA produced minute net efficiency gains for the US economy while severely depressing wages of those groups and communities most directly affected by Mexican competition?

Perhaps the experts viewed distributional questions as secondary in view of the overall gains from trade. After all, opening up to trade is analogous to technological progress. In both cases, the economic pie expands while some groups are left behind. We did not ban automobiles or light bulbs because coachmen and candle makers would lose their jobs. So why restrict trade? As the experts in this survey contemplated whether US citizens would be better off “on average” as a result of NAFTA, it seems plausible that they viewed questions about the practical details or the distributional questions of NAFTA as secondary in view of the overall gains from trade.

This tendency to view trade agreements as an example of efficiency-enhancing policies that may nevertheless leave some people behind would be more justifiable if recent trade agreements were simply about eliminating restrictions on trade such as import tariffs and quotas. In fact, the label “free trade agreements” does not do a very good job of describing what recent proposed agreements like the Trans-Pacific Partnership (TPP), the Trans-Atlantic Trade and Investment Partnership (TTIP), and numerous other regional and bilateral trade agreements actually do. Contemporary trade agreements go much beyond traditional trade restrictions at the border. They cover regulatory standards, health and safety rules, investment, banking and finance, intellectual property, labor, the environment, and many other subjects besides. They reach well beyond national borders and seek deep integration among nations rather than shallow integration, to use Robert Lawrence’s (1996) helpful distinction. 

According to one tabulation, 76 percent of existing preferential trade agreements covered at least some aspect of investment (such as free capital mobility) by 2011; 61 percent covered intellectual property rights protection; and 46 percent covered environmental regulations (Limão 2016)…..

Consider first patents and copyrights (so-called “trade-related intellectual property rights” or TRIPs). TRIPs entered the lexicon of trade during the Uruguay Round of multilateral trade negotiations, which were completed in 1994. The US has pushed for progressively tighter rules (called TRIPs-plus) in subsequent regional and bilateral trade agreements. Typically TRIPs pit advanced countries against developing countries, with the former demanding stronger and lengthier monopoly restrictions for their firms in the latter’s markets. Freer trade is supposed to be win-win, with both parties benefiting. But in TRIPs, the advanced countries’ gains are largely the developing countries’ losses. Consumers in the developing nations pay higher prices for pharmaceuticals and other research-intensive products and the advanced countries’ firms reap higher monopoly rents. One needs to assume an implausibly high elasticity of global innovation to developing countries’ patents to compensate for what is in effect a pure transfer of rents from poor to rich countries. That is why many ardent proponents of free trade were opposed to the incorporation of TRIPs in the Uruguay Round (e.g., Bhagwati et al. 2014). Nonetheless, TRIPs rules have not been dropped, and in fact expand with each new FTA. Thanks to subsequent trade agreements, intellectual property protection has become broader and stronger, and much of the flexibility afforded to individual countries under the original WTO agreement has been eliminated (Sell 2011).

Second, consider restrictions on nations’ ability to manage cross-border capital flows. Starting with its bilateral trade agreements with Singapore and Chile in 2003, the US government has sought and obtained agreements that enforce open capital accounts as a rule. These agreements make it difficult for signatories to manage cross-border capital flows, including in short-term financial instruments. In many recent US trade agreements such restrictions apply even in times of macroeconomic and financial crisis. This has raised eyebrows even at the International Monetary Fund (IMF, Siegel 2013). Paradoxically, capital account liberalization has become a norm in trade agreements just as professional opinion among economists was becoming more skeptical about the wisdom of free capital flows. The frequency and severity of financial crises associated with financial globalization have led many experts to believe that direct restrictions on the capital account have a second-best role to complement prudential regulation and, possibly, provide temporary breathing space during moments of extreme financial stress. The IMF itself, once at the vanguard of the push for capital-account liberalization, has officially revised its stance on capital controls. It now acknowledges a useful role for them where more direct remedies for underlying macroeconomic and financial imbalances are not available. Yet investment and financial services provisions in many FTAs run blithely against this new consensus among economists. A third area where trade agreements include provisions of questionable merit is socalled “investor-state dispute settlement procedures” (ISDS). These provisions have been imported into trade agreements from bilateral investment treaties (BIT). They are an anomaly in that they enable foreign investors, and they alone, to sue host governments in special arbitration tribunals and to seek monetary damages for regulatory, tax, and other policy changes that reduce their profits. Foreign investors (and their governments) see ISDS as protection against expropriation, but in practice arbitration tribunals interpret the protections provided more broadly than under, say, domestic US law (Johnson et al., 2015). Developing countries traditionally have signed on to ISDS in the expectation that it would compensate for their weak legal regimes and help attract direct foreign investment. But ISDS also suffers from its own problems: it operates outside accepted legal regimes, gives arbitrators too much power, does not follow or set precedents, and allows no appeal. Whatever the merits of ISDS for developing nations, it is more difficult to justify its inclusion in trade agreements among advanced countries with well-functioning legal systems (e.g. the prospective Transatlantic Trade and Investment Partnership (TTIP) between the U.S. and European countries).

