Originally posted by jimmik
1. greater income inequality --> Gini coeff has increased
2. address issue through fiscal policy --> 2004 budget attempts to compensate low income earners with super contribution scheme and family assistance/benefits but favours high income earners with tax cuts
3. consequences are broad..maybe start off with tax cuts which increase spending, thus stimulating the economy...etc
That sums it up perfectly.
However some statistics and facts that could be used for evaluation include-:
1) In the early to mid 1980's Australia’s Gini Coefficient was at .281. Since the mid 1980's it has increased, standing at .311. Compared to Switzerland, Canada and France, Australia is more unequal, however it is more equal than the United Kingdom and America.
2) It's unlikely that Australia will reverse the changes in economic policy that have contributed to rising income inequality, most notably, the shift towards a more decentralised and deregulated labour market. This is because the government is pursuing other domestic issues, in particular inflation and unemployment. However there are strategies to improve income inefficiencies. These include reducing poverty traps caused by the interaction of the tax and welfare system, reforming the job network, creating a national jobs strategy, strengthening work entitlements, and raising the minimum wage. However you have to ask yourself, what impacts would these strategies have on the economy? For example if you raise the minimum wage you could cause cost push inflation.
