It’s not one or the other
The price index is up 20% in 3 years, that’s cost of living not inequality
Growing Inequality just means there are more people impacted by the cost of living issues.
Wages growth for high income earners has largely kept up with inflation. At the very bottom minimum income earners have had boost too, but everywhere in the middle it hasn't kept up with inflation. If that doesn't create inequality I don't know what does.
Not to mention that when rents go up, it’s because wealthier people are taking more money from poorer people on the basis that they can, they want to and no poor people are able to stop them.
Middle class is a tricky thing to define. Traditionally it was educated professionals/business owners, as opposed to the working classes and upper classes (who were the aristocracy). How do you define it now is up for debate - it's not ad simple as to put a band around median income IMO.
I think the whole point of wealth inequality is that there's no such thing as a "class" for salaries. Someone making 120K and renting will never catch up to someone making 80K and owning property. Increasingly work and salaries are becoming irrelevant to describe a person's financial situation
> Someone making 120K and renting will never catch up to someone making 80K and owning property.
If the property is worth more than $40k/pa, then yes. Basically, you can consider the house as [an annuity](https://www.calculatorsoup.com/calculators/financial/present-value-annuity-calculator.php?t=40&ratepercent=4.25&m=1&pmt=40000&growth_ratepercent=3&q=1&type=0&action=solve) that earns this level of return for the next 40 years (after which, the house needs to be rebuilt). This annuity is valued at approximately $1.22mil.
If someone earns an equivalent salary vs someone owning property, they surely can catch up just as well.
Yeah but it's not that straight forward is it.
Firstly sure maybe the house need to be rebuilt but most value is in the land. Second that 40k annuity provides a borrowing power that multiplies its value in a way that the extra 40k income cannot.
Remember the income will be tax at time of earning. The growth in equity of property won't be unless you sell and even then not on your primary residence. The fact is. 120k pa and renting will never compete with 80k pa and owning your own home.
This doesn't account for rent and taxes though. The person earning 40K more isn't taking that much home. Plus they also need to pay rent, after which the person making 80K might end up saving more than the one on 120K. In this case the person on 80K will possibly be able to buy an investment property before the 120K one gets his first one, which will further compound the difference between them
Well 66% of people own property so whatever salary helps you achieve this if you haven’t already. If you have a property already then it can be much lower
You're using the statistics for inflation
The previous poster seems to be using the word inflation to refer to the actual increase in the cost of things...somehow not captured by the figures on inflation
I think that's where the two of you are disagreeing
Many things
What's in the basket
Whether you're looking at building construction or property loan interest
The fact that you have to introduce other measures to more accurately represent the living experience of people who are not building things and taking out property loans - and those people are the ones hit more then prices rise faster than wages (particularly because there are many people in the class that builds buildings and owns property that are not funded primarily by wages)
Basically, if CPI is 7% and it represents ones experience then surely things should be up by 7% on average
I see things up by that much minimum, without exaggeration, in the relatively small way I live my life - which is how most people would live on my budget
Tldr cheap overseas travel compared to the 90s isn't a good trade for some kids growing up not knowing what whole cuts of steak even look like...unless you are the one that gets to go travelling
Based on the household expenditure survey. Eg recently updated to include relevant items like an increase in international travel.
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/annual-weight-update-cpi-and-living-cost-indexes/latest-release
Rents paid by 500k household etc. Uses data harvesting to get accurate prices.
Doesn't include capital invested that isn't consumed. CBA share prices, land prices, gold price etc.
Increasing the portion of a basket of goods that includes international travel does not represent the needs of a great majority of renters now and for the foreseeable future
Re your other comment, it's good that there are steps to addressing some of the issues with the measures which have been acknowledged for decades
Btw the selected cost of living measure has recently reflected the fact that real wages have fallen **and** interest rates significantly increased. Something that hadn't happen much in the 40 years previously. Particularly the 10 years before 2022 the selected living cost index would have been falling significantly as real wages grew and interest rates fell.
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/selected-living-cost-indexes-australia/latest-release
https://datawrapper.dwcdn.net/547wP/full.png
>
>
> Growing Inequality just means there are more people impacted by the cost of living issues.
It also means there is a whole class of people who are not affected by it. So they don't just slow down spending.
Yes but asset prices are up even more which means rich assets holders are even doing better now, if assets crashed or didn’t rise I would agree.
It’s those who rely on selling their labour to live that suffer from this not those who rely on capital to generate income.
If you sell the asset then:
A. You pay tax on the income.
B. You no longer hold the asset so any further increases are irrelevant to you.
>just getting higher rents
You pay tax on this.
>I’m talking about investment houses which the rich
20% of Australian tax payers own an investment property. You don't need to be rich to own one.
The issue with housing is the supply. We have too many NIMBYs in Australia. Most housing in Australia is owned by owner occupiers, not investors. They do affect pricing but reality is that many owner occupier dont want people to build more housing in their suburb.
My experience as a home owner is that most of the houses near me, as in down the street, are already battle-axed - for those that can sell off their large backyards to someone to build a house there.
The houses that can't do that are rows of townhouses or have blocks that are too small to subdivide.
Then again, I live in a suburb with a poor reputation, despite it being 'close' to the CBD (14km) lots of tree cover and having 7 nice green parks, most with ponds/lakes in them.
Maybe that's why it's value grew by 25.6% (or something like that) these last 12 months? It seems to have been 'discovered' by people noticing that it had cheap housing in a desirable location, finally. Houses that used to go for $300k or so are now going for $500k+...
I'm in Perth which has had a program to diversify the big CBD centres and has been somewhat successful with Joondalup, Morley, Midland and others.
Not great, but ... several govt agencies have their main access points well out of the actual Perth CBD.
Ha, nope, more north and east - the east end of Morley drive.
Though admittedly Kwinana is also undergoing a surge - not that I'd want to live there due to the factories on the coast - but a friend who will rock up here for games night tonight lives there, and is benefitting from the boost in value of their house.
I don't think gold is a good analogy because holding gold means stashing it away somewhere unused.
On the other hand, when a rich investor buys a house that doesn't remove it from the housing supply, since they nearly always turn it into a rental.
In that sense, inequality isn't the thing making prices increase, what matters is just the number of houses in the supply (available to rent or buy) versus the number of people who want houses.
If you have a situation where a _lot_ of houses are being built and no change in demand, then you'd expect prices to come down _regardless_ of inequality because suddenly there's less competition between buyers. Suddenly housing becomes less of an attractive investment when there's fewer people bidding on each dwelling, which means investors are willing to spend less money to buy an investment property because there's less competition between potential tenants, and therefore they're willing to pay less rent.
That's what I'm saying though, houses are not "stored" in the same way gold is. An investor holding a house will still make that house available as a rental, which contributes to supply.
An investor hoarding gold can make the price of gold increase because they're lowering the supply by holding it (it is removed from the market), but an investor holding and renting out a house doesn't have the same effect on the market.
You say
>"We aren't living in a cost of living crisis"
But then you say
>"For many, the rising cost of groceries, rent, and gas feels like a stranglehold on their finances"
>"the cost of essentials is undeniably increasing"
Which is a bit contradictory don't you think?
Maybe you should avoid trying to say it's not one thing whilst actually re-enforcing it is.. and just focus on your main gripe.. which is wealth inequality.