Read the full paper here.

So you thought globalisation was a good idea?

Harvard Business Review, Lucas Chancel, 40 Years of Data Suggests 3 Myths About Globalization, 2 March 2018:

Globalization has led to a rise in global income inequality, not a reduction
Inequality between individuals across the world is the result of two competing forces: inequality between countries and inequality within countries. For example, strong growth in China and India contributed to significant global income growth, and therefore, decreased inequality between countries. However, inequality within these countries rose sharply. The top 1% income share rose from 7% to 22% in India, and 6% to 14% in China between 1980 and 2016.

Until recently, it has been impossible to know which of these two forces dominates globally, because of lack of data on inequality trends within countries, which many governments do not release publicly or uniformly. The World Inequality Report 2018 addresses this issue, relying on systematic, comparable, and transparent inequality statistics from high-income and emerging countries.

The conclusion is striking. Between 1980 and 2016, inequality between the world’s citizens increased, despite strong growth in emerging markets. Indeed, the share of global income accrued by the richest 1%, grew from 16% in 1980 to 20% by 2016. Meanwhile the income share of the poorest 50% hovered around 9%. The top 1% — individuals earning more than $13,500 per month — globally captured twice as much income growth as the bottom 50% of the world population over this period.

Income doesn’t trickle down

The second belief contests that high growth at the top is necessary to achieve some growth at the bottom of the distribution, in other words that rising inequality is necessary to elevate standards of living among the poorest. However, this idea is at odds with the data. When we compare Europe with the U.S., or China with India, it is clear that countries that experienced a higher rise in inequality were not better at lifting the incomes of their poorest citizens. Indeed, the U.S. is the extreme counterargument to the myth of trickle down: while incomes grew by more than 600% for the top 0.001% of Americans since 1980, the bottom half of the population was actually shut off from economic growth, with a close to zero rise in their yearly income. In Europe, growth among the top 0.001% was five times lower than in the U.S., but the poorest half of the population fared much better, experiencing a 26% growth in their average incomes. Despite having a consistently higher growth rate since 1980, the rise of inequality in China was much more moderate than in India. As a result, China was able to lift the incomes of the poorest half of the population at a rate that was four times faster than in India, enabling greater poverty reduction.

The trickle-down myth may have been debunked, but its ideas are still rooted in a number of current policies. For example, the idea that high income growth for rich individuals is a precondition to create jobs and growth at the bottom continues to be used to justify tax reductions for the richest, as seen in recent tax reform in the U.S. and France. A closer look at the data demands we rethink the rationale and legitimacy of such policies. 

Policy – not trade or technology – is most responsible for inequality

It is often said that rising inequality is inevitable — that it is a natural consequence of trade openness and digitalization that governments are powerless to counter. But the numbers presented above clearly demonstrate the diversity of inequality trajectories experienced by broadly comparable regions over the past decades. The U.S. and Europe, for instance, had similar population size and average income in 1980 — as well as analogous inequality levels. Both regions have also faced similar exposure to international markets and new technologies since, but their inequality trajectories have radically diverged. In the U.S., the bottom 50% income share decreased from 20% to 10% today, whereas in Europe it decreased from 24% to 22%.

Rather than openness to trade or digitalization, it is policy choices and institutional changes that explain divergences in inequality. After the neoliberal policy shift of the early 1980s, Europe resisted the impulse to turn its market economy into a market society more than the US — evidenced by differences on key policy areas concerning inequality. The progressivity of the tax code — how much more the rich pay as a percentage — was seriously undermined in the U.S., but much less so in continental Europe. The U.S. had the highest minimum wage of the world in the 1960s, but it has since decreased by 30%, whereas in France, the minimum wage has risen 300%. 

