Rich getting richer, wealth gap increasing: ACOSS report

Extract from ABC News

AM

By Will Ockenden

Updated 19 minutes ago

Photo: ACOSS says many professionals in industries such as finance have had much bigger pay rises than lower paid workers. (AAP: Patrick Hamilton)

The peak welfare lobby group says inequality between the richest and poorest has grown alongside the nation's run of nearly a quarter of a century without recession.

An Australian Council of Social Service (ACOSS) study has found that the richest 20 per cent now earn around five times as much as those in the bottom 20 per cent.
"Whilst we are nowhere near yet where, for example, the United States is in terms of the divide in the community, we are clearly heading in the wrong direction," said Dr Cassandra Goldie, the chief executive of the Australian Council of Social Service, which published the report.
"We've had a big trend here in terms of disproportionate growth of income by people at the top end compared to those at the bottom."
The ACOSS report, titled A Nation Divided, finds that, when compared to the OECD (Organisation for Economic Co-operation and Development), inequality in Australia is higher than the average.
While strong employment growth over the last few decades has seen real wages go up, on average, by 50 per cent, most of that has gone to the top 10 per cent.

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Audio: Income inequality gap grows over the last 20 years: ACOSS (AM)

The report finds that group of people saw their pay packets rise 72 per cent.
That is compared to a 16 per cent rise for the bottom 10 per cent.
"We are seeing here a significant real growth in the overall income for people at the top at the expense of people on the bottom," said Dr Goldie.
"This is a problem both socially but also, importantly, economically as the IMF (International Monetary Fund) has alerted us to, with an important report just last week, that if we're serious about economic growth, concentration of income and wealth in the top is bad for the economy.
"Wages growth for people on the bottom has largely been through greater participation in work, working longer hours, but at the top it's been a straight-up increase in pay - so those generous bonuses, very well known in the IT and financing sectors."

Aged, non-English speakers and smaller states poorer

The people most likely to find themselves at the bottom are over the age of 65, non-English speaking or those reliant on government payments.
Those outside the capital cities, and in Tasmania and South Australia, are also likely to be down the bottom.
Dr Goldie said governments right across the country need to focus on inequality as a top concern.
"The first priority is to make sure that people are paying their fair share of tax," she argued.
Dr Goldie has repeated ACOSS's calls for reform of capital gains tax discounts, negative gearing and superannuation tax concessions.
"We have had this significant growth in wealth driven by both increases in property prices and also the investment classes," she explained.
"We know that structures like negative gearing, capital gains arrangements, those superannuation tax concessions, the tax loopholes that enable people to structure their financial arrangements at the higher end to minimise their effective tax into the general revenue, is a big problem for us."