Granny’s no handicap. It’s a bit hard to attack a man who is off at the bedside of his sick grandmother, so Barack Obama should not lose anything from a couple of days off the campaign trail. In some ways the unscheduled visit to Hawaii might even be a blessing. Every day that goes by seems to see the Republicans falling further behind and they desperately need some kind of major mistake by their Democratic Party opponent to get back into the race. Mistakes are unlikely when you are not saying anything.
No marks for Malcolm. When Malcolm Turnbull was a Minister last year, the Cabinet he was a member of squibbed the whole question of guaranteeing immediate payment of a large part of savings if a bank went broke. Those financial regulators we hear so much about these days might have recommended the guarantee after seeing how the queues formed outside the Northern Rock Bank in the UK, but the Howard team would have nothing to do with it. The charitable view of this failure to act when advised to was a government not wanting to take the risk of provoking a run on a bank here in Australia by even mentioning the subject.
Now that he is Opposition Leader Turnbull, the circumstances are clearly different. Mr Turnbull was quite happy to raise the idea that a $20,000 bank deposit guarantee was not adequate and, as Treasury Secretary Ken Henry told a Senate Estimates Committee this morning, “in the week preceding the Government decisions (there was) quite some public debate, I might say unhelpful, about this matter.” Unhelpful indeed. Whereas when Cabinet Minister Turnbull was prepared to go along with the policy of silence there was no sense of financial crisis. And thus llittle real likelihood of mass withdrawals from banks. Things were different when he floated the idea that $100,000 or an unllimited amount should be guaranteed. If people took the Opposition Leader seriously then a run on a bank was not such a remote possibility.
Take a bow John and Peter. In that wonderful expression Gough Whitlam used to delight in using, those countries with which we generally choose to compare ourselves, have seen growing inequality between rich and poor over the past two decades while the number of people below the poverty line has also grown. The increase is widespread, affecting three-quarters of OECD countries. The scale of the change, says the report Growing Unequal? Income Distribution and Poverty in OECD Countries published today, is moderate but significant.
Australia, the report shows, is one of the exceptions among the 30 OECD members where income inequality has fallen although the story on poverty is not as happy with the Organisation finding poverty has risen, particularly since the year 2000. Australia is now below the OECD average for income inequality for the first time but poverty (meaning people who live on less than half median incomes) has not fallen, and at 12% is above the OECD average.
In its notes on Australia the OECD report says:
- Australia is one of the most socially mobile countries in the OECD. What your parents earned when you were a child has very little effect on your own earnings. Australia’s performance in this respect is much more like those of Denmark and Canada, not Italy, the United Kingdom and the United States, where there is much less mobility.
- Similarly, the educational attainment of the parent affects the educational achievements of the child less than in most other countries.
- The decrease in income inequality would have been even more dramatic if there had not been changes in social structures (smaller households, more single parent families) and ageing of the population, both of which tend to increase inequality. The usual measure of inequality – the Gini coefficient – would have fallen to 0.29 if these changes had not taken place.
- Australia does not spend as much as most OECD countries on cash benefits (unemployment benefits, family benefits, and so on). In a typical country, 22% of total income is from the government in the form of such benefits, compared to 14% in Australia. However, Australia targets these benefits much more tightly on low-income households than in any other country in the OECD. 40% of total spending on cash benefits goes to the poorest 20% of the population.
- The tax burden on low incomes is lower than elsewhere, partly because social spending is so low. Only Belgium, Denmark and Sweden do more to support low-income households through the tax/transfer system.
- In Australia, publicly provided services in the health, education and social housing sectors reduce overall income inequality by more than in most other countries.
- Relative income poverty has risen slightly since 1995: 12% rather than 11%. But because absolute incomes have increased rapidly, many poor people in 2005 do have more income than their counterparts in 1995 — poverty based on a constant income threshold in 1995 AUS$ decreased by half.
- The risk of poverty has increased for some groups of the Australian population. The risk is very high for people who are not working: 55% for all people of working-age – up from 46% in 1995 – and 70% if they are a single parent.
John Howard and Peter Costello should find that summary a very satisfactory report card on their efforts in government.