Share of wealth held by Australia's poorest falls by almost 30% since 2004
The wealth held by Australia's bottom 40% has declined by almost a third in two decades while 3.3m live below the poverty line, a damning report into Australia's track record on quality of life shows.
Monash University's third Transforming Australia report, released Thursday, shows progress on more than half of the 80 indicators has stalled or is in freefall, painting a deteriorating picture of the country's social, economic and environmental wellbeing.
Without a change of course, including a focus on long-term policymaking beyond the three-year federal election cycle, Australia will continue to lag behind the developed world, the report warns.
The report, which uses long-term data sources to analyse Australia's development over the years, found inequalities across wealth, housing, health, and education were worsening.
More than three million Australians, or 12.7%, lived below the poverty line, according to 2020 data, putting Australia above the OECD average of 12.1% and peer countries, such as Canada (8.6%), and the UK (11.2%).
Australia's ratings worsened in both wealth and income inequality. The share of the nation's wealth held by the bottom 40% of society declined by almost a third since 2004 from 7.8% to around 5.5% in 2020.
The report's analysis showed almost 24% of the nation's wealth was held by the top 1% of the population's income-earners while the top 10% had 57% of the nation's wealth.
Australia fared better than some countries, such as the US, where 34.9% of the nation's wealth was held by the top 1% and 70.7% by the top 10%.
The report's lead researcher, Cameron Allen, said the accumulation of wealth had happened slowly over the 16 years from 2004-2020 but was evident in the long-term data.
'If you have widening disparities between education outcomes of rich and poor students, for example, then over time, that leads to entrenched disadvantage, and ultimately lower incomes and wealth inequality,' he told Guardian Australia.
'You can see what happens when you don't take action to address inequalities over time – that can lead to a lack of trust, a lack of social cohesion, and ultimately, polarisation.'
Levels of mathematics proficiency between students from low and high socio-economic backgrounds declined 25% since 2018 and 34% since 2000. The trend places Australia below the US, the UK and Germany.
The report notes the country's positive standings in some areas, including life expectancy, superannuation gender gaps, share of renewable energy, government net debt and low homicide rates.
The report estimates that on current projections Australia will achieve only 55% of progress by 2050 on the sustainable development goals adopted by United Nations members in 2015. The goals are broadly defined as an end to poverty, protection of the planet, and peace and prosperity by 2030.
But increased public expenditure and accountability mechanisms will be needed to achieve 80% of progress towards these goals by 2030, and 90% by 2050, the report recommends.
The report recommends a 7% increase in annual expenditure to 2030, financed through tax reforms, to boost investment in health, education, adaptation and resilience.
Social transfers toward lower-income groups could halve the poverty rate and reduce income inequality by 30% by 2050, the modelling suggested.
Allen said other measures, such as introducing a future generations commissioner to consult with governments on long-term planning and legislating targets, could focus politicians beyond the length of their terms.
Increasing political terms beyond three years could also turn the trend on short-term policy-making, he added.
'One of the problems at the federal level is that our election cycle is particularly short. It's only three years so it barely gives elected officials time to implement things before they're already in election mode again,' Allen said.
'Ultimately, we need to look at other mechanisms to incentivise policymakers to think long-term. There's not many incentives at the moment to do that.'
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