Access to higher education is costly and highly unequal in the U.S., whereas it is free in several European countries. Indeed, when Bavarian policymakers tried to introduce small university fees in the late 2000s, a referendum invalidated the decision. Health systems also provide universal access to good-quality healthcare in most European countries, while millions of Americans do not have access to healthcare plans.


Friday, 15 December 2017

"Inequality is neither a personal choice nor a national tragedy. It is a choice governments make"


Chief executive of the St Vincent de Paul Society national council Dr John Falzon, writing in The Guardian on 13 December 2017:

In 1952 a Catholic newspaper in Ireland proclaimed: “The welfare state is diluted socialism and socialism is disguised communism.”

Extreme? Yes. Dated? No. When you listen to the dying declarations of the spear-carriers for neoliberalism, it’s hard not to hear the same alarmist codswallop.

The logic goes like this: being unemployed and poor is bad because people choose to be unemployed or poor. If you receive income support, it is because you are unemployed and poor. Therefore, receiving income support is bad. Therefore, removing income support is good. Coincidentally, this means more money for the rich and less for the poor.

Social services minister Christian Porter’s recent National Press Club address was replete with denunciations of the “politics of envy” associated with redistributionist policies, as well as the “morally unacceptable” nature of social expenditure because it means placing a debt burden on the children of today to pay off as the adults of tomorrow.

These are old tropes. Joe Hockey used them regularly when he was treasurer. The intergenerational framework is always going to be a useful means of distracting from the uncomfortable reality of class inequality in the current generation.

A false divide is constructed between those who have a job (and pay taxes) and those who don’t.

It is time that we did away with this fictitious divide. It was always false. It implied that the low-paid cleaner had more in common with the mining magnate than with the person who is locked out of the labour market.

But now, especially as we try to understand the future of work and the massive changes to the structure of the labour market, it is time we consigned this nonsense to the rubbish bin of ideological history.

People who are low paid, casually employed, underemployed, unemployed, informally employed, on dodgy contracts, women who work as unpaid or low-paid carers, students who take whatever work they can get and remain silent about the indefinite training wages, sole parents, people with a disability, aged pensioners, veterans; all have more in common with each other and with other members of the working class than we dare admit.

By recognising this commonality, we can begin to reframe the way in which so-called welfare dependency and the “injustice” and “immorality” of social expenditure is presented. This is crucial at a time when the government has ruled out increasing the woefully inadequate Newstart payment, which has not seen an increase in real terms since 1994 .

The discussion needs some perspective. We have a minimum wage that sits at around 40% of the average weekly earnings and a Newstart payment that sits at around 40% of the minimum wage. The minimum wage is not a living wage and the unemployment benefit is not even a pale shadow of a living wage. And we see the consequences at the St Vincent de Paul Society every day, where topping up from charitable assistance has become the norm for many people simply to survive.

We need a solid jobs plan, and full employment should be a policy priority. Instead we keep getting served up a putting-the-boot-into-the-unemployed-plan and a slashing-social-expenditure-plan. Behavioural approaches won’t fix structural problems. The government can blame people all they like but this won’t address the inequality many are burdened with, as wages are suppressed and profits soar, buttressed by tax cuts, wage cuts and social expenditure cuts….

Our social security system was built in very different structural circumstances. The labour market is different. Work is different. We should be embarking on a serious reframing of how we can, collectively and with common resources, achieve social and economic security for everyone. We need, for example, to explore how government might play a leading role in achieving full employment instead of harassing the people who have been structurally excluded from jobs.

There is nothing innovative about marginalising people who are already made to feel that they have been stigmatised through drug-testing and cashless welfare cards.

There is nothing smart about a program like Path that uses young people for six months as cheap labour and then discards them.

We need to build a way forward that ensures that no one misses out on the essentials of life: a place to live, a place to work (or income adequacy for those who cannot engage in paid work), a place to learn (from early childhood through to university and TAFE), and a place to heal.

This means not just leaving these essentials to the whims of the market but actively ensuring that no one is excluded. This is an economic as well as a social imperative.

Inequality is buttressed and boosted by unfair rules that must be changed. We need to imagine a future predicated not on the perpetuation of inequality but the provision of social and economic security.

