Via The Sydney Morning Herald: Inequality of Wealth Rising In Australia. Excerpt:
It has become unfashionable to talk about rising inequality in Australia. The mining boom is delivering untold riches, we are told, so shut up and let's enjoy the sunshine.
And yet, there are warning signs. In pockets of south-western Sydney, mortgage-holders struggle to meet payments. In the bush, farmers fight tooth and nail against water buybacks. Around kitchen tables, families decry the rising cost of living, as if living itself were increasingly a burden too expensive to bear. How can we be a rich nation and cry poor so often?
The answer, of course, is that the benefits of two decades of uninterrupted economic growth have not been shared evenly.
There are many ways to measure inequality. One is to compare the income of the top 10 per cent of households against the bottom 10 per cent. On this measure (and including government transfers as income) the richest 10 per cent of households in Australia received 4.3 times the income of the poorest households in 2007-08 (the latest year for which Bureau of Statistics data is available).
A decade before the multiple was just 3.77 times. And yes, this doesn't even begin to take into account inequality in wealth held in shares, super and housing.
There was a stage in the mid-2000s when it appeared growing inequality had been halted by the Howard government's boost to lower-income earners with generous pre-election handouts and middle-class welfare.
But those figures have since been revised and it is clear that the incomes of the rich have been rising at a faster percentage rate than for the poor, widening the gap even further in dollar terms.
Sydney is a microcosm of this growing disparity. It was truly astounding to delve recently into Bureau of Statistics data on average incomes by local areas. There was a near perfect correlation between the suburbs with the highest pre-existing incomes and the areas that enjoyed the fastest income growth between 2003-04 and 2007-08.
So while the average income from wages and salary grew 17.1 per cent across Sydney, in Mosman it grew 33.5 per cent. Meanwhile, eight local areas posted income growth below general consumer price inflation of 13.7 per cent. That is, in real terms, workers in East Fairfield, Burwood, Strathfield, north-west Bankstown, Kogarah, South Parramatta, inner Parramatta and south Baulkham Hills took a pay cut.
It is widely known that NSW has lagged behind other states on jobs and economic growth. What is less talked about is that, even within Sydney, a two-speed economy has developed.
Prime Minister Julia Gillard spoke last week of a ''patchwork'' economy emerging in response to the mining boom and a higher Australian dollar. But the divide in Sydney is even more stark: wealth, power and status to the east; struggle, disadvantage and toil for not much gain in the west.
Increasingly, Sydney is a collection of tribes, joined by geography but divided even more by class, income and opportunity.
Should we care about this rising inequality? It is often argued that as long as incomes are rising for all - that is, the rich are getting richer, but so are the poor - inequality matters little.
The former academic economist turned federal politician Andrew Leigh laid out the case for why inequality matters in his maiden speech to Parliament on Monday. Leigh is no bleeding heart - his economics pedigree is faultless - so his observations are striking.
''Rising inequality strains the social fabric,'' he said. ''Too much inequality cleaves us one from another: occupying different suburbs, using different services, and losing our sense of shared purpose. Anyone who believes in egalitarianism as the animating spirit of the Australian settlement should recoil at this vision of our future.''
Leigh has devoted much of his career to studying inequality, and his forthcoming book, Disconnected, marshals impressive evidence of Australia's fraying social capital. It includes a table comparing states and territories across five separate measures of social engagement.
NSW ranks near, or at, the bottom for all five. We are the third least likely to donate money to charity, the equal second last for volunteer work, the third most likely to cast an invalid vote, the second least likely to play an organised sport and the biggest litterers, by volume discarded, in the country.