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Australians like to think we live in a fair society. It is a shocking indictment of an income and wealth rich society that such a high percentage of our population have no hope of prosperity or even a modicum of security.


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It is an indictment of a policy regime that deliberately undermines the chances that many young Australians have of a decent material life while it shamelessly transfers public resources to the children of the rich to purchase even better schooling facilities. As the Report states — it is a disgrace that so many people in such a wealthy nation can be so poor.

But it is true that with rising dependency ratios a high proportion of non-workers in the population , the remaining workers have to be more productive to maintain material standards of living for all over time. Thus, apart from the questions of human rights and distributional equity, the bean counters should be concerned with entrenched and rising disadvantage because it undermines output and income generating process and reduces the prosperity of the nation as a whole. Of course, it severely damages the individuals and their families who become locked into entrenched disadvantage.

The following two graphs show the distribution of GDP per adult for US dollars for the countries that the Databook collected data for, and Wealth per adult for US dollars for the countries that data was available for, respectively.


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The countries are ranked left to right, largest to smallest. The red columns are Australia to highlight the average prosperity of the nation. The degree of inequality in income and wealth per adult across the World is stunning as I am sure you will agree. Where you are born is a lottery but really matters on average. GDP per adult, US dollars. Wealth per adult, US dollars. As the CEDA Report data shows, the concept of the average per adult measure of prosperity is highly misleading if not meaningless in the face of the internal distribution of fortunes within the nation.

His main thesis was that the demands of the Australian outback and bush life in the early colonial period had built an Australian white culture that was egalitarian in nature. It was a blokey narrative. The frontier was harsh and so Australians white ones were considered to be highly resourceful, innovative and daring.

Where to From Here?

He was a very interesting character who was a member of the Communist Party and felt all of the discrimination that the Australian version of McCarthyism delivered in the early s. The Australian Legend is a powerful narrative and elements of it are undoubtedly representative of something about Australian culture. But the notion that Australia is an egalitarian and fair country does not meet the reality.

In the full employment period between WWW2 and the mids, when the Government acted as a mediator between labour and capital to ensure that working conditions were safe, that wage settlements allowed workers to participate in productivity growth, and that there was adequate income support for those who could not work or were temporarily between jobs.

That trend ended in the mids with the onset of Monetarism neo-liberalism. Full employment was abandoned, labour market regulations were slowly dismantled, the gap between real wages growth and productivity growth widened so that the wage share fell dramatically, and income support systems were modified and became part of a pernicious attack on the prosperity of the most disadvantaged Australians.

Individualism became the hallmark of the national ethos not egalitarianism. Fairfax press economist Ross Gittins wrote in his article July 17, — Egalitarianism in Australia is just a facade — that:. That is, 12 times what they would get if incomes were distributed equally. He notes that this decline in inequality was due to the influence of trade unions, a progressive tax system, and targetted, means-tested income support. It was also aided by the fact that unemployment rarely went close to 2 per cent and there was no unemployment.

The government sector was an implicit employer of last resort. A person could always get a job somewhere in the public sector if they wanted to work. But this changed with the rising dominance of neo-liberalism. Since that time, the Australian government has acted more as an agent for the rich and the corporate interests than it has for all Australians.

Trade unions have been undermined by harsh industrial laws, the progression in the income tax system has been eroded and more indirect taxation has been imposed, and income support systems have been retrenched.