comments_image Comments

As Inequality Worsens, Millionaires Are Pulling Up the Drawbridge Behind Them

The 1% evading taxation while choosing to share their anger rather than their wealth.

Continued from previous page


You can drown in data measuring inequality, but just as much can be revealed by examining our culture and politics and increasingly our interactions with each other.

The US has a peculiar obsession with the right to bear increasingly lethal weapons. In Australia, the obsession is with private schools. 35% percent of our students now attend them. This compares with class-riddled Britain (10%) and the average across OECD countries (17%). Some 60 years after then prime minister, Robert Menzies, first decided to equally fund students in both government and non-government schools, educational inequality has become entrenched.

When the head of an exclusive Melbourne private school for girls challenged her sacking in September 2012, we got a rare insight into the transformation of Australian education and the passions of the contemporary middle class. Rosa Storelli, the principal of Methodist Ladies College, was fired after questions were raised about “over payments” said to have been made to her. Explosive details of the school’s finances became public.

At the time of her sacking, Storelli enjoyed a $560,000 remuneration package. Not only was Storelli paid more than the prime minister, her taxpayer subsidised salary exceeded that of state school principals by a multiple of between three and four. As for the school itself, it had an operating budget of $55m. In the three years prior to the sacking, MLC had received $25m in government funding. You can count the number of public schools who received equivalent funding in the same period by ignoring the fingers on one hand, and instead gazing intently at your navel.

A ridiculous amount of media space was devoted to the ins and outs of the Storelli sacking. For Melbourne newspapers, particularly The Age, it was a sacking like no other and merited weeks of saturation coverage. The school’s parents, the wealthy burghers of Melbourne’s comfortable eastern suburbs, took direct action, forming a picket line at the school. Unprecedented.

Of course growing inequality is not unique to Australia; it has become an increasingly prominent issue globally. The issue resonates in advanced economies, a by-product of the dominant neo-liberal economics of the last 40 years.

In the US, minimum wage employees  do not earn enough to survive and are forced to take a second or even a third job to make ends meet. All attempts to reduce inequality – including through taxation and other redistributive policy – are countered with a conservative cacophony of “class warfare” as the wealthy seek to aggressively maintain their advantage. In 2005, multi- billionaire Warren Buffett claimed that the rich was winning. By 2011, he declared that the 20 year war was over.  “We won”, he exclaimed. Buffett has argued for tax reform to change a system in which he pays less tax than his administrative assistant.

The relentless emphasis over the last 40 years in public policy on economic growth and material gain is now being challenged with an increasing urgency. Some of the critiques of neo-liberalism are coming from unlikely sources, most notably the head of the Catholic Church, Pope Francis who argues:

While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by the happy few. This imbalance is the result of ideologies that defend the absolute autonomy of the marketplace and financial speculation.

His analysis, contained in the apostolic exhortation  Evangilii Gaudium, has resulted in the Vatican being described as the modern “spearhead of radical economic thinking.”

The unprecedented aggregation of wealth in Australia has not engendered a more generous or altruistic era. Those who have amassed significant wealth or advantage now aggressively assert their right to enjoy it  unencumbered by any interference in the form of taxation or redistributive policy. They find succour in the ardent support of the Liberal and National party, large parts of the media and peak business bodies.

See more stories tagged with: