One of the defining concepts that underpins much of Malcolm Turnbull’s economic ideas – and pretty much every conservative government going back to Reagan and Thatcher in the 1980s – is the belief in “trickle down”. It’s the miss-placed idea that by giving tax breaks and other hand outs to big business and high-wealth individuals, their over-flowing economic success will trickle-down to provide benefits for the rest of us. But this week, we got yet more evidence that it simply doesn’t work – this time from the Chifley Research Centre.
The expert authors of the report Inequality: The facts and figures have found that rising inequality in Australia is at a 75 year high and is beginning to have a destabilising effect on our economy and society.
This report sits alongside global economic authorities, such as the International Monetary Fund (IMF), the World Bank and the Bank of England, warning that rising inequality is a serious threat to the future growth of advanced economies.
As well as the negative relationship between inequality and growth, there are far reaching social consequences of high levels of income inequality.
ACTU Secretary Dave Oliver was a key contributor to the report, writing that the Federal Government can and must take steps to reduce inequality. He said:
”The conservative plan for Australia would take us a long way down the wrong path. Global firms avoiding tax and domestic firms wanting to minimise tax in response, conservative advocates wrong-headedly chasing ‘competitiveness’ (and instead risking a revenue race to the bottom) and conservative politicians wanting to reward upper-income voters and (in some extreme cases) wanting to ‘starve the beast’ of the state, combine to put the long term public revenue at risk.”