Reframing wealth: A stark disconnect between wealth and poverty
Dec 23, 2024
Australia is often celebrated as a wealthy nation, with a prosperity that is purportedly shared across its population. However, such assertions crumble under scrutiny. According to the 2021 census, 122,494 Australians were denied the basic right of shelter due to their inability to afford housing. This stark reality reveals the vast and growing chasm between the affluent and the impoverished.
The concentration of wealth
The distribution of wealth in Australia paints a sobering picture. The top 10% of households control nearly 50% of total household wealth, averaging over $5 million per household. The wealth distribution among the richest individuals underscores this imbalance:
- Wealth of Top Individual: $40 billion (0.25% of total national wealth)
- Wealth of Top 5 Individuals: $131 billion (0.9% of total national wealth)
- Wealth of Top 10 Individuals: $175 billion (1.3% of total national wealth)
- Wealth of Top 100 Individuals: $625 billion (4.5% of total national wealth)
Meanwhile, the bottom 10% of the population are burdened with net liabilities or negligible assets, often leaving them in a state of deprivation. For this sector, the concept of wealth is a cruel abstraction, replaced instead by persistent debt and poverty.
The housing crisis: A manifestation of poverty
The current housing crisis is a stark indicator of systemic poverty. Housing Australia projects a shortfall of 106,300 dwellings, contributing to the 122,494 individuals experiencing homelessness recorded in the 2021 census. Particularly striking is the disproportionate impact on Aboriginal and Torres Strait Islander populations, who represent 20% of those without shelter despite making up only 3.2% of the total population.
Even a cursory analysis of the wealth concentrated at the top reveals its transformative potential. Using high-end estimates of construction costs (and excluding the cost of land), the wealth of Australia’s richest could resolve the housing crisis multiple times over:
- Homes Built with Top Individual’s Wealth: 106,667
- Homes Built with Top 5’s Wealth: 349,333
- Homes Built with Top 10’s Wealth: 466,667
- Homes Built with Top 100’s Wealth: 6,666,667
The cost of social infrastructure
The potential impact of redirecting wealth is not limited to housing. Using high-end cost estimates, the wealth of Australia’s richest could fund substantial social infrastructure:
- Primary Schools Built with Top 5’s Wealth ($131B): 4,367
- Primary Schools Built with Top 10’s Wealth ($175B): 5,833
- Primary Schools Built with Top 100’s Wealth ($625B): 20,833
- Secondary Schools Built with Top 5’s Wealth ($131B): 1,310
- Secondary Schools Built with Top 10’s Wealth ($175B): 1,750
- Secondary Schools Built with Top 100’s Wealth ($625B): 6,250
- Hospital Beds Funded with Top 5’s Wealth ($131B): 131,000
- Hospital Beds Funded with Top 10’s Wealth ($175B): 175,000
- Hospital Beds Funded with Top 100’s Wealth ($625B): 625,000
Policy choices and missed opportunities
Despite the glaring disparities, government policies continue to favour the wealthy. Progressive taxation, aimed at addressing income inequities, has been undermined by systemic loopholes. A corporate accountant recently boasted of arranging accounts to ensure a firm paid no tax, prompting the question: how many hospitals or schools were denied to the public as a result?
Tax cuts introduced by successive governments exacerbate this inequality. For instance, the Treasury Laws Amendment (Tax Relief So Working Australians Keep More of Their Money) Bill 2019 provided $158 billion in income tax reductions—a figure almost equal to the combined wealth of the top 10 individuals. These cuts translate directly into diminished public services:
- Reduction in Homes Built: 349,333
- Reduction in Primary Schools Built: 5,833
- Reduction in Hospital Beds Funded: 175,000
Such policy decisions reflect a tacit acceptance of widening inequality. By prioritising tax cuts over social investment, governments effectively choose to deepen the divide between the wealthy and the impoverished.
The myth of market solutions
The persistent belief in free-market solutions to social crises has proven woefully inadequate. Markets will never equitably provide essential services such as housing, healthcare, and education. The daily struggles of millions of Australians are a testament to the failure of market-driven approaches.
The wealth concentrated in the hands of a few has the potential to eradicate homelessness, fund education, and revolutionise healthcare. Yet, the systemic disconnect between wealth and poverty ensures that such transformative possibilities remain unrealised. Until society reframes wealth not as a private privilege but as a public responsibility, the gap between affluence and deprivation will continue to widen—a damning indictment of a nation that claims to share its prosperity.
John Frew worked in public education, including as foundation principal at a secondary school for students with Conduct Disorder and Oppositional Disturbance. John has authored numerous books the latest being ‘Neuroscience and Teaching Very Difficult Kids’. His previous books ‘The Impact of Modern Neuroscience on Contemporary Teaching’ and ‘Insights into the Modern Classroom’ have focused on behaviour management in schools. Since retiring, he has founded the Frew Consultants Group which provides a range of supportive resources for teachers who manage children with severe behaviour problems.
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