Australia may have enjoyed 26 years of uninterrupted economic growth – but not everyone feels they have benefitted.
A survey of almost 3,000 Australians commissioned by the Committee for Economic Development of Australia (CEDA) reveals that just 5 per cent believe they have personally gained a lot while 79 per cent now believe that the gap between the richest and poorest in the nation is not acceptable.
CEDA argues that the gap that has emerged makes it difficult for Government to gain traction with voters for its plans to further reduce corporate tax rate and introduce business reforms because most people don’t see any benefit for themselves.
According to CEDA CEO Melinda Cilento; “While the economy overall has grown at an annual average rate of around 2.5 per cent over the past five years, real GDP per capita has grown by 0.9 per cent per year. Disposable incomes per capita – that is, what people have to spend – have barely risen at all.
“Most Australians feel that the big winners from our 26 years of economic growth have been large corporations, senior executives, foreign shareholders, white collar workers and Australian shareholders,” while one in three respondents say they are finding it hard to make ends meet on their current wage.
The current push for lower business taxation, reduced business regulation and support for new business investment, all ranked as ‘widely unimportant’ issues for Australia’s future among survey respondents.
According to Cilento this creates a deep problem with regard to ongoing economic and business reform: “If our regulatory, tax and broader policy settings are not conducive to business investment, the ultimate cost will be borne by the wider community.
“For government to have the political capital to implement the right policy settings, the community needs to have trust that the benefits will be shared broadly.”
Economic disconnects have already had impact in other countries such as the UK and US.
Speaking at a recent conference in the US, Dr Condoleezza Rice, Secretary of State in the George W Bush administration and now professor of political science at Stanford University, warned that society was at risk of bifurcation which she said, had profound political implications.
Describing the 2016 US election, which led to the appointment of President Trump, as the "do you hear me now?" election which was swayed by "the people who didn't quite benefit from globalisation...and now risk being further disrupted by automation,” Dr Rice said; "These are the people who were prepared to take a chance because it couldn't get worse," adding that the same elements were at play in the UK's Brexit vote.
Dr Rice said that business had a responsibility not to inflame the situation any further by deepening the divide now evident in Western society.
CEDA’s survey makes clear the extent of the current divide. While 87 per cent of respondents felt big business had benefitted to some extent from 26 years of growth, and 86 per cent believed senior executives had reaped rewards, that slid to 77 per cent for white collar employees and 56 per cent for blue collar workers – though much less than big business and executives.
Although most respondents reported reasonable job satisfaction about a third would like to work more hours in return for more pay.
When CEDA asked what Australians looked for when looking for a job most said basic conditions in the including safety and wellbeing, were paramount, followed by pay, benefits, training and development, and opportunities for career progression.
The full report can be accessed at: http://www.ceda.com.au/Research-and-policy/Community-pulse-2018-the-economic-disconnect