Australian income inequality worsens

By Leith van Onselen

Earlier this week, the Australian Bureau of Statistics (ABS) released biennial earnings data as at May 2012, which contained some interesting facts about the composition of incomes across Australia.

The headline results are as follows:

  • In May 2012, the average weekly total cash earnings for all employees were $1,122.60 ($58,375 per year) and for all full-time employees were $1,452.00 ($75,504 per year).
  • Median weekly total cash earnings in May 2012 were $963.00 ($50,076 per year) for all employees. One quarter of all employees earned $588.00 ($30,576 per year) or less and one quarter of all employees earned $1,462.00 ($76,024 per year) or more.
  • Median weekly total cash earnings for all full-time employees were $1,250.00 ($65,000 per year). One in ten full-time employees received weekly total cash earnings of $738.00 ($38,376 per year) or less while one in ten full-time employees received weekly total cash earnings of $2,364.00 or more ($122,928 per annum).

So, according to the ABS, the median full-time income in Australia ($65,000 per year) was -$10,500 (-14%) less than the average full-time income ($75,504 per year).

And according to the ABS, the top 10% of salary earners experienced the strongest growth in employment incomes over the two years to May 2012 (Chart from Matt Cowgill via Twitter):

Matt Cowgill has also undertaken the painstaking task of creating a time series of employment incomes growth from earlier ABS releases:

As you can see, the lion’s share of employment income growth since the mid-1990s has gone to the top 10% of income earners, whereas the bottom 10% have fared relatively poorly.

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Comments

  1. Shouldn’t that last line read “the lion’s share of income growth since the mid-1990s has gone to the top” 10% of income earners instead of the top 90% ?

  2. the lion’s share of income growth since the mid-1990s has gone to the top 10% of income earners, whereas the bottom 10% have fared relatively poorly.

    It should be read as lion’s share of employment income growth.

    To make a case for total income equality in Australia you have to consider the so many and various income supports from Centrelink to some people.

    With high income tax rate in Australia to support those welfare transfers, I would not be so surprised if the more productive segment of workers demand some premium on their wages.

    Of course, this is not so much the case with USA where the income tax rate for the high-income earners is not high / quite moderate and welfare transfers are relatively modest. The big cats there are really “greedy” obviously.

    • “With high income tax rate in Australia to support those welfare transfers, I would not be so surprised if the more productive segment of workers demand some premium on their wages.”

      But don’t forget the middle class welfare that also transfers money from poorer single people to richer couples with children.

    • you should also consider the fact that rich people almost have no wage income. They channel most of their income (everything above 30% tax bracket) into dividends that are taxed at 30%.

      If all income is included, inequality would be much worse.

      • Mate, bit misunderstanding from you.

        Dividends paid to shareholder are still subject to the individual shareholder’s marginal income tax rate. The difference is only imputation credit to avoid double-taxation if the corporation has paid income tax on its earnings.

        The only trick they can play as rich shareholder of incorporated business is to defer dividend distribution out of the business’s earnings and let them compounded longer to achieve higher returns in the future.

        Or, you can also explore the currently popular family trust structure for tax planning …just like the Obeids 😉

        • The fact that nearly every Federal MP has a family trust structure tells you that its the way to go. They’re expensive to set up and operate though, they cost about four grand a year to register and maintain.

          • Mmmm. no they are not. My companies cost me $1500 to set up and $600 accountants fees yearly and $220 ASIC fees. Not $4k per year.
            My Family Trust costs me nothing per year if it has no tax to pay.

    • With high income tax rate in Australia to support those welfare transfers, I would not be so surprised if the more productive segment of workers demand some premium on their wages.

      Inequality produces costs to everyone, including the very well off.

      I suspect that if you did a comprehensive calculation, the proportion of tax paid by the top 10% (say) that goes to funding welfare payments would be a lot less than the cost of maintaining gated communities, security cameras, private security guards, etc. And that’s not even counting the indirect costs.

      • I partially agree with you that income inequality is not good for any society member but my point above is more to the fact that the high income earner may want to get wage premium due to relatively high income tax rate.

