Unwillingness to tackle inequality is at odds with advice from IMF, says ACTU, as report blames neoliberal policies for income gap

This article is more than 3 years old

This article is more than 3 years old

The Turnbull government’s unwillingness to take rising inequality seriously means it is increasingly at odds with conservative global economic institutions like the International Monetary Fund, Australia’s peak union body has warned.

The Australian Council of Trade Unions (ACTU) has released a new report on rising inequality of wealth and income warning Australia is at risk of becoming an Americanised society of working poor if people are not given a pay rise.

It is the union body’s first paper on inequality since Sally McManus, the ACTU secretary, called on unionists three months ago to start campaigning hard on the issue, saying workplace rules needed to be repaired in Australia to reverse the damage to workers caused by three decades of neoliberalism.

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“It has taken the right 30 years of union bashing and neoliberalism to take us where we are now,” McManus said in June.

“Inequality is at a 70-year high. Wage growth hasn’t been this low since records starting being kept.”

The ACTU paper, released on Wednesday, shows income inequality in Australia has been steadily rising in recent decades, “since neoliberal approaches began to dominate economic policy in the 1980s”.

It says inequality in wealth has also been rising, and in recent years it has been occurring at a much faster pace.



It says technological change has been one factor, but the trend of attacking the basic protections of workers has had a huge impact in Australia.

It calls on the government to arrest the decades-old growth in inequality by rebuilding a “relevant, modern and strong safety net” for workers, restoring a fair and independent industrial umpire, and taking away incentives for employers to casualise work.

It also calls on the government to dump its planned $65bn worth of corporate tax cuts, saying they will end up hurting workers because they will have to be funded by cuts to essential services.

“We should reverse the cuts to penalty rates, raise the minimum wage, change our industrial relations laws and look at ways we can help support trade unions,” the paper says.

“Industrial laws have always existed with one primary purpose, that is to address the inherent power imbalance that exists between capital and labour. That imbalance has never been greater. Our laws need to change.”



On Tuesday, on the eve of the paper’s release, McManus criticised the Turnbull government’s new industrial relations proposals, saying they were an “attack on democracy”.

The Coalition wants to amend the Registered Organisations Act to make it easier for union officials to be disqualified and for unions to be deregistered.

McManus said instead of addressing inequality Malcolm Turnbull and his employment minister, Michaelia Cash, were obsessed with attacking unions.

“There are two ways the Turnbull government can act to turn around inequality: make sure everyone pays their fair share of tax; and act so working people have strong enough rights at work to get decent pay rises and secure jobs,” she said.

“But instead the government is going in the opposite direction. Every day they think up new ways to hurt working people and weaken their rights while they are giving corporations $65bn in tax cuts.

“These are the same failed policies that have caused inequality in the first place.”



The treasurer, Scott Morrison, recently dismissed the suggestion that income inequality had worsened in Australia in recent years, claiming inequality had “actually got better”, but was contradicted by economists.

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Philip Lowe, the Reserve Bank governor, argued in July that inequality had increased in Australia.

“Wealth inequality has become more pronounced, particularly in the last five or six years, because there have been big gains in asset prices,” he said. “So, the people who own assets, which tend to be wealthy people, have seen their wealth go up.

“[O]n income inequality, it’s drifted up a little bit, but not very much. The movement in wealth inequality is a bit more pronounced because of the rise in asset prices.”