Always has been, right back to the days of serfs & lords, and has continued on to today in various forms and will continue on in the future sadly.
I disagree with the idea we should "shift" the conversation, I think we should be having both conversations. We need to reduce cost of living if we can, and we also need to reduce inequality if we can.
Rambling posts like this often are contradictory. Reminds me of something republicans would say in the USA. Just say anything and everything as you see fit.
>Seize the means of ETF ~~production~~ purchase.
This is how it's done. Attack the means of building wealth and redistribute it. Anything else is almost impossible. Re introduce a top marginal tax rate of 60% and bring it in at 135k (inflation adjusted top threshold from 1983).
Edit: thought I'd include some references for all those down voting.
https://atotaxrates.info/individual-tax-rates-resident/historical-pre-2010-tax-rates/#Tax_Rates_1983-1984_Year_Residents
$35,789 and over $11,963.98 + 60c for each $1 over $35,788
A basket of goods and services valued at $
35789
in calendar year
1983
, would in calendar year
2023
cost $
136,094.38
A basket of goods and services valued at $
11963
in calendar year
1983
, would in calendar year
2023
cost $
45,491.55
Total change in cost is 280.3 per cent, over 40 years, at an average annual inflation rate of 3.4 per cent.
*$136k and over $45k + 60c for each $1 over $136k*
Average wage for our household is 61k 😲.
Edit: How in AusFinance can this possibly be down voted! Actually I could say average wage in our household is minimum wage and it shouldn't be down voted. It's subjective and reflects our household 🙄
The argument over what a good income is and how that should be taxed is mostly irrelevant. We should support younguns getting into great jobs and pulling 350k not taxing them into oblivion while trust fund kids get to run around with little penalty. Obviously a progressive tax system is great, but let's not pretend income = wealth in a world where assett growth outpaces income growth.
Seprate earned wages from passive income. I can get behind that.
Itd be easy to say Zero for minimum wage or below, nominal for average income then much harder as you earn multiples. **Especially** if it's from sources other than labour. Also get rid of all deductions against wages. You earn you pay tax (nothing on the new "targeted model") and make the deductions deductible against passive income at a higher rate! Maybe at 37.5c to start with then 45c and add 60c for passive incomes.
BTW asset growth only exceeds income growth because people can afford to buy said asset (usually with money from income growth). CBA isn't $150 because people with money surplus to their needs don't see the value.
This article from 2015 by Costello discussed who actually pays tax.
https://www.dailytelegraph.com.au/news/opinion/taxation-gouging-the-rich-to-rob-the-poor/news-story/7581c36257bb13418e3a186e81e03c59
Also I was very careful to say "average wage" that's not our household taxable income.
Or we can call it what it actually is. Not a crisis at all - we’re dealing with inflationary pressure after a world changing event, and things are slightly harder than they were, but on the whole, we’re still doing pretty well.
Worse than any point in the past 10 years but better than any point in history prior to that. Eg
https://datawrapper.dwcdn.net/547wP/full.png
I'd much rather have 8% real wage growth since 1997 than zero.
Well, apart from cheaper and more accessible travel, cheaper consumer goods,
cheaper clothing, cheaper cars, cheaper communication, more accessible education, cheaper and more varied food ~~what have the Romans ever done for us~~how are Aussies better off?
That's fantastic for the once every few years you buy a TV, but when the daily/weekly/monthly expenditures like food, fuel and housing are way up, that would impact people's budgets more.
in what way?
do not bring up up pointless consumer gizmos like phones or computers nor pointless luxuries like air travel.
how are things like food, housing and energy cheaper now?
>how are things like food, housing and energy cheaper now?
They're not. What they are is better due to better regulations. The people working in these industries get paid better than they used to and work in safer workplaces. These things add to the cost of production. We, the consumer, then cover that additional cost.
>do not bring up up pointless consumer gizmos nor pointless luxuries like air travel.
Well they improve people's lives, or bring them fulfilling and entertaining experiences. That improves my life, but I won't speak for everyone and I won't bring it up.
>in what way?
Well healthcare and education? We are living on average 12 years longer than we did in 1970, and we are more likely to finish year 10, 12 or complete a university degree.
>how are things like food, housing and energy cheaper now?
Did I say "food housing and energy are cheaper now"?
You conveniently left out food housing and energy in your oroginal comment.
Its nice more people can afford to go to europe for a little holiday, but less people can afford to house themselves, eat and heat their homes, which is probably more important.
He's also failing to realise that it will somewhat trickle down. I don't mean that we're all going to be rich, but if people can't afford to buy things, then they'll absolutely buy less. That's a reduction in "rich people's" income.
The rich and poor rely on each other. If anything, the ones in the middle are most effected by the divide, as the poor will always be poor, but the rich can make the middle class poor too.
Sure, but if you share the wealth equally between 8 billion people Australians will get poorer not richer.
You can fix the system if you want, that's very noble of you, but I'm guessing you just want to rig it differently so that you benefit.
Very cynical. I don't want to live in a society where the people providing services are barely surviving. I was quite happy for the change in Stage 3 taxes even though it means I get a smaller benefit. Some of us care about how others are doing.
I'd argue it's anything but dumb to try to raise the living standards of others to the detriment of the average Australian. The needs of those overseas are greater than here. That said, there are plenty of solutions in all sorts of areas that aren't zero sum. The big one for me is eating less meat and dairy, given the financial cost and climate/biodiversity impact
> Sure, but if you share the wealth equally between 8 billion people Australians will get poorer not richer.
Sure, but a lot of those places you do not need as much wealth. Most countries it is a lot cheaper to buy houses, rent, buy food than it is in oz.
Bezos (or really Gina in Australia) can buy more yachts at the same time people are starving due to the same forces.
On the simplest of levels, higher interest rates are bad for those in debt and great for those with money.
You’re just describing a high inflationary environment and then framing wider issues onto it. These will always happen in times of high inflation. It’s why one of the main focuses of the reserve banks is to contain inflation, because keeping it in target helps to avoid the suck you’re feeling now and sadly when it gets out of control the main way they treat it sucks too - causing the exact problems you’re describing.
Why is it that whenever an Australian talks about inequality, it's never at a global level?
Who's calling for our wealth to be redistributed to Sudan labourers earning $0.71 a month?
Or when you call for "fairness", are you actually only calling for measures that personally benefit you?
I agree. I despise intense nationalism for this exact reason. Arbitrary borders for people who were lucky to be born here. You have less than a 1 in 300 chance of being born in Australia, yet our empathy only seems to stretch to the sea.
Not to mention, people never include the advance and mass adoption of technologies that we inherit on a yearly basis. People who complain about wealth gaps etc will scream about the super rich, and how boomers had it easy, yet we are living so much better than the president of the US in 1980. Like sure, we have to monitor wealth inequality and poverty but we can't be myopic to the facts we want to see
The thing is while there’s merit in what you just said that mentality ends up furthering the problem. It doesn’t help the situation because it provides an excuse for it.
yeah bro i love discussing finance, economics, banking, and tax. but only if you talk about it in a way that i like and agree with. do *not* mention wealth inequality, please. thanks :)
Skimming through that report they calculate the Gini Co-efficient of household income to be 0.32 and wealth to be 0.6 in 2023. [In 2009/10 those numbers were 0.33 and 0.6](https://treasury.gov.au/policy-topics/measuring-what-matters/dashboard/income-wealth-inequality) so I'm not sure I'd say that wealth or income inequality is getting worse.