        However, your second point about the cost of personal security for the rich in unstable, less equal society is pure speculation and cannot be ascertain. Biggest point is the cost will be optional and subject to personal choice for them, some may require bit (gated community), others may require lots (M16 collection and CCTV at home ?). Of course, from the Left’s view the costs are not worthy and as high or even higher than the cost of higher tax paid like you said. However, the Right’s view is more in tune with personal choice preference compared to compulsory tax by state 😉

        • LOL. It has very little to do with Left vs Right.

          Much more to do with the laws of supply and demand and survival of the fittest.

          If there is a supply of something stealable owned by rich people, and a demand for that from others, then it will be stolen unless either there is a viable police force, OR one’s own resources are sufficient to deter theft.

          While police resources will be diverted toward rich people a little more than toward defending the poor (How much time went to M Jackson’s drug OD compared to Joe Ordinary on the street corner?), they will still be far more resourced toward defence against the middle capability level of crime.

          So, a rich person has a ‘choice’. Either spend lots of money to get a better security system, or let the law of supply and demand see their stuff go out the window. That’s where the law of survival of the fittest comes in. The person that makes the ‘choice’ of not defending themselves ends up poor, and the thief ends up becoming rich.

          They can defend themselves by use of private guards and gated communities to some extent, but that is limited in a lot of ways. It is sort of like having one’s own low security prison in which one, one’s family and one’s friends are the prisoners, and one is paying for one’s warders and prison walls.

          Of course, why would the Left object to the rich being locked up, ironically, by themselves? It would be just too delicious. It’s all a socialist plot by that Nigerian guy in the White House.

        • I partially agree with you that income inequality is not good for any society member but my point above is more to the fact that the high income earner may want to get wage premium due to relatively high income tax rate.

          Relative to what ?

      • The rich don’t mind that cost.

        With that transfer payment comes control, thus power.

        The welfare recipient has obligations, as opposed to having greater liberty if being able to acquire the resources by themselves.

        • The welfare recipient still has freedom of choice and action, and the ability to change their circumstances.

          Do you think the average person has more or less ability to acquire property, capital and good health than they did 100 years ago ?

          • Way to tangent off every point.

            The welfare recipient still has freedom of choice and action, and the ability to change their circumstances.

            I didn’t say they lost full agency.

            They are bound by certain obligations, that would not exist if they did have a job.

            We also have a NAIRU system which places peole in unemployment who don’t want to be there.

            NAIRU specifically structures there to be less jobs that available labour.

            When we had full employmnt policies after WWII, unemployment was effectively zero.

            In 1951, there were less than 1,800 nationwide on the dole.

            Either you ascribe to generational superiority, or people who wanted work, had it.. and were able to live their life with the greatest liberty.

            Do you think the average person has more or less ability to acquire property, capital and good health than they did 100 years ago ?

            The average person isn’t on welfare, which is specifically the target group being discuessed when the top of this nested target talked about income inequality and the bureaucratic cost in transfer payments.

          • Post-War Australia is the social nirvana you wish to re-set to ? You don’t see wherein that is a problematic equation ? You must have a different definition of liberty if you think people on the whole are worse off 60 years down the track. Work IS available to anyone who wants it, on the basis that it is priced appropriately and the worker accepts an appropriate rate for their labour. Not many in 1951 would shun work at a price that bruised their pride. I know where the sense of generational superiority lies.

          • Post-War Australia is the social nirvana you wish to re-set to ?

            Where does pointing out the IP laws and fiscal settings equate to anything else?

            You don’t see wherein that is a problematic equation ?

            I can’t interpret your framing, let alone anything problematic with it.

            You must have a different definition of liberty if you think people on the whole are worse off 60 years down the track.

            I didn’t say they were materially worse off.

            I said there is a segment that has conditions applied to their subsistence, which needn’t exist with the right calibration of IR laws and fiscal settings.

            I infer the reason behind them not being in existence is to strucurally benefit the power held by the rich.

            Work IS available to anyone who wants it, on the basis that it is priced appropriately and the worker accepts an appropriate rate for their labour.

            Yeah… except nah.

            Bill Mitchell’s research shows that since 1974, there has been an average of 27 job seekers for every vacant job, cyclical ratios withsdtanding.

            You may hold something different, then you’re adhering to a lie.

            Not many in 1951 would shun work at a price that bruised their pride.

            So you do ascribe to generational superiority?

            I know where the sense of generational superiority lies.

            No.. you don’t.

