The paper’s rhetoric is unsupportable. It warns of a return to a 19th century minimal state, for example, but this is absurd when the federal government is spending $87 billion on welfare payments. The level of net cash transfers made by the government to the poorest 30% of the population is higher in Australia than in Japan, the USA, Italy, the Netherlands, Germany, Denmark or even Sweden.
The paper attempts to discredit a recent claim by the Prime Minister that low income households have enjoyed the strongest growth in private incomes in recent years, yet the PM’s claim is valid. Those defined by the ABS as ‘low’ income earners have seen their private incomes rise much faster than any of the higher income groups.
The report claims there has been a ‘very significant shift to greater inequality’ of disposable (post-tax, post-welfare) incomes, but this is contradicted by the ABS which says the slight increase in inequality picked up in surveys since the mid 1990s is not statistically significant.
According to the ABS, inequalities of disposable incomes have actually been shrinking in the years since 2000, for those at the lower end of the income distribution have been registering the largest gains. The St Vincent de Paul paper makes no mention of this, however.
A fair review of the evidence would conclude that, since the mid 1990s (a) all sectors of the population have benefited from rising living standards; (b) gross incomes, before tax and welfare benefits, have risen particularly fast at the lower end of the income distribution; and (c) average net disposable incomes may have risen a bit faster at the middle and top of the income distribution than near the bottom, but this trend seems to have reversed recently.
The St Vincent de Paul report reflects an unthinking, egalitarian political agenda which is never questioned, explained or justified. It fails to understand that inequality is not always unfair and that equalisation of incomes can be very unjust. The report also reflects the anti-market, anti-capitalist ideology which has characterised much of the output produced by the St Vincent de Paul Society’s research arm since 2002.
Professor Peter Saunders is Social Research Director at The Centre for Independent Studies.