Interesting/alarming news from Oxfam today with their annual richest in the world conference in London. The top eight billionaires in the world have a combined wealth greater than the poorest 50% of the worlds population. And Australia isn’t exempt from this inequality. I quote from Oxfam’s 2017 Inequality Report for Australia.
The latest data from Credit Suisse shows that wealth in Australia is concentrated in the hands of a few: the top 1% have over 22% of total Australian wealth.
And, the top 1% own more wealth than the bottom 70% of Australians combined.
The two richest billionaires in Australia, who are part of the top 1%, own more than US $16 billion between them, which is more than the combined wealth of the poorest 20% of the Australian population.
Now I can see all those merchant bankers and land developers jumping to justify this inequality with grand, self promoting explanations how they work so hard and the structure of society expects, nay, demands that you have people like this earning vast sums, how else can society advance?
The reality is that a society that only values people by their wealth and that allows the aggregation of wealth by a select minority is not a society that is moving forward. Equally, we cannot fall back in to the extreme left’s utopian view. The reality is that there have to be incentives in the form of profits and wages in order for the system to function efficiently. The problem is that we’re not all on an equal footing. There are many examples of unjustified government interference in the market, just look at the incentives for planting grape vines, creating movies and, the latest, negative gearing on investment properties. Negative gearing is a classic example of government largesse being given to the wealthy (and before you start bleating about mum and dad investors, Scott Morrison, if you can afford a second mortgage for an investment property then you are wealthy. Banks won’t extend those services to poor people). Not only are you allowing wealthy people to reduce their tax liability (once again Scott, that’s why these people do it), but you are concentrating wealth into the hands of the wealthy again by making it harder for renters to purchase their own home by driving the prices of houses up. And this is a symptom of a greater problem. Governments have reduced their expenditure on social housing because they claim its more efficient for the private sector provide it. Their concession to the poor is to provide rental subsidies to those on welfare payments. So in effect the government takes a double hit – they have to pay welfare recipients a subsidy and they give the property owner the ability to write off more tax. I wonder if anyone in Treasury has ever bothered to do the sums? What is the total of rental subsidies and tax breaks costing the government? Add to this the increase subsidies given to first home buyers in an attempt to relieve the financial stress on them trying to buy their first home.
This ongoing inequity in society is starting to crack the fabric of society both here and abroad. The signs are there – Brexit, Trump’s success and the ongoing disillusionment with politicians in Australia, all signs of people feeling that they are missing out and that their voices are not being listened to. People will only take this crap for so long.
Its time for at least one of the parties to listen, and my guess it will have to be the Labor Party. Its time to end government subsidies to the wealthy in the form of tax write-offs. No more negative gearing, no more tax schemes that allow the wealthy to use the public purse to top up their wealth. No more exemptions on superannuation for people with extreme wealth. We have the answers, we just need people to listen.