          • The current generation always believes itself superior – that much is certain. And there is probably something in a generation of returned servicemen rolling up their sleeves and accepting whatever wage they could get. Could you say that of the current generation ? I don’t think so. Unions wouldn’t allow it, to begin with, which would correlate well with Mitchell’s findings.

          • The current generation always believes itself superior – that much is certain.

            The generation in 1951 was ‘current’, in a contemporaneous outlook, you’re still not making any sense.

            And there is probably something in a generation of returned servicemen rolling up their sleeves and accepting whatever wage they could get.

            You’ll actualyl find that in a time of full employment during WWII, where every hand was on deck, including the 6-8% of the population engaged in wealth destruction, that they discovered everyone could be doing something.

            Replace the wealth destruction of firing lead bullets, or brass cannon shells, etc, etc, and replace the soldiers activity with something productive.. you got full employment. They ensured it was policy after WWII.

            This paragraph above was replicated… it saw massive contraction of income distribution, a bureoning middle class and those that inherited wealth fall down the class ladder if merit warranted it.

            Could you say that of the current generation ? I don’t think so.

            You wouldn’t, you’re the useful idiot carrying the banner of protecting the rentier.

            For you to descrobe this generation of not being capable.. yet not living in the same conditions as 1951 shows you have a bias yo’re not prepared to overcome.

            Unions wouldn’t allow it, to begin with,

            Of course…. even though unions were front and centre in the IR reforms and full employment policies of the late 1940’s.

            All abouts ‘dem unions!”

            which would correlate well with Mitchell’s findings.

            No, NAIRU correlates well with Mitchells findings.

            The observation also showed that incmoe inequality enlarged, productivity first dropped out of the lower clases, then the middle classes, the middle class contracting in size, a new class of working poor, then society cannabilizing itself on debt in an attempt to leverage itself into the upper clases.

            Affluenza killed the west.

          • “The welfare recipient still has freedom of choice and action, and the ability to change their circumstances.”

            Let’s put some context around this comment.

            1. IQ is a normal distribution with half having below average. The bottom of the distribution have real problems in ever holding a job in an economy which requires high skills, rather than repetitive physical action. while IQ isn’t everything, it’s very important.
            2. Mental illness is one of the major (top 5) causes of loss of age adjusted Diasability Years of Life lost (based on NSW Health report). People with recurrent mental problems are often last on, first off even in a good economy
            3. Skills are usually determined by choices made in your late teens and early twenties. Sectoral changes reduce employment in some industries which have difficult to transfer skills eg construction to IT support leading to cyclical unemployment for a significant percentage of those in some industries.
            4. NAIRU policies which raise unemployment when inflation looks to break out.
            5. Increased capital intensity and mechanisation. Car factories over the last 20 years are a classic example of this as is much other manufacturing. Robots are increasingly good value, displacing less skilled workers not displaced by offshoring.
            6. Home environment. Those who have come from households racked with mental illness, unemployment, bitter divorce, abuse, poor education, multi generational welfare dependency etc have a far less chance of having the skills, attitudes and habits to gain and maintain employment.

        • With that transfer payment comes control, thus power.

          Maybe you’re right but with segregated society ruled by the rich with their own personal security guards, would it become new feudalism with the powerful lord can force the serfs to do whatever he wants ? Power also…;-)

      • Thomas Sowell points out the inherent problem with the notion that there is an inverse correlation between welfare spending/wealth redistribution and crime (from which wealthy people have to defend themselves).

        This is, that MOST poor people do not become criminals; the vast majority of crime is committed by dedicated career criminals. And the factors that make up a dedicated career criminal are too diverse to argue that the level of welfare is a single useful tool to combat the phenomenon.

        In fact dedicated career criminals are most strongly influenced by the rational consideration of whether their career in crime will “pay” or not. What are their chances of getting caught, and how tough will their sentences be if and when they are caught? And another controversial factor is, what are their chances of getting shot by the owner of the property they invade?

        Sowell mentions that there are actually some municipalities in the USA that have covenants that REQUIRE home owners to have a gun in the home; and these municipalities have the lowest crime rates of all.

        • Sowell also comments elsewhere that he once lived in a neighborhood in Chicago which was ruled by drug barons. It was safe for his wife to walk the streets at night because the drug barons didn’t want other criminals drawing attention to the neighborhood, so anyone involved in violent crime “disappeared”.

