Australia’s rich get richer while poor bear the brunt of the economic downturn

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January 27 2021
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The COVID-19 pandemic has seen Australia’s 31 billionaires increase their fortunes, while Australia’s poorest could take up to a decade to recover from the economic downturn.

Australia’s rich get richer while poor bear the brunt of the economic downturn

Stats collated by Oxfam showed that Australia’s rich have increased their wealth by nearly $85 billion since the global pandemic was announced in January.

While the pandemic has been a boom for the very top, Australia's unemployment has skyrocketed, with nearly 3 million people receiving some form of government benefit, including the JobKeeper or JobSeeker programs.

Oxfam Australia chief executive Lyn Morgain said that in the context of the country’s first recession in almost 30 years, this extreme inequality was particularly shocking.

“As hundreds of thousands of people were losing their jobs and entering an incredibly unstable employment market, this small group of elite Australians saw their incomes recover very quickly, before beginning their upwards trajectory once more,” Ms Morgain said.

Ms Morgain highlighted how wealth inequality could take a decade to recover from, as policymakers withdraw support despite the unemployment rate remaining above pre-COVID levels.

“While the government should be congratulated for acting quickly to implement wage subsidies and other social protection measures last year, the inappropriate and unfair reversal of the increase to JobSeeker payments is a cruel blow to the poorest Australians and, according to unions, has left 1.4 million people living on as little as $51 a day.”

The four Australian economists who took part in the survey agreed the coronavirus crisis would lead to an increase or major increase in income inequality, with the $85 billion in created wealth able to give 2.5 million poorest Australians a one-off payment of just over $33,300 each.

The economist agreed it was the sharpest increase in inequality in at least 50 years, with women and ethnic minorities likely to feel the impact the most.

Ms Morgain said that inequality in Australia especially stands out when comparing the incomes of Australia’s 10 highest-paid CEOs with healthcare workers that were needed during the pandemic.

“We found that it would take a nurse 259 years to earn what a top Australian CEO earns, while a CEO could earn the annual salary of a nurse in 1.3 days,” Ms Morgain said.

“The critical nature of the work of all of our healthcare workers who continue to tackle this crisis, as well as how that work has been undervalued in the past, has rarely been more apparent in the Australian community as it is now.

“This global emergency has truly laid bare the entrenched injustices of our current economic system, which only serves to deepen inequality, particularly in times of crisis.”

Worldwide Oxfam’s report found the 1,000 richest people on the planet recouped their COVID-19 losses within nine months, while it could take more than a decade for the world’s poor to recover from the pandemic.

The world’s 10 richest men have seen their combined wealth increase by half a trillion, which Oxfam states is enough to pay for the COVID-19 vaccination.

At the same time, the pandemic has ushered in the worst job crisis in over 90 years, with hundreds of millions of people now underemployed or out of work.

“We stand to witness the greatest rise in inequality since records began. The deep divide between the rich and poor is proving as deadly as the virus.

“Globally, women and marginalised racial and ethnic groups are bearing the brunt of this crisis. They are more likely to be pushed into poverty, more likely to go hungry and more likely to be excluded from healthcare,” Ms Morgain concluded.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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