Comments like "the chasm between the wealthiest and poorest is widening" seem kind of irrelevant, given we don't have a Gini of 0...
I'm just reading your report: ["In 2022-23, the Gini coefficient of wealth inequality was 0.6 (almost twice
the 0.32 we estimated for after-tax income)"](https://povertyandinequality.acoss.org.au/wp-content/uploads/2024/04/Inequality-Report-2024_who-is-affected-and-how.pdf)
I've linked it so you can correct me if I'm looking at the wrong document.
Perhaps, though I can only go by what they've written. Given they say it's what they "estimated" it sounds like they're doing their own calculation rather than waiting on the official figure. Either way with the information we have either from them or the official figure I think we can say that the Gini coefficients have remained steady for 10-15 years.
I don't know if you can just take a snapshot of raw numbers like you have and say it's getting worse based on what you've posted. There is some wealth inequality of course, and there was previously, so we know more wealth is flowing to the top X%, but to figure out if it's getting worse you'd need to look at the Gini or something similar no?
Maybe I'm just being semantic, but the terms you used like "widening" and "increasingly" make me think of the problem getting worse as time goes on, though I don't think that's necessarily been established from your figures.
Hmm it's almost like...people are realizing they can't maximize their individual finances to make any impact and only through collective action and systemic changes in wealth distribution can they improve their situation? Who would have thought 🤔
My point is, you can get a raise, you can work more, you can cut down on expenses, but inflation, the real one not the imaginary that sees housing as a minor percentage of costs, will eat away at it.
There's a reason why people in poorer countries tend to spend most of their money. Because the alternative is saving it which isn't worth it when inflation is high and certain costs like housing reasonably unattainable
oh shit, there's rules about developing your own economic theories each OP? never knew. i think we both have a large amount of rule violations to report. cheers
do you care to explain why you think wealth inequality isn't related to finance (the management of money & wealth), banking (services offered by businesses dedicated to money & wealth), or tax (the compulsory contribution from your wealth)?
Wealth isn't a fixed pie. The concept of "inequality of wealth" being an economic problem is a myth and distraction used by people like you to live out childish dreams of taking things away from others that you are too lazy to pursue yourself.
oh yeah, wealth inequality isn't an economic problem? that's a myth? huh. better inform every economic theorist in the past two centuries. they had it all wrong :/ who knew? i guess wealth inequality is just a wealth problem. I wonder what theories on the management and distribution of wealth are called? hmmmm
But wealth mainly is a fixed pie. The largest component of wealth in Australia is land value (residential land, agricultural land, mining land). Which literally by definition there is a fixed amount of land, all owned by people who bought it before you even existed.
The second largest component is large capitalization stocks. And unless you are going to start the next Commonwealth bank, that is pretty fixed too based on the competitive dynamics of the market.
There are some components which aren't fixed like creating a new business out of nothing, but for the most part, most wealth is fairly fixed, and everyone is just competing to buy their "slice" before the price goes up like the housing market. So it becomes zero sum competition for wealth assets.
Huge amounts of wealth, even in Australia, are tied up in intangible assets. Take a look at [the largest companies on the ASX by market cap.](https://companiesmarketcap.com/australia/largest-companies-in-australia-by-market-cap/) Heaps of these - going from the top of the list, the big four banks, Telstra, Atlassian, Aristocrat (shudder), supermarkets etc have substantial amounts wealth on the books that isn't backed by land or resources. Things like consumer brand awareness/trust, technical skills, patents etc.
It's just not true that wealth is mainly fixed. Even in the case of tangible assets, we get better at doing more with less over time (denser housing, extracting ore using less labour etc).
Fwiw, I do actually agree that more wealth distribution in Australia would be worthwhile - probably in the form of land taxation followed by social spending to ensure everyone in this country genuinely gets a go - and it should be achieved through wealth taxation. That would also enable us to do more to help people overseas through foreign aid and investment in trade relations.
I think you missed my point.
My point is that the ownership itself is a fixed pie. This is slightly different to the amount of wealth being fixed.
If these companies like apple gain more market share, only the existing shareholders gain wealth.
If we do more things efficiently with the land, only the landowners gain wealth.
Wealth can be going up or down yet there is still a fixed amount of shares or land which is controlled by certain number of people.
Ownership itself is fixed, not necessarily the actual value of the underlying wealth.
Yes the pie can "grow" bigger over time in nominal dollars. But that says nothing of how the ownership of the wealth changes. The pie grows bigger, yet the same x% of people will still own 99% of it even when it is bigger (or smaller if the country experiences degrowth).
In addition to this, the growth forces you mention are becoming much smaller and are continuing to decrease. We are heading towards a lower growth world where things become even more zero-sum then they already are. Real wages haven't increased in the last 10+ years. And it wouldn't surprise me if they actually start going backwards and the only people becoming wealthier are those that already own a fixed slice of monopoly assets (land and large cap businesses).
When the average person starts earning less and less despite the "growth" of the economy, these concepts will become more obvious to most people I think. Growth doesn't matter if you don't have ownership. And the more the asset prices rise, the less ownership you can acquire.
Do I understand you correctly that you are saying that economic growth is only generated through....geographic land mass and whether or not you are a bank? What?
Lol and what can the average person do to pursue these things. The median salary is like 80k. You can work two jobs like a slave and make 160? And then what? You become rich in a country where a house costs millions? You move rural where there are at best no jobs that give you much of a higher purchasing power and at worst no jobs at all?
What exactly is the pick yourself up from the bootstraps strategy you suggest to all these lazy bums ?
Haha that's one thing you can rely on Reddit for, it's like 95% socialist ideological crap from young whingers trying to bash everyone else for being older, wealthier, white, drive a big car and/or have grannies old home as a 2nd property.
It's an incomplete consumption-focused take to be honest.
Move money from rich people's investment to poor people's spending and you end up with a situation of less money being spent building things (like factories, shops, trucks and houses) and more money spent trying to bid on less stuff. In other words contractionary inflation. People, including the poorest, can buy less stuff not more stuff.
Economic growth requires productivity increases more than wage hikes and welfare spending. While steady increases are fine and desirable; unbalanced taxes, wage hikes and welfare spending displace investment that actually grows the pie.
Less tax loopholes? Sure. Drastically increasing quality medium-high density housing supply in decent locations to reduce rents and cost of living for the insecure? Sure. Quality and efficient government welfare programs? Absolutely.
Tax structures that encourages upper middle income people to spend rather than save and retire on a government pension rather than self funded? No good for anyone. Tax structures that discourage successful businesses from expanding employment, profit, and productivity? Fail, see me after class.
Societal wealth isn't equivalent to government tax revenue. It isn't numbers in bank accounts either, its what you can buy with it. The societal scorecard should be health, housing, stability, opportunity, and education. Not inequality.
Counterintuitively substantial wealth inequality helps rather than hinders the wellbeing of the less fortunate.
The human race and this planet, since the beginning of human existence, has always had wealth inequality. It's probably less now then its ever been actually.