          • Yes, I recall Sowell discussing the irony that a “monopoly” is bad for anything, and that seems to go for crime as well…….

  3. So the bottom 10%, even bottom 25% have declined in real terms? That’s really bad.

    Add on increases in staples – food, accom, utilities – and the it’s no wonder the bottom quartile are feeling so punished.

    • Hi,

      No. Real earnings have increased at all points of the distribution (at least from the 10th percentile up). The chart shows real (ie. inflation-adjusted) wages.

      • The are only ‘Real’ figures if you assess CPI to be broadly accurate across all areas.

        I would assert asset price inflation was merkedly higher, and even CPI was understated.

        • Mining BoganMEMBER

          I know, let’s have a CPI for every demographic.

          For the housing bulls it can be sunshine, lollipops and rainbows.

          My fellow bogans can have beer, golf balls, porn and flights to Bali.

          Nerds can have pocket protectors, thick glasses and Apple stuff.

          On a winner here.

    • Ahh…didn’t notice the ‘real’ label. Not such a big deal then. Still, not awesome to have growing and accelerating divergence.

      • The underlying “problem” is that the growth sectors in the global economy have generally involved higher “pay-off” to SKILLS and education.

        The same phenomenon can be seen in spatial economics; the rising incomes occur where there are agglomerations of the fastest growth sectors in the economy, mostly in big urban areas.

        I am all for the “Silicon Valley” type of phenomenon because wealth is created for everybody; but there is something wrong with sectors based on zero sum wealth transfers growing rapidly, eg Wall Street. I say Tobin taxes would fix a lot.

      • You are ignoring the crowding out effect and two tiering of basic services as the top 10% move to more and more investment properties, holiday homes thereby increaing prices out of the reach of those who might have otherwise been expected to acquire such.

        Also the top 10% get to use toll roads, private hospitals, private schools and maybe even city core roads if a congestion tax is introduced creating a two tier system of services. Some argue that this is a “soak the rich” policy giving them higher prices for such services, but it also cements social stratification and we have seen that in education the funding per student of rich private schools is maintained at very high levels.

        In the absence of death duties/estate taxes this social stratification is maintained beyond the grave and passed to the next generation.

        Class mobility is substantially decreased as has been seen in the US.

        • Where is the data re social mobility in the US, that actually tracks real people over their lifetimes?

          Furthermore, in most of the USA (200 out of 260 cities) they actually have affordable housing, which is a massive democratiser of social outcomes. I guarantee that 95% of first-home-buying households in affordable cities enjoy housing size, age, quality, and location relative to amenities (measured in trip time), that are only available to the top 5% in Sydney or Vancouver or London.

          Slagging off at the USA is a popular pastime that is seldom supported by the facts on the ground. Here is another item of relevance: the lowest income quartile in the USA includes a high proportion of recent immigrants, who nevertheless send the world’s largest flows of “remittances” by any scale of measurement, back to their countries of origin.

  4. A couple of things.

    Deo makes an excellent point on welfare transfers, which can be significant.

    Low income earners (the lowest quartile) must surely be junior employees/apprentices – who else earns salaries like that, can this be discerned.

    Finally, looking at Cowgill’s chart there appears a sharp uptick for high earners 2010+ – could this rapid increase be explained in part by the mining boom where tens of thousands of workers are employed $150-200k+.

    • Yeah, all fair points. I have changed the post so that it explicitly reflects employment incomes. Given the surge in WA average wages over the past few years, I reckon you are also right about the boom in mining incomes driving-up the high income earner’s share.

  5. I’m wondering about the mobility between the groups. I suspect a surprising amount of the salary income growth in the top bracket might actually go to tradies in the last half decade of remote construction mania.

    That would offer the hope that although the gap has grown the mobility has increased.

    • Hi,

      For a rough answer to the question of how much mobility in income (as opposed to earnings, which was graphed above) there is in Australia, have a look at table 6.6 on p.29 of the HILDA report: http://www.melbourneinstitute.com/downloads/hilda/Stat_Report/statreport-v7-2012.pdf

      55.5% of households who were in the bottom quintile in 2001 remained there in 2009. Three quarters of those who were in the bottom quintile in 2001 were in the bottom 40% in 2009.

      Around 70% of those who were in the top quintile in 2001 were in the top 40% in 2009.