Inequality is neither a personal choice nor a national tragedy. It is a choice governments make.

Read the full article here.

Saturday, 27 May 2017

Quotes of the Week


Why do so few make it out of poverty? I can tell you from experience it is not because some have more merit than others. It is because being poor is a high-risk gamble. The asymmetry of outcomes for the poor is so enormous because it is so expensive to be poor. Imagine losing a job because your phone was cut off, or blowing off an exam because you spent the day in the ER dealing with something that preventative care would have avoided completely. Something as simple as that can spark a spiral of adversity almost impossible to recover from. The reality is that when you’re poor, if you make one mistake, you’re done. Everything becomes a sudden-death gamble. [Christian H. Cooper writing at Nautilus on Why Poverty Is Like A Disease, 20 April 2017]

The total rate paid by a high earner on $200,000 is nothing like 50 per cent. The first $18,200 isn't taxed at all because of the tax-free threshold, the next $18,000 is only taxed at 19 per cent, and so on, meaning the total tax taken works out at $71,232 including levies – a rate of 35.6 per cent. [Economic Editor for The Age, Peter Martin, writing on 24 May 2017]

Tuesday, 7 February 2017

On any given night there are young people all over Northern NSW who need a safe home for a few nights.... and you can help!


Social Futures E-News February 2017:


Social Futures and Pathfinders are seeking Family Carers for HYAP (Homeless Youth Assistance Program) to open their hearts and homes for young people aged 12-15 years from Grafton to Tweed Heads.

Family Carers help young people to have some time out in a safe environment in order to help prevent them becoming homeless or being caught up in the cycle of homelessness.

Young people will be placed with Family Carers by our HYAP Case Managers for up to 28 days while they work with the young person and their family and extended family to heal ruptured family relationships and explore opportunities for long term, safe, supported accommodation.

http://socialfutures.org.au/given-night-young-people-northern-nsw-need-safe-home-nights-can-help/

 NOTE:

Social Futures: Northern Rivers Social Development Council is a community based, not-for-profit social justice organisation based in Northern NSW.

Wednesday, 18 January 2017

The basic relationship between wealth, power, economic growth - globally and in Australia


It is no secret that the world is an unequal place when it comes to the distribution of wealth and the free exercise of political power.


This month Oxfam International released its Oxfam Briefing Paper January 2017, AN ECONOMY FOR THE 99%: It‟s time to build a human economy that benefits everyone, not just the privileged few.
This paper pointed out that new estimates show that just eight men own the same wealth as the poorest half of the world.
That’s eight men in a global population of over 7 billion people.
The briefing paper went on to say:
By any measure, we are living in the age of the super-rich, a second "gilded age" in which a glittering surface masks social problems and corruption. Oxfam's analysis of the super-rich includes all those individuals with a net worth of at least $1bn. The 1,810 dollar billionaires on the 2016 Forbes list, 89% of whom are men, own $6.5 trillion – as much wealth as the bottom 70% of humanity. While some billionaires owe their fortunes predominantly to hard work and talent, Oxfam's analysis of this group finds that one-third of the world’s billionaire wealth is derived from inherited wealth, while 43% can be linked to cronyism.

On 16 January 2017 BizNews reported that:

The world’s 8 richest people are, in order of net worth:
1.    Bill Gates: America founder of Microsoft (net worth $75 billion)
2.    Amancio Ortega: Spanish founder of Inditex which owns the Zara fashion chain (net worth $67 billion)
3.    Warren Buffett: American CEO and largest shareholder in Berkshire Hathaway (net worth $60.8 billion)
4.    Carlos Slim Helu: Mexican owner of Grupo Carso (net worth: $50 billion)
5.    Jeff Bezos: American founder, chairman and chief executive of Amazon (net worth: $45.2 billion)
6.    Mark Zuckerberg: American chairman, chief executive officer, and co-founder of Facebook (net worth $44.6 billion)
7.    Larry Ellison: American co-founder and CEO of Oracle  (net worth $43.6 billion)

8.    Michael Bloomberg: American founder, owner and CEO of Bloomberg LP (net worth: $40 billion)
Oxfam’s calculations are based on global wealth distribution data provided by the Credit Suisse Global Wealth Data book 2016.
The wealth of the world’s richest people was calculated using Forbes’ billionaires list last published in March 2016.
According to the Credit Suisse Research Institute in November 2016:

