The widening wealth gap

Economy, Politics

Jun 23, 2014

Oxfam Australia has just released a report ‘Still the Lucky Country?’ which highlights the widening gap in wealth and incomes in Australia.

It found that the nine richest people in Australia have wealth that equates to the poorest 20% of the community. That 20% represents about 4.5 million people.

The nine richest people have a combined net worth of $67.7 billion. They are: Gina Rinehart, $17.7 billion; Anthony Pratt, $7 billion; James Packer, $6.6 billion; Ivan Glasenberg, $6.3 billion; Andrew Forrest, $5 billion; Frank Lowy, $4.6 billion; Harry Triguboff, $4.3 billion; John Gandel, $3.2 billion and Paul Ramsay (now deceased), $3 billion.

The top three wealthiest in Australia inherited most of their wealth. As American devotees of baseball would say ‘They were born on third base’.

Oxfam took a national poll of 1,000 people which revealed that Australians were concerned about inequality.

76% said that the wealthy don’t pay enough tax.
75% want the government to close the wealth divide.
Two thirds of people said that it is unfair that the richest 1% of Australians own more than the poorest 60%.

Oxfam noted that inequality in the world is growing with 68 billionaires. They are as rich as a half of the rest of the world.

Pope Francis has been denouncing inequality as ‘increasingly intolerable’ and the ‘seat of social evil in the world’. But it is not only the Pope who is expressing major concerns. The plutocracy has been joining him.

Paul Pulman, the CEO of Unilever, describes this growing inequality as a ‘capitalist threat to capitalism’. The Lord Mayor of London Fiona Woolf warned that capitalism needed to be ‘for all and not just the gilded few’.

Prince Charles said ‘The long term job of capitalism is to serve people, rather than the other way round’.

The managing director of the IMF, Christine Lagarde, and a former Conservative French minister called for ‘more progressive income taxes and greater use of property taxes’.

The Governor of the Bank of England, Mark Carney, said that ‘rising income inequality was real and international … just as any revolution eats its children, unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself’.

Mark Carnegie an Australian venture capitalist puts it this way ‘The enemy that we face at the moment is growing inequality, growing divisiveness, growing disengagement….in America you see society just absolutely sheering because the rich and the poor are just getting further and further apart.’

A wide range of people are now raising serious concern about growing inequality. We are all being called to account for this growing inequality and the economic and social consequences that it will inevitably bring. We need to consider wealth and property taxes as well as raising the rate of personal tax on high income earners, like the CEO’s of our banks.