Billionaires' riches grow as poor lose out

One in eight Australians live below the poverty line.

We've been told opportunity, prosperity and more freedoms came to Australia under the banner of capitalism and the “free-market” in the 1980s and 90s after the economic slump of two recessions.

But when neoliberal ideals and rhetoric are set aside, a grim picture of the great, and ever growing, divide between the rich and poor in Australia emerges yet again.

Between 1920 and 1980, inequality in Australia was shrinking, until a perceived sense of national stagnation took hold and the Hawke-Keating Labor government made the leap into the global free market.

Weary-eyed, the public watched as trade barriers were torn down, markets deregulated, inflation and tax rates kept low, and the economy became increasingly market-oriented. Thirty years later, with the promise of collective prosperity long dissipated, many Australians are becoming disillusioned with the foundation of our economic system.

Now, the Australian Council of Social Services has found that one in eight Australians, including one in six children, live below the poverty line. Since 2001, the number of Australians living in poverty has risen from 11% to 12.8%; more than 2.3 million people survive in austere conditions.

The number of Australians struggling to put food on the table has grown, but so too has the wealth held by Australia’s financial elite.

Australia's top 1% almost doubled their share of national income over the past three decades, and the top 0.1% tripled it. Apart from the top 1% raising their ownership of national wealth from 4.4% in 1980 to 8.8% in 2008, the richest magnates have grown their wealth over the past decade, and could be considered among Australia’s all-time richest, according to the BRW rich list.

Income disparity is rising sharply as a global trend. Among Western countries, the rate of growth of the fortunes of Australia’s 1% is eclipsed only by the US and Britain.

Australia also has one of the highest rates of sole-parent unemployment. Just over half of sole parents are in the workforce, and this is a big contributor to the rate of children living in poverty. The Organisation for Economic Cooperation and Development (OECD) predicts this will rise by 20% in the next 25 years.

Despite these disconcerting facts, Prime Minister Julia Gillard and opposition leader Tony Abbott have supported amendments to social security payments that will cut the incomes of 100,000 sole parents (mostly women).

Thankfully, the Gina Rineharts of this world are investing in Australia, being among those who “help the poor and our young” the most — as Rinehart put it.

As head honcho in the billionaires club, Rinehart makes the equivalent to an annual full-time minimum wage every 53 seconds, and gives little acknowledgement to the minimal contribution (about 0.5%) the mining industry made to national government revenue at the height of the mining boom.

Rinehart has now surpassed Christy Walton of the Walmart fortune ($25.89 billion) as the world’s richest woman, with her personal fortune totalling more than $29.17 billion net worth. This comes one year after she hit $10.3 billion, earning herself the title of Australia’s richest person and the first to ever to pass $10 billion.

On the frontline of championing a plutocratic rule-by-the-wealthy, the mining tycoon has called on the government to lower the minimum wage and cut taxes, ostensibly to stimulate employment.

She also warns that Australia will fall into the same economic traps as the eurozone should it fail to stamp out high resource taxes, regulation and “socialist” policies.

During the global financial crisis, unemployment peaked at 5.9%, a figure which could have jumped to 19% had the agriculture, tourism and manufacturing industries adopted the approach taken by the mining industry, says Treasury.

At first sight of a drop in the price of commodities, thousands of jobs were cut in the sector — illustrating rising job insecurity in Australia.

Australia ranks second on the job insecurity scale among OECD countries, beaten by only Spain, where unemployment is 25%. More than 40% of the Australian workforce have “non-standard” employment such as casual, seasonal and contract work, which is characterised by irregular and unpredictable pay and working hours, inferior rights and leave entitlements, and lack of voice over wages and working conditions.

More than 2 million workers are casually employed, with no leave entitlements or guarantee of minimum hours, and 1 million people are on contract work.

The OECD predicts Australia will reap the benefits of the mining boom well into the next financial year, with further industry expansion. There is no doubt this “benefit” will swing to Rinehart and her cohorts.

This will mean an even more polarised economy, dragging Australia further from any notion of an “egalitarian” society. The more wealth and power billionaires hold, the easier it is to lobby and push the government to enact policies that hurt ordinary people and drive more into poverty and insecurity.

Inversely, workers and the poor must struggle to hold onto their political voice. But power also lies in numbers, and ordinary people have this over the super-rich 1%.

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