For financial wealth at least, direct estimates for the first quarter of 2016 were available for 27 countries: Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Japan, Korea, Latvia, Lithuania, New Zealand, Poland, Portugal, Singapore, Slovakia, Spain, Sweden, the United Kingdom and the United States. These countries account for 76% of global wealth in 2016.
Australia’s percentage share of global wealth was 2.5% in First quarter 2016, with 1.06 million individuals in a population of almost 23 million holding most of that wealth.
The wealth spread in Australia last year was calculated as:
§  20 individuals holding over US$1 billion each
§  39 individuals holding US$500 million-1 billion each
§  685 individuals holding US$100-500 million each
§  1,476 individuals holding US$50-100 million each
§  25,924 individuals holding US$10-50 million each
§  55,812 individuals holding US$5-10 million each
§  976,193 individuals holding US$1-5 million each
In Australia household gross wealth was estimated to be composed of 60.6% non-financial wealth and 39.4% financial wealth.
Forbes Media listed Australia's top eight richest people in 2016 as:

Blair Parry-Oakden - heiress to Cox Enterprises fortune ($8.8 billion)
Gina Rinehart - mining magnate ($8.5 billion)
Harry Triguboff - property developer ($6.9 billion)
Frank Lowy - co-founder Westfield Group ($5 billion)
Anthony Pratt - CEO Pratt Industries & global chair Visy Industries ($3.6 billion)
James Packer - media mogul ($3.5 billion)
John Gandel - property developer ($3.2 billion)
Lindsay Fox - trucking magnate ($2.8 billion)

On 20 August 2015 The Washington Post reported a new study (based on Does Wealth Inequality Matter for Growth? The Effect of Billionaire Wealth, Income Distribution, and Poverty, IZA DP No. 7733 November 2013 and later reworked as Billionaires and Growth by Sutirtha Bagchi and Jan Svejnar).

This study reportedly found that 65% of all billionaire wealth in Australia is based on political connections rather than on business innovation and, In sum, wealth inequality that comes from political connections is responsible for nearly all the negative effect on economic growth that we had observed from wealth inequality overall.

Or to put it another way, wealth amassed by certain billionaires world-wide, through the giving of political donations, public and private lobbying of politicians and/or the exchange of political favours, was responsible for nearly all declining economic growth this century

Monday, 17 October 2016

An est. 2.99 million people including 731,300 children are living below the poverty line in Australia, the 15th richest country in the world today


This was the Australian Council of Social Services (ACOSS) tweeting on 15 October 2016 on the eve of Anti-Poverty Week, in the 15th richest nation in the world based on Gross Domestic Product (GDP) per capita.

And these are some of the statistics informing its comment on the entrenched inequality in federal government economic and social policy in a country where in 2016 every person is nominally worth an est. $48,288 GDP per annum. 

Snapshot of poverty in Australia – in 2014:
· The poverty line (50% of median income) for a single adult was $426.30 a week. For a couple with 2 children, it was $895.22 a week.
· 2,990,300 million people (13.3% of the population), were living below the poverty line, after taking account of their housing costs.
· 731,300 children under the age of 15 (17.4% of all children) were living below the poverty line.
· Child poverty in Australia increased by 2 percentage points over the decade 200304 to 2013- 14.
· 36.1% of people receiving social security payments were living below the poverty line, including 55% of those receiving Newstart Allowance, 51.5% receiving Parenting Payment, 36.2% of those receiving Disability Support Pension, 24.3% receiving Carer Payment, and 13.9% of those on the Age Pension.
· 57.3% of people below the poverty line relied upon social security as their main income and 32.1% relied upon wages as their main income.
· Between 2012 and 2014, poverty rates increased for: children in lone parent families (36.8 to 40.6%), those receiving Youth Allowance (50.6 to 51.8% and those receiving Parenting Payment (47.2 to 51.5%). They remained very high (61.4% to 59.9%) from 2007 to 2014 for unemployed households.
· The vast majority of people below the poverty line were in rental housing in 2014 (59.7%), with most in private rental housing (44.2%). Only 15.5% of people living below the poverty line were home-owners.
The Poverty in Australia Report 2016 was produced in partnership with the Social Policy Research Centre at the University of NSW, with the support of the Australian Communities Foundation (Social Justice Fund), St Vincent de Paul Society, Mission Australia, and the Salvation Army. [ACOSS, 16 October 2016]


