New unreported data shows Australia’s proud tradition of inclusive economic growth is at risk, writes Shadow Finance Minister Jim Chalmers.
For Australia to succeed and prosper as an economy and a society, we need to ensure growth is inclusive, hard work is rewarded, and there’s a decent safety net for those left behind.
It’s not enough that inclusive growth, epitomised by the fair go all round, has been a cherished part of our national history – it needs to be the centrepiece of our future as well.
Inclusive growth now dominates the global policy conversation because inequality and social immobility are stalking the advanced countries, threatening economies, dividing societies, challenging our institutions and pushing people to the populist fringes.
Just because Australia has a long tradition of inclusion and we compare well against our peers, we can’t be complacent about the future or ignore the likely impact of Turnbull Government policies.
A new report from the World Economic Forum ranks Australia in the top 10 most inclusive economies in the developed world. But it also rings alarm bells about some very worrying trends.
For example, the WEF flags emerging concerns with the distribution of income and wealth; quality and equity of education; participation of women; underemployment and social protection.
More specifically, we drop from 8th overall to 16th when it comes to social inclusion measured by median household income, a proxy for living standards; the poverty rate, which goes to progress at the bottom of the income scale; income Gini, an international measure of inequality, and; wealth Gini, which indicates how wealth is concentrated in a particular country.
The WEF made particular mention of Australia’s sub-par wealth Gini trend and our poverty rate, which indicated more than 1 in 10 people were living on less than half of Australia’s median income of about $58 a day. That’s a higher proportion of people living in relative poverty than 20 of the 29 other advanced economies included in the report.
Our intergenerational equity rating, which measures whether economic performance is being pursued at the expense of our children and grandchildren, has also taken a hit in the past half a decade.
The report ranks Australia 18th for its intergenerational equity trend over the past five years, taking into account investments in human capital; depletion of natural resources; and public indebtedness as a share of GDP – or how much the current generation is borrowing against future ones.
That pillar also considers the proportion of retirees and youth compared with the working-age population, to indicate likely pressure on countries’ finances; their carbon intensity of economic output; and the country’s relative performance on climate change.
The WEF noted Australia could also do better in terms of productive employment, including female labour force participation, youth unemployment and social mobility.
Wage and non-wage compensation, including the gender pay gap and the availability and cost of child care, was another category the international not-for-profit flagged as a growing concern.
In terms of social protections, Australia was in the bottom half of the 30 advanced economies.
Perhaps most troubling is that the Turnbull Government is not only ignoring these emerging problems, but it is actively exacerbating and accelerating them through its unfair policies.
The economy is shrinking, deficits are growing, and tens of thousands of jobs have been lost in the last year alone.
If Malcolm Turnbull and his ministers were serious about inclusive growth, they wouldn’t be pushing ahead with a $50 billion tax gift for big businesses and multinationals.
They wouldn’t be hacking into our safety net; they wouldn’t be ripping $30 billion out of our schools; and they wouldn’t be attacking Medicare.
They wouldn’t be taking from the most vulnerable people in our community.
January should be a time to consider the type of country we want to live in – not just for this year, but in the years ahead.
Few Australians would want to see the worrying trends identified in this previously unreported analysis deteriorate further.
If we lose the fair go, if we abandon inclusive growth as a key national objective, we’ll lose a key part of what makes us proud to call this part of the world home.
Jim Chalmers MP has been the Shadow Finance Minister since July 2016 and the Member for Rankin, representing the people and suburbs of southern Brisbane and Logan City, since September 2013. He has also previously served as the Shadow Minister for Financial Services and Superannuation, Shadow Minister for Sport, the Shadow Assistant Minister for Trade, Investment and Productivity and the Shadow Assistant Minister for Resources. Before being elected to Parliament, Jim was the Executive Director of the Chifley Research Centre and prior to that, Chief of Staff to the Deputy Prime Minister and Treasurer. He has a PhD in political science and international relations and a first class honours degree in public policy. Jim’s book Glory Daze was published in July 2013 and he tweets as @JEChalmers.