On the thorny question of inequality

Robert Johnson writes: Re. “Keane: we’re missing the point on inequality” and “Razer: inequality IS the point” (Monday). Great to have Bernard’s and Helen’s takes yesterday on income/wealth inequality in Australia. As Charlie Lewis’ article on Monday showed, there’s not much that is especially progressive about Labor leader Shorten’s proposals, as currently articulated. But that doesn’t make them unwarranted.

The Gini coefficient clearly has its limitations (in a presentation on inequality some years ago in Africa, I pointed out that Burundi and Switzerland had the same Gini measure: similar level of [in]equality, but markedly different conditions), but it is just one measure that can be useful and very often is misused. But, as Helen points out, the more important work is around the groundwork that has been laid in building a “workable consensus” in Australia; I assume, with or without the conservatives on board.

For the government, this verges on “an inconvenient truth”. Bernard cites (even) IMF and OECD arguments that greater inequality is economically harmful. If the conservatives want us to believe that calls for dampening rising inequality is simply the “politics of envy” or focusing on a secondary issue or diverting attention from economic growth, then here’s what the World Economic Forum (hardly a stranger to neoliberalism) said earlier this year:

“There is mounting evidence that inequality has a statistically significant negative impact on growth, and that reducing inequality can enhance and strengthen the resilience of growth. According to research by the IMF, for example, if the income share of the top 20% increases, GDP growth tends to decline over the medium term. … In contrast, an increase in the income share of the bottom 20% is associated with higher GDP growth. If the income share of the rich is lifted by 1 percentage point, GDP growth decreases by 0.08 percentage points. If the income share of the poor and the middle class is increased by 1 percentage point, GDP growth increases by as much as 0.38 percentage points over five years.
Similarly, OECD research finds that an increase in inequality by three Gini points is correlated with a decrease in economic growth by 0.35 percentage points per year for 25 years – a cumulative loss of 8.5%.” (page 8)

As Helen says, Australian inequality is at an economically undesirable level. But, for the government’s natural global ally, the WEF, it is also actively damaging the Australian economy.

Canavan has all the finesse of an elephant with a broken leg

John Richardson writes: Re. “Canavan’s caravan of confusion should have hit the road”, yesterday. In posing the question as to why voters are so disengaged with politics and so suspicious of the political class, Bernard Keane suggests that there are any number of reasons, including the failure of politicians to take responsibility.


Methinks that Keane is not only too kind in his judgement of that band of pretentious crooks, who spend their days cynically deceiving the Australian people, but that he also underestimates the capacity of ordinary Australians to spot a phony.

Canavan has all the finesse of an elephant with a broken leg.

As the ABC’s Emma Alberici was able to establish on Tuesday, Canavan, like anyone else, could only have obtained Italian citizenship as a result of personally applying for same and completing the requisite documentation.

Our willingness to indulge their transparent efforts simply serves to transform our status as innocent victims to willing accomplices.

Richard Cobden writes: Section 44(a) of the Australian constitution is an actual embarrassment. It is a vestige of 1900 British racial hatred and imperialism. It slumbered quietly until awakened by an hubristic rush to the head of nationalist sentiment by the High Court. No similar provision appears e.g. in the US constitution, which is otherwise a model of xenophobia.

Only one serious, adult course is open. When Parliament resumes it must send to the voters as early as possible a very simple constitutional amendment: repeal s. 44(a).  The whole cringe-making episode can be put to bed by say November.  For once could our politicians do something for the public good?

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Peter Fray
Peter Fray
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