As economy lags, rich-poor divide grows

Used with permission of Alan Moir

The International Monetary Fund (IMF) has steeply downgraded forecasts for Australia’s economy, predicting it will grow at just 1.7% this year.

The drop is part of a general slowdown in the world economy, which is now expected to experience its worst performance since the Global Financial Crisis of 2008-09.

The IMF also predicts unemployment will remain above 5% this year and the next.

Meanwhile, the Reserve Bank of Australia (RBA) noted in its October meeting that there "had not yet been evidence" of a lift in household spending since the Coalition government's modest tax cuts in this year's budget. The RBA said consumers continue to be squeezed by low wages.

The economy is clearly in the doldrums and the situation only looks like getting worse.

The IMF also found that Australia has one of the biggest gaps between richest cities and poorest regions in the developed world, warning this could worsen without direct government assistance.

Research released by the IMF on October 10 showed that of the world's 22 most developed nations, Australia ranked fourth worst on this measure and the gap between rich and poor regions is only growing.

But it gets worse — at least for the poor.

Anglicare’s Jobs Availability Snapshot found that the government’s jobs program for long-term unemployed is taking, on average, five years to find people work. In the meantime, jobseekers are forced to live on “dangerously low” Newstart Allowance payments that can be readily switched off by Centrelink.

The report has led to renewed calls for an overhaul of the welfare system.

Australian Unemployed Workers’ Union spokesperson Jeremy Poxon said the findings “shoot dead the government’s rhetoric” that employment is the best form of welfare.

“These people are struggling to find work anywhere, so it’s pretty cruel to force them into a punitive program based on finding jobs,” Poxon said.

In addition to raising the Newstart allowance rate, Poxon said the government should consider a federally-funded employment guarantee “so every Australian who wants to work can."

That’s not all.

A recent survey by food charity Foodbank found that one-in-five Australians say they ran out of food at least once in the past year and there has been an alarming 22% rise in the number of people seeking food assistance.

Foodbank says the drought, rising costs of living and the low level of Newstart are among the factors fuelling this rise in people requesting help. The charity is calling on the Coalition government to take urgent action to help hungry Australians.

The government is instead imposing more attacks and restrictions on welfare recipients, through measures such as issuing knowingly incorrect robodebts, the cashless welfare card and maintaining Newstart at below poverty line levels.

So what can be done?

Clearly, we need a radical reconstruction of the class-based system in this country. We need to replace the existing order in which the super-rich 1% rule supreme, for one that works in the interests of the 99%.

Green Left Weekly has been campaigning for decades in defence of the 99% and for a new system, based on democracy, social equality and environmental sustainability.

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