• October 29, 2014
• Written by: Kaye Lee

We sure do things upside down downunder.

Tony Abbott’s chief business adviser first tells us we are unprepared for global cooling, followed by lashing out at the UN response to the Ebola outbreak and labelling the world body a “refuge of anti-western authoritarians bent on achieving one-world government”.

Newman wrote an opinion piece for the Australian newspaper in which he said the UN’s “leanings are predominantly socialist and antipathetical to the future security and prosperity of the west”.

“The philosophy of the UN is basically anti-capitalist,” he writes. “Countries that pay the most dues, mostly rich Anglo countries, are those to which the world body shows the greatest disdain.”

Is he suggesting that we should receive foreign aid in thanks for using up all of the world’s resources while killing the planet?

Aside from Maurice Newman’s bizarre ravings, our inaction on climate change, our inadequate response to the Ebola crisis, the chief executive of Whitehaven Coal telling us that coal “may well be the only energy source” that can address man-made climate change, and the sheer bastardry of cutting real wages and entitlements to defence personnel as we send them off to war…..we are also ignoring the call from the rest of the world to take action to address income inequality.

Despite being one of the richest nations on earth, one in seven Australians are living in poverty.  Thirty per cent of Australians who receive social security payments live below the poverty line, including 55 per cent of those on unemployment benefits. Fifteen per cent of aged pensioners live in poverty.

So it seems unfathomable as to why these people would be targeted when the government is looking for savings.

Since 1980, the richest 1 percent increased their share of income in 24 out of 26 countries for which the IMF have data.

In the US, the share of income taken home by the top one percent more than doubled since the 1980s, returning to where it was on the eve of the Great Depression. In the UK, France, and Germany, the share of private capital in national income is now back to levels last seen almost a century ago.

The 85 richest people in the world, who could fit into a single London double-decker, control as much wealth as the poorest half of the global population– that is 3.5 billion people.

With facts like these, it is no wonder that rising inequality has risen to the top of the agenda—not only among groups normally focused on social justice, but also increasingly among politicians, central bankers, and business leaders.

Our politicians are telling us that they want to provide the opportunity for each person to be their best selves but the reality is that we do not have equal opportunity. Money will always buy better-quality education and health care, for example. But due to current levels of inequality, too many people in too many countries have only the most basic access to these services, if at all. Fundamentally, excessive inequality makes capitalism less inclusive. It hinders people from participating fully and developing their potential.

Disparity also brings division. The principles of solidarity and reciprocity that bind societies together are more likely to erode in excessively unequal societies. History also teaches us that democracy begins to fray at the edges once political battles separate the haves against the have-nots.

A greater concentration of wealth could—if unchecked—even undermine the principles of meritocracy and democracy. It could undermine the principle of equal rights proclaimed in the 1948 Universal Declaration of Human Rights.

Redistributive policies always produce winners and losers. Yet if we want capitalism to do its job—enabling as many people as possible to participate and benefit from the economy—then it needs to be more inclusive. That means addressing extreme income disparity.

One way to address this is through a progressive tax system but instead, our government is looking at regressive measures like increasing the fuel excise and the GST. These will impact far more greatly on low income earners.

Another avenue is to expand access to education and health but instead, our government is cutting needs-based education funding, making the cost of tertiary education prohibitive, and introducing a co-payment to discourage people from seeing the doctor.

Abbott, Hockey and Cormann assure us that if we make the rich richer we will all benefit. Everyone from the Pope to Rupert Murdoch knows this is rubbish.

Two weeks ago In Washington, in a speech to the world’s most powerful finance ministers and central bankers, Rupert Murdoch accused them of making policies to benefit the super rich.

In it, he blamed the leaders for increasing inequality, said the ladder of generational progress was now at risk, and warned that a moment of great global reckoning had arrived.

I note that his criticism of poor policy does not stop him from taking advantage of said policies. “I’ll only be as good as you make me be” seems to be the prevailing principle.

Hockey’s response to Murdoch’s barrage was interesting.

“Certainly, as he says, loose monetary policy has helped people who own a lot of assets to become richer, and that’s why loose monetary policy needs to be reversed over time, and we’ll get back to normal levels of monetary policy, normal levels of interest rates,” Mr Hockey told AM’s presenter Chris Uhlmann.

“Governments, on the other hand, have also run out of money and can’t keep spending money – particularly on the credit card – to try and stimulate growth.

“So, if loose monetary policy is not available and actually makes the rich get richer, and governments have run out of money, how are we going to get growth going in the world economy over the next few years? And the only way to do it is through structural changes that make us better at what we do.”

The structural changes suggested by Mr Hockey will increase inequality and send more people into poverty which is indeed what Coalition governments are good at doing.

Pope Francis recently tweeted “Inequality is the root of social evil.”

In last autumn’s essay, Evangelii Gaudium, Francis wrote that: “Just as the commandment ‘Thou shalt not kill’ sets a clear limit in order to safeguard the value of human life, today we also have to say ‘Thou shalt not’ to an economy of exclusion and inequality. Such an economy kills … Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalised: without work, without possibilities, without any means of escape. Human beings are themselves considered consumer goods to be used and then discarded.”

The claim that human beings have an intrinsic value in themselves, irrespective of their usefulness to other people, is one that unites Christianity and socialism. But if you think the market is the real world, it makes no sense at all, since in the market, value is simply the outcome of supply and demand.

A recent article by Lissa Johnson discusses decades of research into political psychology.

“Another ubiquitous finding is that conservatism is inversely related to the pursuit of social and economic equality. Conservatism correlates strongly with a preference for fixed social hierarchies entailing inequality between social groups, along with punitive attitudes towards marginalised and/or non-conforming members of society, who are seen as destabilising elements that threaten social cohesion.”

Australia is indeed a wondrous place where coal will save us from climate change, where helping the rich to get richer will make us all happier, and where the poor will be asked to pay off the nation’s debt.