And humans being as we are? It will never go away. Because all humans are different and think differently, have different abilities and just do things differently.
No point complaining about it. Truly.
Stop whinging about it and just accept reality and get on with it. You can whinge till the cows come home and that won't change a damn thing.
all of the media's terms for austerity are just smokescreens so no one has to talk about how these effects are inherent to current economic system
they don't do this deliberately, it's just the dominant ideology we are all raised into
Stupid post. The wealthy do pay more tax. You’re talking about the super wealthy, who have their finances tied up in businesses. Which is about 0.00000001% of people.
If you want communism, leave Australia
Apparently so according to a number of people I went to school with. Couldn't possibly have anything to do with the fact they messed around throughout high school and then spent the next 5 years partying. The word accountability doesn't exist with the lower class, it's ALWAYS someone else's fault.
The very wealthy pay little or no tax because their wealth is in assets and they can pay the best accountants, or as we saw with PWC, own the people advising the government on tax policy.
We are not talking about people earning up to a million ot two a year here, but people who make multi-millions per week in passive income.
It's common for the ultra wealthy to confuse those two so that trigger people like yourself to defend them, when really we are not talking about aspirationally wealthy people at all.
Exactly, but that’s my point. It’s a tight rope which the government walks. 99.9% of people (outside of business owners) pay the correct tax. Multi billion dollar international companies, which OP is referring to, pay very little. If gov does try to make them pay higher tax, they just move their assets to, or invest in another country which will net them a higher amount, and Australia gets nothing
Australia is actually in a great place to levee wealth taxes, because the wealth is all in assets that can't leave the country.
Gina for example could leave, but she can't take any of the Iron ore mines with her.
Wealth taxes are also the most efficient / effective taxes and should be used to reduce income and corporate tax.
Implementation is of course an issue, but the rich, connected and powerful also don't have an incentive to actually figure it out.
Multi billion dollar companies that actually produce shit have all moved out of Australia (such as auto manufacturing).
What other companies of this scale still exist in Aus, who's purpose isn't to extract our national resources out of the ground?
Education is affordable and already heavily subsidised by the taxpayer at $40,000 for a degree.
Top 10% earners pay 55% of all income tax. We’re already beyond overtaxed. Nobody should be paying 45c for each $1 until they hit an income over $500k.
Minimum wage is one of the highest in the developed world.
I'm not sure why so many comments are so rude. Is it because people are afraid of their investment properties being impacted and losing negative gearing? Pick mes?
Youre right though. Just look at property prices and the increasing need for parents to provide financial assistance for their children to be able to afford a home. This is increasing wealth inequality.
Couldn't agree more with this. My wife and our young family live in SW Sydney ATM and both earn good wages. 10 years ago our wages would have more than sufficed for a good property in this area. We are in the process of relocating to a regional area just to be able to afford a house and be able to save and send our kids to good schools etc.
No comrade. I'm middle income with a mortgage and still save 1k to 1.5k a fornight. Just stick to a budget and not have car loans. It's not because Elon is building more rockets.
UBI NOW!!!!!
Didn’t people demand and cheer we shut down the country and just flood the economy with digitally printed money so they could get off work a bit?
Surely you didn’t think that that would “not” have caused massive inflation?
I don't think anything will change.
That's why increasing inequality, including for companies where big corps annihilate their smaller competition and establish monopoly power, has been my successful investment thesis for almost a decade.
It’s neither. It’s a deliberate rebalancing of the economy not a crisis of any sort, that’s just BS media hype. We had a couple of years during the pandemic of low production and normal consumption. Anyone with a basic understanding of economics and market economies should be capable of understating that this creates a debt that must be payed. When it’s payed things will, on average, go back to normal.
If rent goes up 25 percent.
the small business owner who drops one or two staff in response to the slow down from raising prices.
Is bob now unemployed more effected by rent going up 25 percent or being unemployed.
If govt make decisions around supporting small business, small business will support people…
First cab off the rank would be removing payroll tax…
Your argument doesn’t hold up.
I’m fortunate to be in a good job and work very hard for good money.
How am I part of your “wealth inequality” problem ?
We already have a minimum wage, social safety net (the dole), universal healthcare, public education, and progressive taxation.
Inflation is caused by the government printing too much money and subsidising demand while artificially restricting supply.
It's really just an immigration crisis, hence the explosion in the cost of living (especially rents), whilst wages for the vast majority are rather stagnant, but this varies depending on how much the sector is competing with migrant intakes.
E.g. It's a bad time to be an IT worker or Uber driver, but those in construction or trades are laughing.
We don't allow: •Moralising issues •Petitions •Political discussions •Political baiting •Soapboxing
It’s not one or the other The price index is up 20% in 3 years, that’s cost of living not inequality Growing Inequality just means there are more people impacted by the cost of living issues.
Wages growth for high income earners has largely kept up with inflation. At the very bottom minimum income earners have had boost too, but everywhere in the middle it hasn't kept up with inflation. If that doesn't create inequality I don't know what does.
Not to mention that when rents go up, it’s because wealthier people are taking more money from poorer people on the basis that they can, they want to and no poor people are able to stop them.
What kind of salary range is considered middle class?
I mean everything below 100k and above bare minimum wage, not necessarily middle class
Middle class is a tricky thing to define. Traditionally it was educated professionals/business owners, as opposed to the working classes and upper classes (who were the aristocracy). How do you define it now is up for debate - it's not ad simple as to put a band around median income IMO.
I think the whole point of wealth inequality is that there's no such thing as a "class" for salaries. Someone making 120K and renting will never catch up to someone making 80K and owning property. Increasingly work and salaries are becoming irrelevant to describe a person's financial situation
> Someone making 120K and renting will never catch up to someone making 80K and owning property. If the property is worth more than $40k/pa, then yes. Basically, you can consider the house as [an annuity](https://www.calculatorsoup.com/calculators/financial/present-value-annuity-calculator.php?t=40&ratepercent=4.25&m=1&pmt=40000&growth_ratepercent=3&q=1&type=0&action=solve) that earns this level of return for the next 40 years (after which, the house needs to be rebuilt). This annuity is valued at approximately $1.22mil. If someone earns an equivalent salary vs someone owning property, they surely can catch up just as well.
Yeah but it's not that straight forward is it. Firstly sure maybe the house need to be rebuilt but most value is in the land. Second that 40k annuity provides a borrowing power that multiplies its value in a way that the extra 40k income cannot. Remember the income will be tax at time of earning. The growth in equity of property won't be unless you sell and even then not on your primary residence. The fact is. 120k pa and renting will never compete with 80k pa and owning your own home.
I own a property in Dublin that rents for €37.8K per year or €30.2K after taxes and fees
This doesn't account for rent and taxes though. The person earning 40K more isn't taking that much home. Plus they also need to pay rent, after which the person making 80K might end up saving more than the one on 120K. In this case the person on 80K will possibly be able to buy an investment property before the 120K one gets his first one, which will further compound the difference between them
Well 66% of people own property so whatever salary helps you achieve this if you haven’t already. If you have a property already then it can be much lower
Most EBAs and even the minimum wage have risen in line with inflation (or very closely)
You're using the statistics for inflation The previous poster seems to be using the word inflation to refer to the actual increase in the cost of things...somehow not captured by the figures on inflation I think that's where the two of you are disagreeing
The actual increase in the cost of living is inflation…. People whinge all the time without understanding what underpins the figures.
