Why money only grows one some trees: distribution of income and wealth in Australia Essay

Why money only grows one some trees: distribution of income and wealth in Australia

By Andrew Bindon

In the wake of the current inflationary crisis in Australia, we have abruptly become aware that as Australians we are not immune to the pressures of the global economic market.   With rising interest rates now peaking at 7.25% in conjunction with 4.2% inflation reflect the repercussions of an economy experiencing a boom period. The ongoing strength of the Australian economy seeks to increase the standard of living in Australia; however the soaring interest rates and inflation pose a serious threat to middle and lower class families. John Wicks in 2006 stated that “Australia was indeed accelerating towards the egalitarian society... but …from the 1970s there has been a strong reversal”.   Wicks was perhaps correct, as of 1998 the richest 20% of Australians own 62.8% of the national wealth and trend that by 2030 will increase to the ownership of 70% of the wealth(Income Inequality John Wicks 2006). With the succession of the Howard Government, Prime Minster Rudd and Federal Treasurer Wayne Swan have announced the federal budget with the promise of offering financial assistance to “working families”, but will their efforts begin to solve the problem of inequality or merely buy more time?
The body of this article will examine the sources of income in Australia and analyse the methods used to measure inequality and the distribution of wealth. Finally, the current Fiscals policies of the Australian Government will be evaluated to determine whether our current government is the cure of, or cause of the rising separation between the “haves” and “have nots” in Australia. In terms of microeconomics it is the overall cost of living that is placing the most pressure on the venerable in Australia. The overall increase in price on basic household goods such as bread, fruit, vegetables and fuel (refer to figure 1) is driving up the cost of living and preventing Australians...