      So there is some income mobility, but not so much that rising inequality can be dismissed as irrelevant.

      • But there is the same issue at the post retirement stage as at the workforce entry time.

        Some of the households falling from the top 10% of income over time would those that have moved from work to retirement over that period. If you are talking taxable incomes then with the tax free pensions from super this is even more problematic.

        To determine class mobility probably relevant to look at whether you live in a higher or lower socio economic ranked suburb (by deciles) than your parents at the same time of life eg mid 40’s.

  6. Studies like this are interesting to note at best. They do, however, serve as a great excuse for certain people to cry and moan about the how bad life is because income is become unequal, but at the end of the day it doesn’t actually tell you all that much.

    This video explains the situation very well: http://www.learnliberty.org/content/are-poor-getting-poorer

    Essentially, people tend to start poor, and get richer over their life. Also, as pointed out above, this could easily be accounted for by people simply moving into the mining industry and taking advantage of higher paying jobs or higher skilled workers demanding higher pay due to high levels of taxation.

    So long as it isn’t a result of direct government intervention (ie government subsidies to businesses or income bonuses/tax incentives to specific individuals over others and other special favours) then rising income inequality simply reflects the difference in productivity between the top and the bottom. In other words, the market has dictated that some people’s labour/ability is more valuable than others. There’s nothing wrong with that, governments that seek to counter this kind of ‘inequality’ end up lowering the income of everyone and, in today’s globalised world, encourage the wealthiest to simply pack up and leave (check how many millionairres there are in France right now compared to 2 years ago).

    Finally, things like CPI don’t measure real increases in living standards. How many people 10 years ago had high speed broadband internet for example? How many iphones were there? What were the cars like?

    A great little article, from a while back, to explain the reality of the situation and the historical context here: http://paulgraham.com/gap.html

    • I agree with you about poor people today having access to affordable goods that their equivalents 10, 20, 30 years and more ago did not. Joseph Schumpeter said the genius of capitalism is that it does not provide more and more stockings for princesses, it brings stockings within the reach of millions of working class women.

      But the worst and most damaging exception to this rule, is “housing” where government controls have caused massive increases in zero-sum economic rent wealth transfers. In the affordable liberal urban land markets in the USA, the poor DO enjoy something of the benefits of capitalism making everything cheaper for everybody. Compare what the bottom quintile in a median-multiple-3 city enjoy in terms of housing size, age, quality, location relative to amenities, etc; with their counterparts in a median-multiple-6-or-over city.

      The median multiples themselves conceal the fact that attributes of “housing” have inevitable been “traded off” already in an endeavour to “afford” housing, in the higher median multiple city. Housing will already be smaller and in worse condition on average. And the impact of the rationing of all attributes of housing lands the most severely on the lowest income earners. They are forced into the smallest amount of space per person, in the worst locations, in the lowest quality, least healthy “housing”.

      Patrick Troy (Australian National University) hit the nail on the head when he said “urban consolidation is just code language for reduced housing standards for people who can’t buy their way out of the rationing system”.

      There is an interesting paper, “Real Income Disparities in Britain” by Gibbons, Overman and Resende of the LSE, in which they point out that this phenomenon is a powerful “multiplier” in terms of life outcomes, of the initial income disparities.

    • Jumping jack flash

      “Finally, things like CPI don’t measure real increases in living standards. How many people 10 years ago had high speed broadband internet for example? How many iphones were there? What were the cars like?”

      I agree with what you say except this bit.

      (In my opinion CPI doesn’t measure anything, except give them the result they design it to give, but that’s another story.)

      If you measure living standards by the availability and affordability of trinkets, then yes, we have never had it better.

      But if you measure living standards by availability and affordability of food, shelter and energy then we are certainly worse off than say, 50 years ago.

      Trinkets are as they do. They must fall in price as they are essentially worthless in the scheme of things. I can survive quite happily without my mobile phone for example, but sure, it does do some pretty nifty things and entertain me, and I can use it in an emergency situation I suppose, If I have coverage.

      Meanwhile, I pay more for fresh fruits and vegetables at the local supermarket, so much so that I haven’t bought fresh vegetables for well over 2 years.

      I can surf the internet faster than ever and download terabytes of pron at an astounding rate, but in the meantime my electricity price triples.