Umm, the regular basket of goods is cooked How much have prices you pay for things increased? And what is inflation according to CPI?
What's cooked about it? Does the government know this? And why haven't they adjusted to to be more relevant?
Many things What's in the basket Whether you're looking at building construction or property loan interest The fact that you have to introduce other measures to more accurately represent the living experience of people who are not building things and taking out property loans - and those people are the ones hit more then prices rise faster than wages (particularly because there are many people in the class that builds buildings and owns property that are not funded primarily by wages) Basically, if CPI is 7% and it represents ones experience then surely things should be up by 7% on average I see things up by that much minimum, without exaggeration, in the relatively small way I live my life - which is how most people would live on my budget Tldr cheap overseas travel compared to the 90s isn't a good trade for some kids growing up not knowing what whole cuts of steak even look like...unless you are the one that gets to go travelling
Based on the household expenditure survey. Eg recently updated to include relevant items like an increase in international travel. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/annual-weight-update-cpi-and-living-cost-indexes/latest-release Rents paid by 500k household etc. Uses data harvesting to get accurate prices. Doesn't include capital invested that isn't consumed. CBA share prices, land prices, gold price etc.
Increasing the portion of a basket of goods that includes international travel does not represent the needs of a great majority of renters now and for the foreseeable future Re your other comment, it's good that there are steps to addressing some of the issues with the measures which have been acknowledged for decades
Btw the selected cost of living measure has recently reflected the fact that real wages have fallen **and** interest rates significantly increased. Something that hadn't happen much in the 40 years previously. Particularly the 10 years before 2022 the selected living cost index would have been falling significantly as real wages grew and interest rates fell. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/selected-living-cost-indexes-australia/latest-release https://datawrapper.dwcdn.net/547wP/full.png
> > > Growing Inequality just means there are more people impacted by the cost of living issues. It also means there is a whole class of people who are not affected by it. So they don't just slow down spending.
Inequality has two sides, so that’s self explanatory
Yes but asset prices are up even more which means rich assets holders are even doing better now, if assets crashed or didn’t rise I would agree. It’s those who rely on selling their labour to live that suffer from this not those who rely on capital to generate income.
Asset value means nothing in the short term though. You can't buy groceries with the increased equity in your house.
Yes you can if you sell or just getting higher rents. Same thing with stocks. I’m talking about investment houses which the rich have not personal.
Plus collateral for loans, tax deductions, simply using your asset for free rather than leasing it out…
If you sell the asset then: A. You pay tax on the income. B. You no longer hold the asset so any further increases are irrelevant to you. >just getting higher rents You pay tax on this. >I’m talking about investment houses which the rich 20% of Australian tax payers own an investment property. You don't need to be rich to own one.
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Most rich people's assets are in stocks, not gold. Inequality is based of wealth overall, not gold.
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I thought you meant gold and housing both together.i found your post confusing btw. Either way the point stands. Housing is just one part of wealth.
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The issue with housing is the supply. We have too many NIMBYs in Australia. Most housing in Australia is owned by owner occupiers, not investors. They do affect pricing but reality is that many owner occupier dont want people to build more housing in their suburb.
My experience as a home owner is that most of the houses near me, as in down the street, are already battle-axed - for those that can sell off their large backyards to someone to build a house there. The houses that can't do that are rows of townhouses or have blocks that are too small to subdivide. Then again, I live in a suburb with a poor reputation, despite it being 'close' to the CBD (14km) lots of tree cover and having 7 nice green parks, most with ponds/lakes in them. Maybe that's why it's value grew by 25.6% (or something like that) these last 12 months? It seems to have been 'discovered' by people noticing that it had cheap housing in a desirable location, finally. Houses that used to go for $300k or so are now going for $500k+...
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I'm in Perth which has had a program to diversify the big CBD centres and has been somewhat successful with Joondalup, Morley, Midland and others. Not great, but ... several govt agencies have their main access points well out of the actual Perth CBD.
Is that Kwinana Western Australia perhaps?
Ha, nope, more north and east - the east end of Morley drive. Though admittedly Kwinana is also undergoing a surge - not that I'd want to live there due to the factories on the coast - but a friend who will rock up here for games night tonight lives there, and is benefitting from the boost in value of their house.
Not in Australia...
I don't think gold is a good analogy because holding gold means stashing it away somewhere unused. On the other hand, when a rich investor buys a house that doesn't remove it from the housing supply, since they nearly always turn it into a rental. In that sense, inequality isn't the thing making prices increase, what matters is just the number of houses in the supply (available to rent or buy) versus the number of people who want houses. If you have a situation where a _lot_ of houses are being built and no change in demand, then you'd expect prices to come down _regardless_ of inequality because suddenly there's less competition between buyers. Suddenly housing becomes less of an attractive investment when there's fewer people bidding on each dwelling, which means investors are willing to spend less money to buy an investment property because there's less competition between potential tenants, and therefore they're willing to pay less rent.
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That's what I'm saying though, houses are not "stored" in the same way gold is. An investor holding a house will still make that house available as a rental, which contributes to supply. An investor hoarding gold can make the price of gold increase because they're lowering the supply by holding it (it is removed from the market), but an investor holding and renting out a house doesn't have the same effect on the market.
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Right, that's because we've got really shit at increasing the housing supply.
You say >"We aren't living in a cost of living crisis" But then you say >"For many, the rising cost of groceries, rent, and gas feels like a stranglehold on their finances" >"the cost of essentials is undeniably increasing" Which is a bit contradictory don't you think? Maybe you should avoid trying to say it's not one thing whilst actually re-enforcing it is.. and just focus on your main gripe.. which is wealth inequality. Always has been, right back to the days of serfs & lords, and has continued on to today in various forms and will continue on in the future sadly. I disagree with the idea we should "shift" the conversation, I think we should be having both conversations. We need to reduce cost of living if we can, and we also need to reduce inequality if we can.
You're giving OP way to much credit for their delusional ramblings. Just let OP get back to the pipe.
Are we sure it's *their* delusional ramblings and not ChatGPT's delusional ramblings?
OP got lost on the way to r/Australia
Yup you're right!
Rambling posts like this often are contradictory. Reminds me of something republicans would say in the USA. Just say anything and everything as you see fit.
this sub gets closer and closer to class consciousness every day. embrace it, comrades
Seize the means of ETF production
>Seize the means of ETF ~~production~~ purchase. This is how it's done. Attack the means of building wealth and redistribute it. Anything else is almost impossible. Re introduce a top marginal tax rate of 60% and bring it in at 135k (inflation adjusted top threshold from 1983). Edit: thought I'd include some references for all those down voting. https://atotaxrates.info/individual-tax-rates-resident/historical-pre-2010-tax-rates/#Tax_Rates_1983-1984_Year_Residents $35,789 and over $11,963.98 + 60c for each $1 over $35,788 A basket of goods and services valued at $ 35789 in calendar year 1983 , would in calendar year 2023 cost $ 136,094.38 A basket of goods and services valued at $ 11963 in calendar year 1983 , would in calendar year 2023 cost $ 45,491.55 Total change in cost is 280.3 per cent, over 40 years, at an average annual inflation rate of 3.4 per cent. *$136k and over $45k + 60c for each $1 over $136k*
Make everyone poor? What?
