We live in an unequal society, says the federal government’s Productivity Commission in a report released last week.
However, the gap between rich and poor isn’t widening, the report says, and apparently we should be pleased about this. After all, says the report, inequality is on the rise in other nations, notably in the US.
Read the report and you’ll be struck by its lack of political courage, another of those “nothing to see here” documents that give the public service a bad name.
Shouldn’t it be scandalous that after nearly three decades of uninterrupted growth, the economy has failed to make a dint in the gap between the haves and the have-nots?
That the poor are only keeping their heads above water because of government support through welfare payments and free access to health and education? So much for the trickle down effect, that a rising tide lifts all boats and other illusions about modern free-market capitalism.
A clanger is the report’s silence about the growing inequality between those Australians with access to thriving capital city economies and those who don’t.
Meekly, the authors, on page 7, advise those concerned about this issue to look elsewhere. Of course, as a professor of geography, you’d expect me to be more than a little miffed at such a brush-off.
Which explains why I spent a few hours over the weekend investigating the life chances of people in the Hunter compared to those at the heart of the capital city economy on our doorstep.
I asked myself a basic geographical question: Is a worker more likely to hold a high-income job by living in harbourside Sydney rather than in Newcastle?
My first step was to download data from the Australian Taxation Office website, where there are details of income earned by taxpayers in every postcode in Australia for the 2015-16 income year.
To get a sense of how well Sydneysiders are travelling, I zeroed in on income earners living in the 32 postcode districts that front Sydney harbour between Gladesville bridge in the west and Sydney heads to the east. Not accidentally, perhaps, this area includes the electorates of Australia’s last three conservative prime ministers (prior to Mr Morrison).
The ATO says there are 329,776 taxable income recipients in these postcodes. Of these, 39,490 people earned more than $180,000 in 2015-16. This is more than one in eight of all harbourside pay slips.
For Newcastle, I combined data for the 28 postcode districts within the Newcastle and Lake Macquarie council boundaries. In these I found 180,006 taxable income earners, with only 4553 earning more than $180,000 in the year. That’s a rate of only one in 40 Newcastle pay slips.
So, the answer to my geography question: if you’re one of the 330,000 Australian workers living on Sydney harbour, you are five times more likely to be in receipt of a high income than if you live in the Newcastle-Lake Macquarie urban area.
If you’re one of the 330,000 Australian workers living on Sydney harbour, you are five times more likely to be in receipt of a high income.
Five times more likely to be on a good wicket? Who’d not want those odds?
It’s a significant difference. And it is evidence that inequality across NSW is becoming entrenched. Non-Sydney folk are being locked out of prosperity unless they have the skills demanded in Sydney’s highly-competitive professional-services sectors, and are able to up and move.
This means Newcastle’s best and brightest are leaving town.
But the success of their move isn’t guaranteed. Even if they land a $180,000 job, young Novocastrians in Sydney struggle to afford a place to live. Sure, they can opt for the outer ‘burbs and the long commute. But if they aspire to an inner city home, they’ll be regular losers in auctions where Sydney kids are backed by the vast inter-generational transfer of housing wealth now under way in the emerald city.
Meanwhile, for those left behind, the Newcastle economy, with its thin professional services labour market and thin pay packets, continues to struggle to deliver life’s material rewards.
The stories of a new geographic inequality across Australia need uncovering.
The unfolding 21st century economy looks rosy for our capital city economies. But not for the rest. For some reason, the Productivity Commission thinks these stories aren’t worth telling.
Phillip O’Neill is professor of economic geography at Western Sydney University.
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