The Inequality at the Heart of our Politics

If we are to reduce the level of entrenched disadvantage in Australia, we need to change priorities within government, and confront the fundamental inequality that places the voices of communities, charities and broader civil society at the bottom of the political influence pile, writes CCA CEO David Crosbie, in Pro Bono News, 30 August 2018.

The Inequality at the Heart of Our Politics, Pro Bono News, 30 August 2018

One of the core roles of many charities is to address underlying inequality, to create opportunities where none exist, to encourage participation where isolation dominates, to break cycles of poverty and disadvantage, to build compassion and understanding so that we share in the success of our neighbours rather than seeing them as a threat.

This week the departing chairman of the Productivity Commission, Peter Harris addressed the National Press Club about inequality in Australia. He was joined by Commissioner Jonathan Coppel to discuss their new report: Rising Inequality? A Stocktake of the Evidence.

There are many important findings in this report about income inequality, wealth inequality, and mobility between income and wealth levels throughout our lifetimes. In analysing all the data, working methodically through all the indicators, considering what really mattered and what it all meant, Commissioner Coppel concluded his presentation to the National Press Club with the following sentences:

“Another way of summing it up is that many Australians experience economic disadvantage at some stage in their lives, but for most of us, it is temporary.

“For this group, sustained economic growth and reliable access to employment will continue to be the source of new opportunities.

“But another group of Australians experience entrenched economic disadvantage; they are stuck at the bottom end of the mobility ladder.”

Commission chairman Harris took a slightly different tack, but arrived at a similar point in his summation:

“But if there is one lesson for the future out of our analysis of inequality, it is this: despite 27 years of uninterrupted economic growth, and unemployment stabilising at a notably lower level (generally starting with a five and not a seven or an eight), and significant investment in redistribution of income via Family Tax Benefit and child care assistance in the 2000s, and a boost to indexation of the age pension late in that decade, we still have 9 to 10 per cent of Australians living on very low incomes.”  

It has varied a bit throughout that period but today, for 2 million or so people, we are where we were 30 years ago.

It is not the same 2 million, as the mobility data shows. But the proportion of our society apparently doing very poorly should have reduced over that 30 years.

Harris suggested that we need to target entrenched disadvantage, not just because we should, not just to enhance productivity, but because it is a better policy approach than simply shifting money around and doing more of the same.

It is good to see the Productivity Commission championing this cause which is so important to so many charities. If only that were enough.

The charities sector knows all too well the structural barriers in trying to work with governments to address entrenched disadvantage: short term over prescriptive siloed funding models that stifle innovation; ill-considered one-dimensional interventions informed by activity driven metrics; a single purchaser driven distorted market approach that fosters competition without any measures of effectiveness; an unwillingness to accept risk as part of moving forward; and a failure to provide the time, tools or capacity for proper engagement, development, implementation and evaluation.

The Productivity Commission itself has identified many of these issues in recent reports and made recommendations about how they can be addressed within government. Their reports should be compulsory reading for all government officials in areas like Human Services. Unfortunately, this is not the case.

There is one area of inequality that I think the Productivity Commission might have underplayed. As Wilkinson and Pickett argued so persuasively in their book The Spirit Level: “Human beings have deep-seated psychological responses to inequality and social hierarchy.… Inequality colours our social perceptions … which affect the way we relate to and treat each other.… A growing body of research shows that inequality damages the social fabric of the whole society.”

As our government self-destructed last week, there were many reports questioning whose interests our nation’s leaders serve. Alex Turnbull had no doubts about why some chose to bring his father down. He talked about financial interests that stood to make huge windfalls if coal-based assets were given favourable treatment and suggested to Fairfax Media; those interests “have their hooks into the Liberal Party … which has no money”, Turnbull said, adding that returns could be “100 to one” if policies fall investors’ way.

For me, this underlines the sense of inequality that is tearing down trust in our institutions, our governments, our politicians, and feeding disenchantment. We do not have an equal say in the running of our country.

Would anyone argue that all Australians have the same influence over national policy as Gina Rinehart? Is it a level playing field? Can any of us fly the foreign minister and deputy prime  minister to India for a private wedding involving very rich coal miners and key political leaders?

It is not just the coal and other fossil fuel industry interests that exert undue influence. There are many others like; the gambling industry, alcohol producers, pharmaceutical interests, food and grocery companies, international media tycoons, all exerting significant influence to protect and enhance their economic interests. Policy making is often more about influence than evidence.

If we are to take up the challenge offered by the Productivity Commission to reduce the level of entrenched disadvantage, we will need to change priorities within government, and confront the fundamental inequality that places the voices of individuals, communities, charities and broader civil society at the bottom of the political influence pile.

If we are to free up the “sticky bottom end of the mobility ladder”, we must first become much stronger advocates for policies and practices that strengthen our communities. Allowing vested economic interests to continue to dominate our politics is not going to build the kind of Australia we want to live in.

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