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Tuesday, August 31, 2004

Economic Myth - Part 1

The strong point of the Howard Government is supposed to be economic growth.  Australians are supposed to be better off and have more money.  I want to argue the point that this economic growth has funnelled money to a rich minority and not filtered down the the lower earners.  In other words, the economic growth has done bugger all for most Australians.  The growth has really been the equivalent of the top end of town winning the lottery, with the rest of us making do with a meat tray.  For example the lowest quintile weekly income for 1995-96 was $168.  By 2001 this was a whopping $180.  At the top end of town the weekly income went from $773 to $903.  Now I accept that the top will increase in dollar terms over the bottom, but what I can't accept is the percentage growth difference.  7% increase over 5 years for the lowest, 17% for the highest.  The picture is bleaker once we take into account the CPI rise over the same period, it increased by 12% (for basic living requirements from ABS).  Amazingly only the top quintile earnings grew faster, with the  fourth quintile more or less matching the CPI growth.  Therefore the vast majority of Australians are finding it harder to make ends meet than before Howard came in to power.  Whereas it can be dubious for a government to claim credit over economic growth figures, it certainly is responsible for the distribution of wealth.  In this aspect the Howard government has failed abysmally.  There has been no social program whatsoever for the last eight years.  What is more disturbing is the unquestioning attitude of the mass media, that the ecomomy has been well managed.  The Labor party themselves don't seem to want to challenge this gross misconception.  Is the economy well managed if one Australian receives the growth?  No?  Well then where do you draw the line?  Surely the bare minimum benchmark must be that most Australians benefit, and even on this dodgy measure Howard has failed.  It has been managed to benefit the few, whereas the majority of people have gone backwards.  Regressive measures such as the GST have made the spread of wealth even more inequitable.  And how do we help people climb out of this hole?  Public education, which as I have said before is the number one way to increase the productivity of the country as a whole, has been stripped down.  For more stats and analysis look at Examining Recent Changes in Income Distribution in Australia by Peter Saunders.

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