Economic Divergence in Australia

Economic divergence in Australia – it is an issue that I feel all Australians should be aware of and deal with, because if the gap is not bridged, then Australia's economic prosperity and social fabric will be under serious threat. Evidence of this divide is seen with the differences in unemployment rates and household income between the urban and rural regions. Australia's economy has sent inner-city employment levels through the roof - thousands of millionaires created each year by exploding real estate prices in Sydney and Melbourne have helped to feed a huge retail boom. This, however, goes only so far - there is a 'dark' side to our prosperity - Australia is experiencing a wealth divide, and areas in the bush and other rural communities are struggling for survival.

Evidence may also be found in the city, where suburbs a few kilometres apart differentiate enormously in terms of income and unemployment rates. Take the bush, for example, where reliance on a single industry and a shortage of services creates a wealth of problems. Not only this, but low prices for key commodities such as wheat and wool is making life very tough for many rural communities across Australia. In terms of unemployment, the number of jobs in rural and mining areas has been on the decline and particularly in the past 15 years. At the other end of the spectrum, outlying suburbs of Sydney and Melbourne still face unemployment rates of above 10% because of the cutting back of employment in traditional industries such as textile, clothing and footwear, and vehicle manufacture. This can plainly be seen in Elizabeth, north of Adelaide, where almost one in four of those seeking work are unemployed and the suburb remains heavily dependent on the car industry.

In terms of statistics, a huge contrast is evident with the unemployment rate in the Murraylands in South Australia at 11.3%, against the minute 2.9% in the inner-west of Sydney. This is underlying evidence of the variance between city and bush. The growing chasm may also be seen with the differences in household income, where in an area such as the Wide-Bay Burnett region in Queensland has barely half the household income of inner Sydney. It is predicted that during the next five years, many regions of Australia will struggle to achieve increases of household income of up to $1000, while the 'global' city segments of Melbourne and Sydney can expect increases of between $6000 and $8000, an enormous contrast. Such differences as these can be seen significant contributors to the 'Great Dividing Range' between the urban and rural areas. However, there are things being done to prevent such a contrast, and governments are continually considering regional inequalities. Increased expenditure in rural areas, ranging from the $1.5 billion national heritage trust to the $1 billion Telstra 2 social bonus, is unequivocal evidence of this.

The national government has announced it will proceed with infrastructure spending for the Alice Springs-to-Darwin railway, and initiatives such as rural transactions, enhanced internet access, rural research and scholarships for country students have the potential to improve life for remote communities. But then the glaring fact remains that there are still many, many suburbs and regions of Australia with unemployment rates above 10%, and low household income. Moreover, it is of no use to go into these areas and give lectures about welfare dependency. Living on unemployment benefits is most definitely not a high standard of living, especially when most Australian parents aspire for their children to do better in life. The best social security in Australia is undoubtedly the wages cheque. Reducing the economic divide requires long-term commitment; there is no simple solution or magic formula that will immediately solve the problem. Increased spending in regional areas will go a long way towards eventually reversing an imbalance between city and bush. Much can be achieved through an innovative policy development and strong leadership.