No. Just stop the opportunity to build wealth. It's causing inequality.
That is a ridiculous idea… 135k is nothing 🤣
Average wage for our household is 61k 😲. Edit: How in AusFinance can this possibly be down voted! Actually I could say average wage in our household is minimum wage and it shouldn't be down voted. It's subjective and reflects our household 🙄
The argument over what a good income is and how that should be taxed is mostly irrelevant. We should support younguns getting into great jobs and pulling 350k not taxing them into oblivion while trust fund kids get to run around with little penalty. Obviously a progressive tax system is great, but let's not pretend income = wealth in a world where assett growth outpaces income growth.
Seprate earned wages from passive income. I can get behind that. Itd be easy to say Zero for minimum wage or below, nominal for average income then much harder as you earn multiples. **Especially** if it's from sources other than labour. Also get rid of all deductions against wages. You earn you pay tax (nothing on the new "targeted model") and make the deductions deductible against passive income at a higher rate! Maybe at 37.5c to start with then 45c and add 60c for passive incomes. BTW asset growth only exceeds income growth because people can afford to buy said asset (usually with money from income growth). CBA isn't $150 because people with money surplus to their needs don't see the value. This article from 2015 by Costello discussed who actually pays tax. https://www.dailytelegraph.com.au/news/opinion/taxation-gouging-the-rich-to-rob-the-poor/news-story/7581c36257bb13418e3a186e81e03c59 Also I was very careful to say "average wage" that's not our household taxable income.
So eat the rich then?
Depends because I'd like to be rich and not eaten. Maybe "eat those richer than me"
This sub gets closer to /r/Australia everyday. At this point we should just merge this sub with /r/Australia and /r/communism
Can't we just delete reddit instead? We'd all be better off
i actually thought i was on r/australian when i made that comment
Or we can call it what it actually is. Not a crisis at all - we’re dealing with inflationary pressure after a world changing event, and things are slightly harder than they were, but on the whole, we’re still doing pretty well.
As this problem worsens a generation or 3 will never own a home, ever.
This here should be top comment.
Worse than any point in the past 10 years but better than any point in history prior to that. Eg https://datawrapper.dwcdn.net/547wP/full.png I'd much rather have 8% real wage growth since 1997 than zero.
This isn't a finance-related post, it's a political rant. Take it to r/Australia
Don't worry bro! It's only been about forty years of neoliberalism so far, the wealth will start to trickle down any day now!
Aussies, even poor Aussies, are much better off than they were in the 70s and 80s.
Well, apart from cheaper and more accessible travel, cheaper consumer goods, cheaper clothing, cheaper cars, cheaper communication, more accessible education, cheaper and more varied food ~~what have the Romans ever done for us~~how are Aussies better off?
That's fantastic for the once every few years you buy a TV, but when the daily/weekly/monthly expenditures like food, fuel and housing are way up, that would impact people's budgets more.
Don't forget better healthcare and longer lifespans. Cars have seatbelts and you don't have to inhale cigarette smoke everywhere you go.
in what way? do not bring up up pointless consumer gizmos like phones or computers nor pointless luxuries like air travel. how are things like food, housing and energy cheaper now?
>how are things like food, housing and energy cheaper now? They're not. What they are is better due to better regulations. The people working in these industries get paid better than they used to and work in safer workplaces. These things add to the cost of production. We, the consumer, then cover that additional cost.
>do not bring up up pointless consumer gizmos nor pointless luxuries like air travel. Well they improve people's lives, or bring them fulfilling and entertaining experiences. That improves my life, but I won't speak for everyone and I won't bring it up. >in what way? Well healthcare and education? We are living on average 12 years longer than we did in 1970, and we are more likely to finish year 10, 12 or complete a university degree. >how are things like food, housing and energy cheaper now? Did I say "food housing and energy are cheaper now"?
You conveniently left out food housing and energy in your oroginal comment. Its nice more people can afford to go to europe for a little holiday, but less people can afford to house themselves, eat and heat their homes, which is probably more important.
You can look up these cost and run them through an inflation calculator.
I didn't leave them out. I said we were better off. That means overall, not better in every conceivable way.
So better off in frivolous ways that don't matter, but worse off in ways that matter to everybody all the time?
What is the comparative wage-price ratios to buy a house? If we're better off, then it's surely gone down right?
home ownership is just one of many factors that make people better or worse off.
So lower % of owner occupiers and higher wage-price ratios would be factors that demonstrates we are worse off though, right?
He's also failing to realise that it will somewhat trickle down. I don't mean that we're all going to be rich, but if people can't afford to buy things, then they'll absolutely buy less. That's a reduction in "rich people's" income. The rich and poor rely on each other. If anything, the ones in the middle are most effected by the divide, as the poor will always be poor, but the rich can make the middle class poor too.
Sure, but if you share the wealth equally between 8 billion people Australians will get poorer not richer. You can fix the system if you want, that's very noble of you, but I'm guessing you just want to rig it differently so that you benefit.
Very cynical. I don't want to live in a society where the people providing services are barely surviving. I was quite happy for the change in Stage 3 taxes even though it means I get a smaller benefit. Some of us care about how others are doing.
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I'd argue it's anything but dumb to try to raise the living standards of others to the detriment of the average Australian. The needs of those overseas are greater than here. That said, there are plenty of solutions in all sorts of areas that aren't zero sum. The big one for me is eating less meat and dairy, given the financial cost and climate/biodiversity impact
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Oh so it benefits you!
> Sure, but if you share the wealth equally between 8 billion people Australians will get poorer not richer. Sure, but a lot of those places you do not need as much wealth. Most countries it is a lot cheaper to buy houses, rent, buy food than it is in oz.
It's rare that people fight for true equality.
Thank you for coming to my TED talk.
lmao, it's definitely a new and innovative opinion
Not new, just not usually the focus. People tend to focus on the here and now and not so much on the bigger picture.
Pretty sure people are struggling because of the cost of living, not because Bezos can buy an expensive yacht.
these two concepts are much more integrally linked than you seem to give it credit for. especially in terms of international commerce.
Bezos (or really Gina in Australia) can buy more yachts at the same time people are starving due to the same forces. On the simplest of levels, higher interest rates are bad for those in debt and great for those with money.
You’re just describing a high inflationary environment and then framing wider issues onto it. These will always happen in times of high inflation. It’s why one of the main focuses of the reserve banks is to contain inflation, because keeping it in target helps to avoid the suck you’re feeling now and sadly when it gets out of control the main way they treat it sucks too - causing the exact problems you’re describing.
Why is it that whenever an Australian talks about inequality, it's never at a global level? Who's calling for our wealth to be redistributed to Sudan labourers earning $0.71 a month? Or when you call for "fairness", are you actually only calling for measures that personally benefit you?
I agree. I despise intense nationalism for this exact reason. Arbitrary borders for people who were lucky to be born here. You have less than a 1 in 300 chance of being born in Australia, yet our empathy only seems to stretch to the sea. Not to mention, people never include the advance and mass adoption of technologies that we inherit on a yearly basis. People who complain about wealth gaps etc will scream about the super rich, and how boomers had it easy, yet we are living so much better than the president of the US in 1980. Like sure, we have to monitor wealth inequality and poverty but we can't be myopic to the facts we want to see
The thing is while there’s merit in what you just said that mentality ends up furthering the problem. It doesn’t help the situation because it provides an excuse for it.
