As Australia prepares to leave the European Union, the country’s economic development strategy has been under pressure to find a way forward in a time of economic uncertainty.
The OECD’s recent report on inequality highlights a gap between rich and poor and suggests that a greater proportion of the population should be in employment and earning a living.
Key points:Australia’s development strategy is under pressure as the country prepares to exit the EUA report released on Monday by the OECD predicts the proportion of Australians in work will increase by almost 10 per cent by 2030The report highlights a widening gap between wealth and income inequalityAustralia’s National Policy Institute, a think tank, said it was working with a number of private sector organisations to develop a “brand development plan” to ensure the country remains a “high-performing economy” in the coming decades.
The OECD report, which was released on the eve of the country leaving the EU, suggests Australia needs to do more to attract people into its labour market, especially young professionals and the educated.
“The gap between income and wealth is growing.
As the OECD said, ‘the gap between the rich and the poor is growing’, and that means more inequality,” the report said.”
We need to make sure we have a plan that is responsive to the changes in the labour market in Australia and the broader world.”
The report highlighted a widening gulf between the wealth and economic status of the wealthiest 1 per cent of Australians and the rest of the Australian population.
The study found the top 0.1 per cent had a combined net worth of $5.4 trillion, while the rest had a net worth between $2.7 trillion and $4.1 trillion.
The top 1 per the bottom 10 per the top 10 per, the top 1per and the bottom 1per, the report found, together earned $1.9 trillion, or roughly 11 per cent, of the national wealth of the whole population.
“It is important to remember that the income of a small number of top earners is not a marker of how well a society is functioning,” the OECD report said, adding that inequality could “be seen across countries, but in Australia, the gap between what people earn and what people can afford is widening”.
“The widening gap in income inequality and inequality in wealth could have serious implications for economic performance in Australia,” the document said.
It also highlighted the impact of the rising cost of living in the country.
“Income inequality is increasing, and this could have implications for the health of the economy and the social fabric of Australia,” it said.
The report also highlighted that the top 5 per cent earned more than the bottom 5 per the rest, and the top 25 per the lowest 5 per.
It said that despite the growing inequality in income, the majority of Australians were satisfied with their lives, with only a small minority dissatisfied.
The National Policy institute said the report “recognises that Australia is facing the biggest challenges of our time in terms of economic growth and economic competitiveness” and that the Government should act to “reduce inequality to achieve a more just and equitable society”.
The report said it will examine “the current status of economic development and the development of a sustainable, socially just and sustainable Australian economy” to “help ensure the Government is successful in achieving its economic growth targets”.
In the meantime, the NPI said the Government’s plan to create “a fair, secure and inclusive society” would need to include “the broadest possible range of people in all occupations, in all sectors”.
It said the strategy should also consider the “toxic effects of inequality” including the “impact on employment and productivity”.