      I think people have become too fixated on the optional extras, and forgotten about the base unit. This is true for many things in this modern age.

      • I think people have become too fixated on the optional extras, and forgotten about the base unit.

        Sounds like you certainly have. Stop downloading the terabytes of “pron” and buy some fresh veges.

  7. I’m confused about the ‘total cash earning’ definition. Is this figure after super and income tax?

    • Here’s the definition from the ABS:

      “Remuneration paid to employees on a regular and frequent basis (quarterly or more frequently) for time worked or work done and for time not worked, such as recreation and other types of leave. Cash earnings (inclusive of amounts salary sacrificed) are gross amounts, that is, before tax and other items (e.g. superannuation) are deducted.”

    • That raises another question.

      What does the distribution look like for after tax incomes for employees?

      Does the progressive nature of our tax system and some of the special levies narrow the after tax spread?

  8. Inequality of outcomes is not something to be sanguine about. But we shouldn’t let the relative measure lead us to neglect the absolute (or vice versa).

    If you could offer me 3.2 per cent real terms growth for the 10th percentile every two years for the next 20 years, I’d take it every day of the week.

      • “Best”? Only if you believe there is something magical about the pre-existing allocation of economic gains between capital and labour. I don’t believe there is.

        The broader point is someone could only offer me that deal to take by giving me some pretty strong productivity performance into the bargain – you can only expect to increase unit labour costs so far.

        • Only if you believe there is something magical about the pre-existing allocation of economic gains between capital and labour. I don’t believe there is.

          Why would it have to be ‘magical’ if it is measureable?

          The broader point is someone could only offer me that deal to take by giving me some pretty strong productivity performance into the bargain – you can only expect to increase unit labour costs so far.

          The means to remunerate labour is still enabled by labour’s output.

          If had had 25% YoY increases in my output, I’d be pretty peaved off with 3.2%

          • It does not have to be magical because it is measurable.

            However, some may choose to believe there are magical economic forces that dictate a precise or ‘right’ share of income for labour.

            My view is economic forces are real, but there is still a good deal of negotiation to be done around the carve up of rents. And when you are carving up rents, many alternative allocations are feasible.

            If your output increases by 25 per cent, how much of that is due to just your improvement, as opposed to say new capital, rising demand that eats up excess capacity due to older investments, or agglomeration due to the investments of unrelated parties?

            If you can go negotiate a nice big share of the rents, you’ve done well for yourself.

            Those in the 10th percentile may not be well armed at the rent negotiating table, so I’d take that deal on their behalf.

          • You guys are having an interesting discussion, but see my point above about the way distorted urban land markets “sort” real life outcomes by income disparity:

            http://www.macrobusiness.com.au/2013/01/australian-income-inequality-worsens/#comment-209452

            I strongly agree that it is something to be thankful for if the bottom quintile gets, say, 3.2% growth in income even while higher quartiles get more; this is an unavoidable phenomenon associated with economic growth. The strongest growth sectors are always the ones where the pay-off to skills and education are the greatest.

            BUT distorted urban land markets act as such a powerful “multiplier” of initial income disparities, in terms of real life outcomes, that I would argue that THIS is the biggest crisis of “inequality” deserving our urgent attention.

  9. Leith, your headline suggests that you think increasing income inequality is a bad thing. This implies that you must have some idea of what you consider an optimum income distribution. Perhaps you would care to share it with us, together with your reasoning for thinking it the best.

  10. People who wish for more “income redistribution” are missing something elementary that the controversial NZ politician Roger Douglas pointed out decades ago.

    That is, every citizen over his lifetime carries a price tag in government spending, of something like $100,000 per year. Every citizen has been educated, gets police protection from criminals and enjoys stable social conditions. Every citizen gets defended from the nation’s enemies; every citizen gets to use the same roads; every citizen has been born in a free public hospital and gets free public health care.

    So before the poor start grizzling about “the rich paying their fair share”, consider THIS: “the rich” are ALREADY paying for MOST of the “benefits in kind” that YOU get from government. They might already be paying $90,000 of your annual $100,000 price tag as a citizen; you want them to top up your income as WELL?

    Roger Douglas’ radical suggestion was to get government OUT of providing the “benefits in kind” and concentrating on wealth redistribution. Just give everyone the $100,000 that has been taken off the rich on their behalf, and let them pay their own way in a totally free market economy for education, health, welfare insurance, transport, etc. Defence and Law and order would have to remain in the purview of government of course.

