Growing inequality puts Australians on same path as America: ACTU

Sydney Morning Herald September 13 2017 - 6:17am

Anna Patty

Australians face growing wage inequality and the threat of an American work culture of longer hours, low wages and poor job security, the peak labour organisation has warned.

In a new report to be released on Wednesday, the Australian Council of Trade Unions says income inequality is at its greatest level in 70 years with a majority of Australians experiencing a decline in living standards and job security.

Describing inequality as "the challenge of our time", the ACTU warns that if Australia fails to change course it is at risk of becoming an "Americanised society of high inequality and dead-end jobs, with long working hours, no holidays, zero job security and poverty pay levels".

"These are the economic conditions that breed high levels of crime, discrimination against minorities and a broad range of social problems," the report says.

"Australia must not go any further down this path. Instead we must return to being a country in which families on a normal income can afford to buy a home, provide a good education for their kids and have a decent standard of living.

"Societies that pay their workers fairly and provide job security tend to have low crime levels, less social problems and are more inclusive."

The federal government has denied inequality is a problem. Citing OECD data, the ACTU says that since the mid-1990s, income inequality in Australia has been getting worse.

"Real incomes for the top quintile of households grew by more than 40 per cent between 2004 and 2014 while those for the lowest quintile only grew by about 25 per cent," it says.

"Despite a blip just after the global financial crisis, when share prices fell for a short period and those rich enough to make lots of income through their investments took a hit, it is the clear that the general trend has been towards widening income inequality."

Rapid increases in the value of property, shares and other assets has meant wealth inequality has increased more sharply than wages inequality.

OECD economic survey data shows income levels of wealthier Australians rose by almost double the rate of increase gained by poorer Australians.

"The share of national income that goes to labour is at its lowest level in over 50 years. Meanwhile, the share of national income going into profits has increased dramatically since 1990," the report says.

The ACTU recommends removal of incentives to casualise work, restoration of a fair and independent industrial umpire, ensuring a level field for enterprise bargaining and rebuilding a strong safety net for all workers.

"Decades of neo-liberal policies centred on attacking workers have been central to rising inequality in Australia," the ACTU report says.

"The current tax system allows many corporations to pay little or no tax.

"Instead of moving further down the path that the USA has travelled we need to turn around and move in the direction of countries which combine rising living standards, fair wages, strong labour market institutions and decent societies."

 Households spending more on the basics: Australian Bureau of Statistics

Australian Financial ReviewSep 13 2017 2:04 PM

Jacob Greber

Australians are spending a modestly rising proportion of their incomes on basics such as housing, food, energy, healthcare and transport, according to annual official figures.

More than half - or $846 - of the average $1425 spent per week on goods and services was for non-discretionary purchases in 2015-16.

That accounts for 59 per cent of the total weekly spending budget, up from 56 per cent in 1984, the Australian Bureau of Statistics said on Wednesday.

Housing was the biggest drain, accounting for 20 per cent of the weekly budget, followed by food (17 per cent), and transport (15 per cent).

Three decades ago the largest contributors to household spending were food (20 per cent), transport (16 per cent) and then housing (13 per cent).

The burden of housing costs highlights the shortage of affordable housing and surging prices, but also the rising importance of categories such as education, energy and healthcare.

Compared to the last time the bureau conducted a national household expenditure service, spending on education has risen the most, up 44 per cent, followed by household services and operations (up 30 per cent), energy (26 per cent) healthcare (26 per cent), and housing (25 per cent).

Spending on items such as alcohol, tobacco, clothing, and household furnishings haven't changed much from six years ago.

The survey also showed that levels of financial stress in the community remain relatively stable.

In 2015-16 some 1.3 million Australians - accounting for 15 per cent of the total - reported signs of financial stress, compared to 16 per cent in 2009-10.

By contrast there has been a significant rise in the proportion of households reporting no markers of financial stress, rising to 59 per cent in 2015-16 from 54 per cent six years earlier.

Officials defined markers of financial stress as including households that are unable to raise $2000 in an emergency; spend more than they receive; were forced to pawn or sell items, skipped meals; couldn't afford a holiday for at least one week per year.

The report shows that while dwelling costs are high for most kinds of households, the impact is dramatically heavier for low wealth families, for whom the cost of housing consumes more than 30 per cent of spending. High wealth households, by contrast, spend less than half that.

Wealthier families spend more of their weekly budgets than poorer households on education, recreation, healthcare and furniture.