The ACOSS media release of 16 October stated:

The Australian Council of Social Service (ACOSS) today released a new report showing that 731,300 children or 17.4% of all children in Australia are living in poverty, an increase of 2 percentage points over the past 10 years (from 2004-2014).
The report finds that nearly three million people were living in poverty in Australia in 2014, or 13.3% of the general population.
“The overall picture from the last decade is one of persistent and entrenched poverty across the community with an increase in child poverty.
It is a national shame that after 25 years of economic growth, we have not done better at changing this trajectory and ensuring our most precious national resource, our children, are given the best possible start in life,” said ACOSS CEO Dr Cassandra Goldie.
“Those most at risk are children in lone parent families, who are more than three times likely to be living in poverty (40.6%) than those from couple families (12.5%). Since 2012, the poverty rate for children in lone parent families has gone up from 36.8 to 40.6%.
“The housing profile of people below poverty highlights the concentration of disadvantage in the rental market. The vast majority of people below the poverty line are in rental housing (59.7%), with most in private rental housing (44.2%). Only 15.5% of people living below the poverty line were home-owners.
“The report confirms that people who are unemployed are at greatest risk of poverty, with 63.2% living in poverty. Unsurprisingly, the majority of people below the poverty line relied on social security as their main source of income (57.3%), but a significant proportion received wages as their main income (32%). This indicates that having a job is no guarantee of keeping people above the breadline, especially if the job is low paying and insecure.
“Our report shows those doing it the toughest are overwhelmingly people living on the $38 a day Newstart payment, 55% of whom are in poverty. This is followed by families on Parenting Payment (51.5%), the majority of whom are lone parents with children.
“This report is a further wake up call to the Government to address the inadequacy of the lowest income support payments and bolster support to low income families through the family payments system. It is also a reminder that housing remains the biggest cost of living issue for households and must be addressed as a policy priority.
“Newstart and Youth Allowance are $110 and $158 a week below the poverty line respectively. Along with improvements to training and employment supports, an increase to these payments of at least $50 a week would go some way to alleviating poverty and improve people’s chances of finding paid work.
“The alarming increase in child poverty revealed by this report should also act as an urgent appeal to senators to reject further cuts to family payments, currently before the upper house. The cuts would strip another $60 a week from single parent families. The current proposal to withhold Newstart support for young people for up to four weeks should also be rejected. Both proposals would likely lead to increased poverty.
“At the start of Anti-Poverty Week, we call on all political leaders to put reducing poverty at the centre of the policy agenda. This must include assessing the poverty impact of all major policy changes,” Dr Goldie said.
The OECD Pensions At A Glance 2015 statistics indicate that 36 per cent of Australians receiving the aged pension also live below the poverty line – that’s well over 800,000 older people.
The Turnbull Government, like the Abbott Government before it, will quickly blame the poor for this problem as an excuse for inaction on its part.

This Anti-Poverty Week we can all email or ‘phone our federal MPs and senators and tell them there is no excuse for this level of poverty in a country which has experienced twenty-five years of continuous economic growth.

Contact details for member of parliament can be found at: http://www.aph.gov.au/Senators_and_Members/Members

Friday, 22 April 2016

So you think Australia is an egalitarian society? Think again.


Based on the World Population Clock as of 16 April 2016, a total of 74 million people (The 1 Per Cent) are said to own approximately 48 per cent of the entire world’s wealth.

In 2015 the Credit Suisse Group calculated total global wealth at US$250 trillion. 

An est. US$7.6 trillion of this was held offshore in low taxing jurisdictions (tax havens) and the majority of offshore wealth is managed by just 50 big banks, with the 10 busiest banks managing 40 percent of these offshore assets, according to Oxfam Briefing Paper 210

How much this represents in lost tax revenue to the countries in which profits were generated is unknown.

However, there is some indication that despite many of the extremely rich having residences in more than one country and often living in constant movement between these homes, they are not above seeking political influence in those countries in which they may not be citizens.

In countries in which they conduct business they are also politically active. In Britain the Sunday Times Rich List for 2015 revealed that: In total, 197 people who have featured in Rich Lists between 2011 and 2015 contributed £82.4m, just under half of the £174.7m donated in private and corporate cash. 25 gave more than £1m. Seven donors gave more than £2m.

