The politics and reality of inequality
It appears the issue of inequality is back on the political agenda in Australia. It is as if the nation has woken from a self-administered sedative enabled by consumerism and a preoccupation with an exorbitant housing market. For those of us who work in the community services sector the reality of inequality comes as no surprise.
This year marks the 30th anniversary of former Prime Minister Bob Hawke’s claim that “By 1990, no Australian child will be living in poverty.” It was a statement which many at the time thought was a bold moral claim but lacked reality and an understanding of the complexity and causes of poverty and disadvantage. It was delivered in the height of the 1987 Australian election campaign. Soon the nation was plunged into economic disorder following the US stock market collapse in October of that year.
Some economists talk of the recent end of the resources boom as if it was once a panacea to all our problems. Nothing could be further from the truth. During the past decade at Wesley Mission, I have seen the impact of inequality on too many families and individuals. It has not been a dormant rock suddenly uncovered but a river flowing steadily beneath our feet if we had but cared to take a passing look.
The 2015 Wesley Report, Facing Financial Stress, reveals that an alarming 44 per cent of NSW households were suffering financial stress – up from 37 per cent in 2010. The survey also found that 38 per cent of NSW households were technically insolvent - spending more than they earn - a seven per cent increase. Disposable income has decreased.
The Australian Council of Social Services recently found that 731,000 children or 17.4 per cent of all Australian children are living in poverty and in the decade to 2014, the child poverty rate increased by 2 percentage points. If you are in a sole parent family the circumstances are much worse: 40 per cent of children live in relative poverty which is a 3.2 per cent increase since 2012.
Part of our problem with inequality is in its definition. It can be looked at through the vista of class, culture and gender. Poverty and wealth, however, are two sides of the same coin. While our focus is often people experiencing poverty, we must also give attention to the wealthy and affluent and to the structures which create economic inequality. Neoclassic economics sees wealth as a reward for personal productivity and achievement. But this paradigm does not take into account structural factors, power, exploitation or issues of social justice. It gives us a skewed view of the causes of inequality and isolates ‘the poor’ from the rest of us and can lead to a culture of blame and an unreasonable characterisation of people experiencing poverty.
Despite the stories about ‘self-made people’, they are usually the exception not the rule. It has been said that the wealth of future generations will be mainly determined by the wealth of their parents. Assets both physical and financial create wealth but they also have the power to shape future inequalities for successive generations. Such a view is not about ‘cutting down tall poppies’ or ‘class war’ but the reality of economic life which is getting harder for those without. In Australia about 10 per cent of households own 50 per cent of private wealth while the remaining 90 per cent divide up the other 50 per cent. In western liberal and social democratic societies there are growing inequalities between the very rich one per cent and upper middle households, and the other between middle class households and the very poor and marginalised, many of whom we at Wesley Mission care for each day.
Inequality has been marked as a press button issue in the lead up to the next election. In the recent British election it mobilised the hearts and minds of people who have missed out. In Australia we are possibly facing a shattering collapse of the overheated property market. Politicians know that households are carrying more debt; in fact Australia now has the second highest household debt in the world – twice that of the United States which is just now recovering from the GFC. This is not just a result of massive mortgages but also from the fact that households are bearing more of the costs of health, education and transport. Traditionally in Australia, inequality and poverty have become major issues at times when both factors bite into the middle class. It characterised politics in the 1890s with the formation of the Labor Party and the growth of state services, during the Great Depression, throughout the late 1980s and early 1990s, and more recently during the GFC.
As both a community service and church, Wesley Mission welcomes a genuine debate about inequality, wealth and poverty as we stand alongside those in most need. We have been vocal about such issues long before their recent currency in Canberra and uptake in public discourse. My own understanding of the Christian faith urges us to do so. We hope and pray that we all might have both the moral strength and political will to address inequality in its many forms and that such a commitment is remembered in the future for what it delivered rather than for what it pronounced.