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Episode 9: The impact of inequality on Australian society
This episode features Anthea Hancocks, CEO of the Scanlon Foundation Research Institute interviewing journalist Peter Mares and Dr Cressida Gaukroger on the escalating issue of inequality in Australia, and its multifaceted impact on society, democracy, and social cohesion. The conversation explores the ways in which inequality is manifesting, particularly through the housing market, and the implications this has on Australian society.
Key takeaways:
- Housing inequality and its broader implications: The housing market in Australia has become a clear indicator of the nation’s inequality. As property values soar, homeowners benefit from increased wealth, while renters struggle with stagnating wages and rising costs. This has created a situation where the top 20% of Australians now own a disproportionately large share of the nation’s property, while the bottom 20% own significantly less. This disparity is likely to continue across generations, further entrenching social and economic divides.
- Social segregation and educational disparities: The rising cost of housing has also led to spatial inequality, where people of different socioeconomic statuses are increasingly clustered in different suburbs. This segregation extends into the education system, where students often attend local or independent schools based on the socioeconomic status of their neighbourhoods. Such segregation diminishes social mixing and understanding across different groups, leading to greater polarisation and reduced social cohesion.
- Trust, government, and social cohesion: Peter Mares discusses how inequality affects people’s trust in government and public institutions. Drawing on research by Kate Pickett and Richard Wilkinson, he explains that higher levels of inequality correlate with lower levels of trust. This erosion of trust makes it more challenging for governments to govern and address the needs of all citizens. For instance, the United States’ poor pandemic response was partly attributed to a lack of social trust, exacerbated by high levels of inequality.This lack of trust extends to other areas, such as digital health initiatives, where people may be reluctant to share their health data with the government due to fears of misuse. Without trust, even well-intentioned government programs can struggle to gain public support, leading to negative outcomes for society.
- The threat to democracy: Inequality poses a significant threat to the foundations of democracy. Peter Mares highlights how those with the most resources and wealth tend to have a disproportionate influence on political outcomes. Even with regulations on electoral donations and spending, the wealthy can still wield considerable power in shaping policies that favour their interests. This undermines the democratic principle of equal representation and can lead to a lack of engagement from the broader population, who may feel their voices are not being heard.
- Economic growth and social cohesion: The discussion also touches on how high levels of inequality can hinder economic growth. When wealth is concentrated in the hands of a few, it can be hoarded or spent on luxury items like super yachts or overseas holidays, rather than being circulated through the broader economy to generate jobs and income. This concentration of wealth can lead to resentment and alienation among those who feel excluded from the benefits of economic growth, further undermining social cohesion.
- Public policy and the role of optimism: Dr. Cressida Gaukroger emphasises the role of public policy in addressing inequality and fostering social cohesion. She advocates for a wellbeing approach to governance, where governments focus not only on economic growth, but also on improving the overall quality of life for citizens. This includes ensuring that people have access to education, healthcare, and other essential services, and that they feel valued and connected within their communities. The wellbeing budget, or Measuring What Matters framework, is presented as a comprehensive approach to measuring indicators such as social trust, belonging, and cohesion. Dr. Gaukroger argues that by adopting this framework, governments can better address the root causes of inequality and create a more inclusive society where everyone has the opportunity to thrive.
For a deeper exploration of how inequality is shaping Australian society and what can be done to foster a more inclusive and equitable future, listen to the full episode here or watch here.