What this all means is that by 2015 The 1 Per Cent had amassed US$120 trillion for their own exclusive advantage and use and, of these an est. 7.4 million individuals have the biggest share of that very large slice of the global riches pie.

In that 7.4 million strong group there is old money and new money - heads of royal houses, heirs of fortunes established in previous generations, hedge fund billionaires, investment bankers, oil barons, mining tycoons, industrialists, shipping magnates, the odd digital genius or two, oligarchs, financiers and other disreputable individuals.

Oxfam pointed out in that in 2015, 53 men and 9 women out of these 7.4 million rich individuals had a total combined wealth of $1.76 trillion.

According to the Institute for Policy Studies, by 2015 in America the 20 wealthiest people owned more wealth than the bottom half of the American population combined - that is more wealth than a total of 152 million people in 57 million households.

For the same year, Forbes listed Australia’s 50 richest residents (our very own 0.00020 per cent) as having a combined personal wealth of $85.41 billion - which would roughly equate to 5% of this country’s gross domestic product for 2015.

Also in 2015 news.com.au reported that the chief executive officers of Australia’s biggest corporations earned more than 100 times the annual salary/wage of the average worker - in some cases earning as much as $367,000 a week.

Going into 2015 Westpac Banking Corporation's CEO was already receiving an annual remuneration package worth an est. $13 million.

The gap between the very rich and the rest of Australia continues to grow.

In November 2015 Australian Bureau of Statistics reported that between 2003-04 and 2014-15 the 20% of individuals in the highest income quintile received 42 per cent or nearly half of the total growth in wages and salaries.
In September 2015 The Guardian reported that: The latest figures for Australian household incomes and wealth released last week showed that income inequality has risen in the past two years. The average annual income of the richest 20% rose by 7%, while median households saw their income rise by just 1.3% in the same period.

When one looks for evidence of political influence - it was not unknown for very large political donations from billionaires and millionaires to occur in years past, such as those from Lord Ashcroft and Reg Grundy. While in 2014-15 at least five of the first ten Australian billionaires included on the Forbes Rich List made more modest political donations - between $10,000- $100,000 and predominately to the Liberal-Nationals.

The rich tend to cluster together in life as well as politics. In 2015 Business Insider reported suburban clusters with the highest taxable incomes, of which the following are examples:

* Claremont-Claremont North-Karrakatta-Mount Claremont-Swanbourne, Western Australia, with 10,885 residents having a total combined average taxable income of est. $1.16 billion pa.
* Balmain-Birchgrove-Balmain East, New South Wales, where 10,515 have residents have a total combined average taxable income of est. $1.14 billion pa.
* Middle Cove-Castlecrag-Willoughby-North Willoughby-Willoughby East, NSW, with 10, 295 residents having a total combined average taxable income of est. $1.09 billion pa.
* Darling Point- Edgecliff-Point Piper, NSW, where 5,980 residents have a total combined average taxable income of est. $1.06 billion pa.
* Castle Cove, Roseville, Roseville Chase, NSW, with 8,985 residents having a total combined average taxable income of est. $976.68 million pa.
* Kooyong-Malvern-Malvern North, Victoria. where 7,755 residents have a total combined average taxable income of est. $817.36 million pa.

With all this conspicuous wealth in the top tier of a supposedly egalitarian society, one would expect that any journey towards the bottom of the pile would be more a gentle downward slope rather than a high drop from a cliff. 

However, in January 2015 there were 795,000 ordinary people at the bottom of that proverbial cliff, without a job and living on about $140 per week, and on any given night an est. 1 in every 200 men, women and children were without a permanent roof over their heads.

So when multi-millionaire Prime Minister Malcolm Bligh Turnbull and Treasurer Scott John Morrison begin to explain on 3 May this year how the approximately 90 per cent of Australian households (who don’t have net worths calculated in double digit millions or billions) should start to live on less or expect diminished public health and education provisions in order ’to assist' the national balance sheet, I strongly suggest that every low-income household in this group consider giving both these gentlemen the raised middle finger.

For the last three years it has been those on the bottom tiers of the wealth pyramid who have borne the brunt of punitive federal budget measures and it is time to say “No more!”.