The Vinnies researchers claim we are on a ‘headlong dash into the chasm of inequality’
UNTRUE: This was the key claim in the Vinnies’ report, and it is false. No matter which measure we take, not much has changed in the distribution of incomes over the last ten years. It is impossible to justify the claim that Australia is on a ‘headlong dash into the chasm of inequality.’
They claim we are in danger of a ‘return to the dismal social injustices that characterised the dawn of the industrialised era, when people were kicked when down, while governments idly stood by’
UNTRUE: This warning is absurd. The federal government spends $87 billion on income support, and total welfare state spending amounts to $8,700 for every person in the country. Despite the Vinnies’ denials, our tax and welfare system redistributes more money to those on low incomes than virtually any other OECD country.
They say it is a delusion that economic growth increases ‘prosperity for all’
UNTRUE: Average real disposable incomes rose by 15% between 1995 and 2003, and even the least advantaged who earn nothing increased their spending power by one-eighth. This is a staggering vindication of the ‘trickle-down’ theory of growth that the Vinnies dismiss as a ‘glossy dream.’
They claim we are facing ‘severe dislocation’ and ‘increased crime’ as a result of current levels of income inequality
UNTRUE: In Australia, when incomes became more equal before 1981, crime rose rapidly. More recently crime rates have fallen significantly yet inequality has remained more or less constant.
They say that 4.5 million people are living in households with an income under $400 per week
UNTRUE: The data they cite are from a 2002-03 ABS survey which estimated 1.8 million households had a weekly income under $400. The Vinnies translate this into 4.5 million individuals. Analysis indicates the realistic maximum figure to be no higher than 2.5 million—they have almost doubled the realistic maximum estimate.
The Vinnies deny their research is informed by a Marxist perspective and accuse me of ‘vindictive name-calling’
UNTRUE: Key elements of Marxist theory inform recent Vinnies research output. These include: class analysis; class polarisation and the immiseration thesis; class conflict; the State as an instrument of class rule; dismissal of social democratic reform; a belief in state planning to replace the capitalist market system; and the belief that fundamental system change is necessary before the poor can improve their situation.
Professor Peter Saunders is the Social Research Director at The Centre for Independent Studies.
