Social Implication of the Current Wealth Distribution in Australia
The economic condition of a country has the potential to influence the population either positively or negatively. If the economy is experiencing high growth, the GDP will likely increase that raising the per capita income of the citizens. Therefore, the purchasing power of the population increases, and they will be able to obtain goods and services that can improve their lives. However, there are situations where a country’s economy is growing, but inequality in wealth distribution exists. Such countries face a lot of social issues, including the widening gap between rich and poor, high crime rate, inequality in accessing health care, education, and social goods. This study explores the potential social implication of the current distribution of wealth amongst Australians.
Australia is among the First World counties experiencing a higher economic growth rate than other countries. It is the annual Gross Domestic Product (GDP) is high, and therefore, it is possible for the citizens of the country to obtain high per capita income. However, many people in the country live below the poverty line because of the current inequality in income distribution. The country’s rising in wealth inequality was experience from 2000 to 2008, where it exponentially grew due to the Global Financial Crisis (GFC). From then, it went into plateau until recently when it started rising steadily (Stilwell and Jordan, 2019, p. 3). The increasing wealth inequality during the period between 2000 and 2008 is attributed to the unequal growth in investment and wages of individuals of the country.
The decline in the inequality since 2008 comes as a result of the increase in investment returns and payment of pension premiums. The rising inequality in Australia is also attributed to the government’s initiative of diverting people with disability from pension to Newstart allowance and cutting off family payments (Killewald, Pfeffer, and Schachner, 2017, p.400). According to economists, with the inconsistent social security policies in jobless and low-income people will continue facing myriads of economic challenges until the government revises such policies. Currently, the high quality of care and education is expensive to acquire. Only those who are wealthy can afford to pay for health insurance policies that allow them to receive high-quality medical care in good hospitals when they are sick. Also, the rich can take their children to prestigious schools where high-quality education is guaranteed.
Wealth inequality is unhealthy for every nation. In Australia, the poor find it hard to acquire high medical care because they have little to no funds to put in health insurance. The quality of education they can provide for their children is low, and therefore, the opportunities in the country belong to the wealthy. The gap between rich and poor is continuously increasing, and soon, it is likely that the small percentage of the population will own the country’s wealth. Such situations will lead to more troubles in the country as the poor population will not be satisfied with how wealth is distributed. The conflict between rich and poor may rise, or criminal activities such as theft and robbery may increase as the other group search for ways to survive in such severe economic hardships.
According to the ABS statistics, 20% wealthiest Australian households account for 60% of the net worth of the total household. This group has an average net worth of about $2 million per household. On the other, 20% of poor households account for 1% net worth of the total population and have an average net worth of about $30,000 per household. This implies that 20% of the wealthiest Australian households have a net worth, which is 65 times higher than that of the 20% of the poorest households (Dilnot, 2010, p.39). Therefore it is clear that the inequality in wealth in Australia is high. Anthony Shorrocks, one of the experts on wealth distribution in the world, stated that Australia’s s wealth distribution is in the second position in terms of inequality as compared to other major countries.
Inequality in wealth distribution breeds discontentment in society. It divides the country into two, the wealthy and the poor. The former strives to earn supernormal profits at the expense of the later (Allegré and Timbeau, 2015, p. 154). For instance, the plantation manager does not pay well the workers on his farm so that he may earn higher profits from the sale the farm produce. Also, workers are a force to work for long hours, leaving no time for recreation. These are some of the problems experienced by the poor in Australia. The rich works for few hours and earn large salaries which come will all sorts of allowance, for example, travel, health and housing allowances to mention but a few. On the other hand, the poor work for long hours but their salaries are low with no additional benefit.
The current distribution of wealth in Australia causes social injustices. Those that receive a large share of the country’s wealth enjoy all sorts of comfort and luxury. Additionally, those that receive small share struggles very hard to put food on the table. They are limited by a lack of finances to participate in activities that make life more comfortable as their counterparts who are wealthy. During holidays, the rich visit tourism sites such as mountains or beaches with their families and friends (Raskall, 2018, p.3).
On the other hand, the poor and their children remain at home since they can afford to pay for the travel and entry fee at such sceneries. On some occasions, the poor go to work to put food on the table because they rely on daily wages—such differences among the poor and the rich form undesirable social injustices.
Inequality in wealth concentrates political and economic power to a few individuals in the country. They manipulate such power to the detriment of the poor. Since they have a large share of wealth, they bribe the legislators both directly and indirectly to have laws passed to their advantage. They command massive influence in the society such that they can exploit the poor without fear of getting judicial punishment. In Australia, inequality in wealth distribution has split the society into two such that there are social amenities that are exclusively for the rich. For example. Some schools charge tuition fees that the poor cannot afford. Some universal joints are costly for people with low income and a share of wealth. It is, therefore, crucial for the government to set forth economic policies that ensure equal distribution of wealth.
Inequalities in wealth distribution result in the wastages of the countries resources. The rich who own large business firms, mines, factories, and plantations earn high revenues. They then spend such making extravagantly buying expensive things such as cars, gold jewelry, privates jets, and palatial buildings (Marks, Headey and Wooden, 2015, p. 65). The poor on the other do not own any poverty; in some cases, they live in rental houses and abject poverty. They do not have proper health care as they cannot afford to provide themselves with excellent sanitary facilities. It is difficult for them to educate their children and cloth them. This, therefore, perpetuate social inequality in the society, which should be eliminated by narrowing the gap between the rich and the poor so that the people in the country may co-exist in harmony.
Australia’s current distribution of wealth results leads to the mal-allocation of resources in the country. The well-to-do individuals have the high purchasing power to influence demand in society (Neckerman and Torche, 2017, p. 350). The producers distribute more goods to the economy that satisfy the needs and the preferences of the wealthy. Large amounts of resources are diverted to produce luxurious goods that the rich only afford. So, the products required by the rich are supplied in abundance, whereas the necessities needed by the poor are scarce. This, therefore, is a representation of social wastage and low economic welfare. The country’s law requires that every citizen should have the opportunity to acquire all the needs that sustains him/her. However, wealth inequality has led to the breaching of such a vital law. The government of Australia should revisit its economic policies to reduce wealth inequality in the country.
It is worth noting that, unequal distribution of wealth in a country perpetuate various forms of social challenges. It divides the country into two nations, the wealthy individuals and the poor. The former have substantial influence, and they usually earn significant profits at the expense of the later. The poor live in abject poverty and in insanitary conditions that put them under risk of contracting diseases. In Australia, the poor suffer because of the wealth inequality in the country. The upper-income group influences vast demand and the producers supply goods that they afford to live the poor unattended in the economy. The rich can access high-quality health care and education for their children as opposed to the poor. All in all, Wealth inequality perpetuates various forms of social challenges in society.
References
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