The CIS should take a BEX and have a good lie down

Vinnies would have welcomed an informed debate on income inequality. Instead we were served a dish that was heavy with spice but not with substance. Peter Saunders has made a number of assertions that bear little resemblance to the reality witnessed by the 40,000 members of the St Vincent de Paul Society who assist more than 1 million Australians each year. As for the 4.5 million Australians living in households on less than $400 a week, no amount of trickiness will convince these battlers that they’ve never had it so good.

His glowing statistic on Australia’s level of social expenditure is 10-years-old. Latest OECD figures (2001) place Australia 7th from the bottom of 29 OECD countries, ahead of only Canada, the Slovak Republic, Japan, USA, Ireland, and Mexico.

Investment in affordable housing, health, education, transport and childcare are uppermost in our considerations of how Australia can move forward with a national strategy involving all levels of government. The CIS, however, seems to be fixated on welfare. It is not without irony that they would prefer Vinnies and other charities to stick to dishing out the soup instead of asking questions about the causes of deprivation. Helder Camara, the Brazilian Archbishop, once famously remarked: “When I give bread to the poor I am called a saint. But when I ask why they have no bread, I am called a communist.” This is precisely what Peter Saunders has done.

Our paper not only draws attention to the growth in income inequality but outlines various ways in which this growth could be measured.

Private income growth ignores the people who have no private income. While we have this reservation about this measure, it is hardly a moderate increase in inequality when the lowest 10 per cent get an increase of $26 and the highest 10 per cent get an increase of $762. On this measure, high incomes rose by almost 3,000 per cent above the bottom incomes. On any reading, it is a mathematical illusion to suggest that the bottom 10 per cent are the winners.

The absolute figures in the ABS Survey of Income and Housing demonstrate that between 1994-5 – 2002-3, low incomes (real mean weekly income of $269) experienced a 12 per cent rise ($32.28); middle incomes (real mean weekly income of $449) experienced a 14 per cent rise ($62.86); and high incomes (real mean weekly income of $975) experienced a 16 per cent rise ($156.00).

It is no surprise therefore that the share of disposable household income of the lowest 20 per cent fell from 8.3 per cent to 7.7 per cent between 1996-7 and 2002-3. In the same period, the share of the highest quintile rose from 37.1 per cent to 38.3 per cent, while the share of middle income earners held steady.

While Peter Saunders passes this disparity in the growth between the low and high incomes as moderate, those who must survive the daily grind in the lowest quintile would not.

He cites an ABS comment that the movements in inequality are not statistically significant. If he had read the ABS commentary in full he would have seen the following:

The statistically significant movements are the increase in the P90/P10 [the ratio between the top and bottom 10 per cent of incomes] and the decline in the share of the total income going to persons with low income.

The ABS data presents us with real cause for concern. For those who consider poverty and inequality to be mere abstractions, it is hard to imagine the reality of social dislocation and personal upheaval faced by too many Australians at the dawn of the 21st century. Australia has the 4th highest rate of poverty amongst the industrialised OECD nations. According to UNICEF we have one in seven children living in poverty. We have 2 million people looking for work or more work, and 9 out of 10 jobs created in 10 years of economic growth paying under $26,000.

The CIS response to the issue of income inequality is one of obfuscation and diversion. In the end, the best Peter Saunders can do is to say that income inequality has grown but that this is nothing to worry about.

He might also like to take a closer look at the St Vincent de Paul Society’s history before preaching to us on how we should conduct ourselves. We continue to carry out the works he enumerates as well as many others. Our founder was not St Vincent de Paul but Frederic Ozanam, a student at the Sorbonne who went on to become a professor. He adjured his confreres to “not be content with tiding the poor over the poverty crisis” but to “study the injustices which brought about such poverty, with the aim of a long term improvement”.

Ozanam also wrote: “The issue which divides the people of our times is a social issue … whether society is merely to be a great exploitation to the advantage of those who are strongest, or a society in which everybody devotes their energies to the common good and above all to the protection of the weak.” Was he a communist? No. But if he was alive today and sought to work for a more just and compassionate society, I have no doubt that he would also come under attack.