    Roger Douglas has always been smeared as a right-winger tool of the greedy rich; but 99.9% of people have not actually read for themselves, or been told, what he actually has said and written.

    • Roger Douglas’ radical suggestion was to get government OUT of providing the “benefits in kind” and concentrating on wealth redistribution. Just give everyone the $100,000 that has been taken off the rich on their behalf, and let them pay their own way in a totally free market economy for education, health, welfare insurance, transport, etc. Defence and Law and order would have to remain in the purview of government of course.

      It’s an interesting idea, but one has to wonder about how he planned to deal with the inevitable proportion of people who squandered their annual allocation and, more importantly, their dependants.

      • Then why pay anyone anything out of the public purse, out of “compassion”? Why pay welfare benefits at all? What is the difference in human nature, that people apparently will squander their allocation of $100,000 a year, yet we can trust them with $20,000 per year? If they would let their dependents starve in the one instance, why wouldn’t they do that anyway?

        If this is a problem, the solutions that need to be adopted, need to be adopted now anyway if they are not already – institutionalise ’em and adopt their kids out.

        • Then why pay anyone anything out of the public purse, out of “compassion”? Why pay welfare benefits at all? What is the difference in human nature, that people apparently will squander their allocation of $100,000 a year, yet we can trust them with $20,000 per year? If they would let their dependents starve in the one instance, why wouldn’t they do that anyway?

          Uh, because the point is you don’t give them $100k, you provide the services that people can use, so they – and particularly dependents – can benefit from those regardless of how they might waste cash.

          If this is a problem, the solutions that need to be adopted, need to be adopted now anyway if they are not already – institutionalise ‘em and adopt their kids out.

          Odd to see such a massively statist solution from you.

          • I said “if this is a problem”.

            What Roger Douglas pointed out, and Charles Murray has said the same thing more recently, is that the “size” and cost of the State is far larger by having it actively providing the services in kind, in comparison to merely acting as an income-redistributive agency.

            So even a “non statist” should view it as the lesser evil.

            Roger Douglas said that he believed people who are currently in the lowest quartile had far more nous than they are given credit for, when it comes to finance. Give them the money and the control that a “customer” has over the services they receive, and many of them will end up as active investors with their surpluses.

          • I said “if this is a problem”.

            If your measurement of “a problem” is “spends all their money recklessly”, then you’re proposing “institutionalising” a vast number of people compared to today, since in contemporary society we generally try to assist such individuals with the aim of integrating them into normal society, rather than throwing them into asylums and pretending they don’t exist.

            Shades of mandatory adoptions of children from unwed mothers from earlier times.

            What Roger Douglas pointed out, and Charles Murray has said the same thing more recently, is that the “size” and cost of the State is far larger by having it actively providing the services in kind, in comparison to merely acting as an income-redistributive agency.

            That’s because the primary objective is to provide the services at the widest and most comprehensive level, not do so at the lowest cost (or, at least, it was – the political shift rightwards in recent decades has seen cost become the more important factor).

            So even a “non statist” should view it as the lesser evil.

            Maybe if your measure of ultimate “evil” is “compromising lowest-cost efficiency for accessibility and quality”.

            (Then again, it probably is.)

            Roger Douglas said that he believed people who are currently in the lowest quartile had far more nous than they are given credit for, when it comes to finance. Give them the money and the control that a “customer” has over the services they receive, and many of them will end up as active investors with their surpluses.

            I am not making any discrimination against people in the lowest quartile when it comes to “nous”. I am making the point that here in the real world, there is a non-trivial proportion of people who will take all the money they get and waste it, without forethought for either their future or anyone else’s. It could be gambling, it could be drugs, it could be huge legitimate expenses (eg: medical problems) it could simply be profligate living. It doesn’t really matter. The question that arises is, what do we do about these people and, more importantly, those who depend on them ?

  11. In the second most casualised workforce on the home planet the numbers that UE present seem correct.

  12. Sorry to advertise my ignorance but I just skimmed through the whole ABS report and cant find a hint of a definition of “total cash earnings”

    Is that before tax but without super

    Or including super contributions?

    Would make quite a difference but the ABS don’t make that clear…