Someone's getting filthy rich out of this resurgent mining boom, but it ain't the federal government. The secretary of the Treasury, Martin Parkinson, has used his first anniversary in the job to warn that Australia faces a decade of ''razor-thin'' surpluses despite the biggest boom in the nation's terms of trade since the gold rush days. It's an astonishing - and, on the surface, somewhat confusing - result. Australians, after all, are accustomed to the federal government bathing in an embarrassment of revenue riches delivered by the mining boom.
During the mid-noughties, Treasury was habitually embarrassed when its revenue forecasts - which assumed an imminent plateau in commodity prices - proved too pessimistic. This enabled the then treasurer, Peter Costello, to perform his annual crowd-pleasing trick of pulling a bigger-than-expected surplus out of his budget hat. The revenues from the first wave of the mining boom helped pay off government debt, create a Future Fund to cover unfunded public service superannuation liabilities and keep the budget in surplus at 1 per cent of gross domestic product.
The rest was returned to taxpayers in successive years of income tax cuts which took the top individual tax rate from 47 per cent to 45 per cent and pushed out the point at which it applied from $60,001 in 2002-03 to $150,001 in 2007-08 and $180,001 today. And come election time, there was always plenty of cash in the kitty for one-off bonus payments for seniors and families.
COMPLAINTS about the rising cost of living appear to have little basis in fact, a new study reveals.
It shows that incomes have more than kept up with prices, and in 2009-10 the average family was $224 a week better off than in 2003-04.
"There's been this 'rising cost of living' story over the last decade when really Australian households are doing better than ever" ... Ben Phillips, author of the latest study by the National Centre for Social and Economic Modelling. Photo: Michele Mossop
''I don't want to say everyone is doing wonderfully well,'' said Ben Phillips, the study's author. ''But there's been this 'rising cost of living' story over the last decade when, really, Australian households are doing better than ever.''
The study, by the National Centre for Social and Economic Modelling at the University of Canberra and AMP, says it is ''bigger lifestyles'' rather than higher costs that are exerting pressures on many households.
''If there are pressures they are coming from keeping up with the Joneses and our higher expectations,'' Mr Phillips said. ''We're spending bigger, and on a wider range of goods and services, such as private schools, and we're spending more on discretionary or luxury items, like restaurants.''
The study shows income and pension gains and a decade of low inflation have meant all family types are relatively better off, including working families with children, pensioners, high-income earners, and even families in the lowest income quartile.
Working couples with children are $328 a week better off in real terms than in 2003, and single parents are better off - but only by $59 a week. The highest quintile of income earners are $576 a week better off.
Despite believing ours to be an egalitarian nation, a ''super-rich'' elite has been a prominent part of our social and economic life since the early 20th century, according to former economics professor and federal Labor MP Andrew Leigh.
Addressing the Sydney Institute last night, Mr Leigh said that for only about four decades from 1940 to 1980 could Australia be regarded as egalitarian.
After an examination of tax records going back to 1910, he said ''the thing that strikes you first is that for all the legends of egalitarian bushmen, early 20th century Australia was a strikingly unequal place''.
Large fortunes were made in the early 20th century and many of the super rich lived extravagantly. Retail merchant Samuel Hordern raced yachts and bred racehorses. Goldmining magnate Walter Hall was a racehorse owner and collected old masters paintings. Other super rich of the era included newspaper magnate David Syme, pastoralist Samuel McCaughey, union-busting manufacturer Hugh McKay and retailer Sidney Myer.
In the 1910s and '20s, the richest 1 per cent of Australians had 12 per cent of national income. And the richest 0.1 per cent had 4 per cent - 40 times their proportionate share.
But the collapse of the super rich began in the 1950s, when the share held by the top 0.1 per cent fell to 2 per cent. By 1980, under prime minister Malcolm Fraser, the super rich held only one-quarter of what had been theirs under prime minister Billy Hughes in the 1920s.
''There are many things about the 1950s and 1960s that we would not want to keep but one value worth trying to reclaim about that era was the sense of egalitarianism,'' Mr Leigh said.
Typical Labor moron. No mention of house prices, and lets tax those super duper rich people on $100k who drive helicopters to work more. Lets give more money to tax dodging 6 figure earning property investing tradies.
A part of me is looking forward to Tony Abbott so I don't have to hear misguided, false, infantile spiels about "egalitarianism".
stinkbug omosessuale Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments. Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck! See here Property will be 50-70% off by 2016.
Bigger lifestyles, certainly true in my anecdotal experience.
When I look around I am shocked at the number of people driving seriously expensive cars (for me, that is anything > 40k). Many are leasing these at cost of > $1k a month, even if some offset against tax. Many more taking loans, other cashing in equity to pay for these. Similar story when it comes to holidays, massive sums spent there.
Then of course theres a decent # of people with enormous mortgage commitments.
Theres gonna be a dose of reality at some point. Maybe VIC will lead the way there.
For once I have to agree :-) We do have it very very nice.
We don't have open sewers running down our streets.
Everyone has a home who wants a home.
But just like every other country we have social problems sadly :-( depression is one of them and is quite high here. Makes me sad thinking about it.
Oddly enough thats a problem mostly for the rich countries. You don't see a whole lot of people in Sudan jumping off bridges... (Not on purpose anyway)
To be honest I don't really see how collective 'wealth' has much to do with the wellbeing of the nation, unless you want to go on holidays in Bali or import a flat screen. Cost of living increases will mean the 'wealth' isn't really felt by the majority.
There are far more important indicators of the wellbeing of a nation, like:
Literacy rate Life expectancy Hours worked per week Crime rate
Amongst many others.
This is the stuff I would be spruiking if I wanted to say how good my country was. Australia does pretty well on most of these I think.
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