FourFourSeconds ago, we shared an article that stated, “Australia’s economic recovery may be under way, but the global economy is still not quite as strong as it once was.
The global economy has now recovered to about 5 per cent growth and the global economic outlook is looking very positive.”
However, according to a new report by the Australian Institute of Financial Research (AIFR), that “global outlook” may not be quite so good.
In the wake of the recent global financial crisis, which was triggered by a sharp fall in global demand and a surge in Chinese demand, the AIFR report stated that the global economies are “facing the possibility of further economic slowdown, particularly in China”.
“The Australian economy is in an area where it has seen its economic performance deteriorate considerably over the past several years, and this deterioration is likely to continue,” the AISR said in its report.
“This deterioration will continue, in particular in Australia, and could continue to grow in the longer term.”
The global economic recoveryThe AIFr report stated, the global recovery was only possible because of the growth of demand and the economic stimulus provided by China.
The Chinese government has been very vocal in their support for the recovery.
The government announced it will spend about $1.2 trillion over the next three years to help the economy recover from the global financial shock.
However, the economic recovery has also led to more inequality and more financial instability.
The AIFs report states, Australia is now seeing the “most pronounced rise in inequality since the 1980s”.
While the AAFs report does not explicitly identify Australia as a member of the global elite, its authors argue that the country is “in a similar position” to many other nations.
“Wealth inequality in Australia is among the highest in the world, with the top 10 per cent owning as much as the bottom 80 per cent,” the report said.
“The gap between the top and bottom 90 per cent of households is growing.
And the top 1 per cent are now holding more than 40 per cent in the economy.”
It goes on to state that “this growing gap is particularly concerning given the recent rise in global inequality”.
“It may be that Australia is not immune to this rising inequality,” the authors wrote.
“This is especially the case given that the incomes of the top 0.1 per cent have increased by more than a factor of five since the year 2000.”
While the gap between these groups is widening, this is less than half of what was the case in 2000, and still significantly below the levels of inequality in the 1980’s.
“The AAFr report concludes, “The growth in inequality is likely a reflection of the fact that Australia’s economic growth has been so strong, and so rapid, that the economic system has become increasingly stratified and dominated by the top.
“By virtue of its highly unequal distribution of income, it is likely that Australia will continue to have a high level of inequality, in the form of high levels of financial inequality, with inequality likely to increase as a result of the continued rapid economic growth.”
The top 10%The AASR report notes that the top ten per cent own 40 per per cent or more of all wealth in Australia.
This group comprises “the top 10.1% of households in Australia” and “the 10.3% of people with total assets of more than $5 million”.
“These households are responsible for over half of the income in Australia,” the researchers said.
The top 0 of households”are likely to have the greatest wealth and influence in Australia due to the power and wealth that they wield over political and economic decisions, and their control over the economic policies and outcomes of Australia,” they added.
“These people are also the most likely to be influential in the direction of the economy and to exert considerable influence over how it operates.”
These 10.2 per cent include a large proportion of those who have managed to hold onto their position in society, and the people who have a substantial amount of influence over the direction the country has taken, and who are able to exert influence over its policies.
“The report states that the “top 1 per% of Australians” are responsible, in large part, for the economic success of Australia.
It states that these households have “made significant gains over the last 15 years, with an average of over $150,000 per year per person, and that they have been able to accumulate significantly more wealth than their peers”.”
In recent years, the top 20 per cent has become the most powerful and influential class in Australia.””
This has allowed them to achieve more and more of the economic gains and privileges that they enjoy, and to have greater influence in the way that the economy operates and is run,” the economists said.
The AAs report further states that while the top one per cent may have “significant power”