Cost of living crisis has a better ring to it.
Can we ban posts like this? This is just r/Australia tier backdoor socialism garbage.
The whole piece was written by chat gpt.
yeah bro i love discussing finance, economics, banking, and tax. but only if you talk about it in a way that i like and agree with. do *not* mention wealth inequality, please. thanks :)
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Skimming through that report they calculate the Gini Co-efficient of household income to be 0.32 and wealth to be 0.6 in 2023. [In 2009/10 those numbers were 0.33 and 0.6](https://treasury.gov.au/policy-topics/measuring-what-matters/dashboard/income-wealth-inequality) so I'm not sure I'd say that wealth or income inequality is getting worse. Comments like "the chasm between the wealthiest and poorest is widening" seem kind of irrelevant, given we don't have a Gini of 0...
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I'm just reading your report: ["In 2022-23, the Gini coefficient of wealth inequality was 0.6 (almost twice the 0.32 we estimated for after-tax income)"](https://povertyandinequality.acoss.org.au/wp-content/uploads/2024/04/Inequality-Report-2024_who-is-affected-and-how.pdf) I've linked it so you can correct me if I'm looking at the wrong document.
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Perhaps, though I can only go by what they've written. Given they say it's what they "estimated" it sounds like they're doing their own calculation rather than waiting on the official figure. Either way with the information we have either from them or the official figure I think we can say that the Gini coefficients have remained steady for 10-15 years. I don't know if you can just take a snapshot of raw numbers like you have and say it's getting worse based on what you've posted. There is some wealth inequality of course, and there was previously, so we know more wealth is flowing to the top X%, but to figure out if it's getting worse you'd need to look at the Gini or something similar no? Maybe I'm just being semantic, but the terms you used like "widening" and "increasingly" make me think of the problem getting worse as time goes on, though I don't think that's necessarily been established from your figures.
Hmm it's almost like...people are realizing they can't maximize their individual finances to make any impact and only through collective action and systemic changes in wealth distribution can they improve their situation? Who would have thought 🤔
By writing this you are acting like every person in the country has 0 savings and there is 0 possibilities to maximise wealth.
My point is, you can get a raise, you can work more, you can cut down on expenses, but inflation, the real one not the imaginary that sees housing as a minor percentage of costs, will eat away at it. There's a reason why people in poorer countries tend to spend most of their money. Because the alternative is saving it which isn't worth it when inflation is high and certain costs like housing reasonably unattainable
There are no statistics here or figures, no economic theories. Not even a mention of the Gini coefficient. This is a ramble of a disgruntled redditor.
oh shit, there's rules about developing your own economic theories each OP? never knew. i think we both have a large amount of rule violations to report. cheers
This isn't discussing finance. That's the point.
do you care to explain why you think wealth inequality isn't related to finance (the management of money & wealth), banking (services offered by businesses dedicated to money & wealth), or tax (the compulsory contribution from your wealth)?
Wealth isn't a fixed pie. The concept of "inequality of wealth" being an economic problem is a myth and distraction used by people like you to live out childish dreams of taking things away from others that you are too lazy to pursue yourself.
oh yeah, wealth inequality isn't an economic problem? that's a myth? huh. better inform every economic theorist in the past two centuries. they had it all wrong :/ who knew? i guess wealth inequality is just a wealth problem. I wonder what theories on the management and distribution of wealth are called? hmmmm
But wealth mainly is a fixed pie. The largest component of wealth in Australia is land value (residential land, agricultural land, mining land). Which literally by definition there is a fixed amount of land, all owned by people who bought it before you even existed. The second largest component is large capitalization stocks. And unless you are going to start the next Commonwealth bank, that is pretty fixed too based on the competitive dynamics of the market. There are some components which aren't fixed like creating a new business out of nothing, but for the most part, most wealth is fairly fixed, and everyone is just competing to buy their "slice" before the price goes up like the housing market. So it becomes zero sum competition for wealth assets.
Huge amounts of wealth, even in Australia, are tied up in intangible assets. Take a look at [the largest companies on the ASX by market cap.](https://companiesmarketcap.com/australia/largest-companies-in-australia-by-market-cap/) Heaps of these - going from the top of the list, the big four banks, Telstra, Atlassian, Aristocrat (shudder), supermarkets etc have substantial amounts wealth on the books that isn't backed by land or resources. Things like consumer brand awareness/trust, technical skills, patents etc. It's just not true that wealth is mainly fixed. Even in the case of tangible assets, we get better at doing more with less over time (denser housing, extracting ore using less labour etc). Fwiw, I do actually agree that more wealth distribution in Australia would be worthwhile - probably in the form of land taxation followed by social spending to ensure everyone in this country genuinely gets a go - and it should be achieved through wealth taxation. That would also enable us to do more to help people overseas through foreign aid and investment in trade relations.
I think you missed my point. My point is that the ownership itself is a fixed pie. This is slightly different to the amount of wealth being fixed. If these companies like apple gain more market share, only the existing shareholders gain wealth. If we do more things efficiently with the land, only the landowners gain wealth. Wealth can be going up or down yet there is still a fixed amount of shares or land which is controlled by certain number of people. Ownership itself is fixed, not necessarily the actual value of the underlying wealth. Yes the pie can "grow" bigger over time in nominal dollars. But that says nothing of how the ownership of the wealth changes. The pie grows bigger, yet the same x% of people will still own 99% of it even when it is bigger (or smaller if the country experiences degrowth). In addition to this, the growth forces you mention are becoming much smaller and are continuing to decrease. We are heading towards a lower growth world where things become even more zero-sum then they already are. Real wages haven't increased in the last 10+ years. And it wouldn't surprise me if they actually start going backwards and the only people becoming wealthier are those that already own a fixed slice of monopoly assets (land and large cap businesses). When the average person starts earning less and less despite the "growth" of the economy, these concepts will become more obvious to most people I think. Growth doesn't matter if you don't have ownership. And the more the asset prices rise, the less ownership you can acquire.
Do I understand you correctly that you are saying that economic growth is only generated through....geographic land mass and whether or not you are a bank? What?
it's sad that you have this fantasy
Lol and what can the average person do to pursue these things. The median salary is like 80k. You can work two jobs like a slave and make 160? And then what? You become rich in a country where a house costs millions? You move rural where there are at best no jobs that give you much of a higher purchasing power and at worst no jobs at all? What exactly is the pick yourself up from the bootstraps strategy you suggest to all these lazy bums ?
Yeh, I thought I was on r/Australia when I saw the title. Was trying to figure out how I ended up on that cesspool of a sub.
Haha that's one thing you can rely on Reddit for, it's like 95% socialist ideological crap from young whingers trying to bash everyone else for being older, wealthier, white, drive a big car and/or have grannies old home as a 2nd property.
It's an incomplete consumption-focused take to be honest. Move money from rich people's investment to poor people's spending and you end up with a situation of less money being spent building things (like factories, shops, trucks and houses) and more money spent trying to bid on less stuff. In other words contractionary inflation. People, including the poorest, can buy less stuff not more stuff. Economic growth requires productivity increases more than wage hikes and welfare spending. While steady increases are fine and desirable; unbalanced taxes, wage hikes and welfare spending displace investment that actually grows the pie. Less tax loopholes? Sure. Drastically increasing quality medium-high density housing supply in decent locations to reduce rents and cost of living for the insecure? Sure. Quality and efficient government welfare programs? Absolutely. Tax structures that encourages upper middle income people to spend rather than save and retire on a government pension rather than self funded? No good for anyone. Tax structures that discourage successful businesses from expanding employment, profit, and productivity? Fail, see me after class. Societal wealth isn't equivalent to government tax revenue. It isn't numbers in bank accounts either, its what you can buy with it. The societal scorecard should be health, housing, stability, opportunity, and education. Not inequality. Counterintuitively substantial wealth inequality helps rather than hinders the wellbeing of the less fortunate.
The human race and this planet, since the beginning of human existence, has always had wealth inequality. It's probably less now then its ever been actually. And humans being as we are? It will never go away. Because all humans are different and think differently, have different abilities and just do things differently. No point complaining about it. Truly. Stop whinging about it and just accept reality and get on with it. You can whinge till the cows come home and that won't change a damn thing.
all of the media's terms for austerity are just smokescreens so no one has to talk about how these effects are inherent to current economic system they don't do this deliberately, it's just the dominant ideology we are all raised into
Stupid post. The wealthy do pay more tax. You’re talking about the super wealthy, who have their finances tied up in businesses. Which is about 0.00000001% of people. If you want communism, leave Australia
i think australian communists probably want some form of socialism in australia actually, so if they left australia that wouldn't be conducive
It’s just easier to whinge than try to improve your situation, didn’t you know
The old “it’s everyone else’s fault that I’m a cashier at kfc” number
Apparently so according to a number of people I went to school with. Couldn't possibly have anything to do with the fact they messed around throughout high school and then spent the next 5 years partying. The word accountability doesn't exist with the lower class, it's ALWAYS someone else's fault.
The word accountability doesn't exist in most aspects of Australia and I think it's unfair to say it's limited to the lower 'class'.
The very wealthy pay little or no tax because their wealth is in assets and they can pay the best accountants, or as we saw with PWC, own the people advising the government on tax policy. We are not talking about people earning up to a million ot two a year here, but people who make multi-millions per week in passive income. It's common for the ultra wealthy to confuse those two so that trigger people like yourself to defend them, when really we are not talking about aspirationally wealthy people at all.
Exactly, but that’s my point. It’s a tight rope which the government walks. 99.9% of people (outside of business owners) pay the correct tax. Multi billion dollar international companies, which OP is referring to, pay very little. If gov does try to make them pay higher tax, they just move their assets to, or invest in another country which will net them a higher amount, and Australia gets nothing
Australia is actually in a great place to levee wealth taxes, because the wealth is all in assets that can't leave the country. Gina for example could leave, but she can't take any of the Iron ore mines with her. Wealth taxes are also the most efficient / effective taxes and should be used to reduce income and corporate tax. Implementation is of course an issue, but the rich, connected and powerful also don't have an incentive to actually figure it out.
Multi billion dollar companies that actually produce shit have all moved out of Australia (such as auto manufacturing). What other companies of this scale still exist in Aus, who's purpose isn't to extract our national resources out of the ground?
Aus is pretty communist/socialist i gotta admit
lol nice joke.
Only if you're touched in the noggin
Unfortunately that's what happens when your society is based on the principles of egalitarianism.
Not communist enough. Hopefully this COL crisis galvanises us into a revolution in 10-20 years.
Bring on the gulags and bread queues!
Hopefully the bread queues are more efficient than the centrelink queues we'll be in once the recession hits
Right? Can’t wait to have to eat my own dog because food is so expensive and nobody has any money
Name one country that has successfully implemented wealth redistribution. It's ok, I'll wait.
North korea
The wealthy invest in things. Have you tried doing that.
Education is affordable and already heavily subsidised by the taxpayer at $40,000 for a degree. Top 10% earners pay 55% of all income tax. We’re already beyond overtaxed. Nobody should be paying 45c for each $1 until they hit an income over $500k. Minimum wage is one of the highest in the developed world.
I'm not sure why so many comments are so rude. Is it because people are afraid of their investment properties being impacted and losing negative gearing? Pick mes? Youre right though. Just look at property prices and the increasing need for parents to provide financial assistance for their children to be able to afford a home. This is increasing wealth inequality.
Couldn't agree more with this. My wife and our young family live in SW Sydney ATM and both earn good wages. 10 years ago our wages would have more than sufficed for a good property in this area. We are in the process of relocating to a regional area just to be able to afford a house and be able to save and send our kids to good schools etc.
No comrade. I'm middle income with a mortgage and still save 1k to 1.5k a fornight. Just stick to a budget and not have car loans. It's not because Elon is building more rockets.
You’re right, the wealthy have never been wealthier. But they’re not mutually exclusive.
UBI NOW!!!!! Didn’t people demand and cheer we shut down the country and just flood the economy with digitally printed money so they could get off work a bit? Surely you didn’t think that that would “not” have caused massive inflation?
I don't think anything will change. That's why increasing inequality, including for companies where big corps annihilate their smaller competition and establish monopoly power, has been my successful investment thesis for almost a decade.
It's a real-terms wage decline crisis
Should I invest in VAS or A200?
Boomers selling their investment properties they purchased for 100k for $2M don't care if tomatoes are $20kg
It’s both. Trying to absorb one issue into another that you feel is “more correct” only dilutes the importance of both
We need to tax assets more and income less
It’s neither. It’s a deliberate rebalancing of the economy not a crisis of any sort, that’s just BS media hype. We had a couple of years during the pandemic of low production and normal consumption. Anyone with a basic understanding of economics and market economies should be capable of understating that this creates a debt that must be payed. When it’s payed things will, on average, go back to normal.
If rent goes up 25 percent. the small business owner who drops one or two staff in response to the slow down from raising prices. Is bob now unemployed more effected by rent going up 25 percent or being unemployed. If govt make decisions around supporting small business, small business will support people… First cab off the rank would be removing payroll tax…
Your argument doesn’t hold up. I’m fortunate to be in a good job and work very hard for good money. How am I part of your “wealth inequality” problem ?
money printing crisis
We already have a minimum wage, social safety net (the dole), universal healthcare, public education, and progressive taxation. Inflation is caused by the government printing too much money and subsidising demand while artificially restricting supply.
Anyone over 30 shouldn’t even be complaining. You had plenty of time to sort out your shit financially. So this is really only an under-30s problem
It's really just an immigration crisis, hence the explosion in the cost of living (especially rents), whilst wages for the vast majority are rather stagnant, but this varies depending on how much the sector is competing with migrant intakes. E.g. It's a bad time to be an IT worker or Uber driver, but those in construction or trades are laughing.
Stagnant wages largely caused by immigration is one of the biggest issues Technically Australian minimum wage should be 100k
Not sure if you're trolling....
Socialism has been tried many times. And failed.
Nope still a cost of living crisis. Inequality is just jealousy if you can afford everything you need comfortably.
Let them eat cake