The Australian Prime Minister Kevin Rudd is seeking your opinion as a young economist on a number of economic issues. Write an economic report to the PM. Your report should carefully address the main issues, provide a logical ecoomic argument/rationale su

Executive Summary : Australia has seen an increasing divide between the wealthy and poor and income distribution has widened . The effects can be increasing unease between the affluent and the poor and can cause problems from lack of social integration to increase in crime . It can be seen that there was a period of economic growth and that government policy as well as social factors have an effect of increasing this disparity . I would agree that strong economic growth is to blame and that macroeconomics cannot be seen as the solution to the problem

as a number of factors exist

Australia has had considerable gap between the rich and poor and this gap has widened in recent years . Whilst the overall income has increased across the population a number of factors have created a super rich class and also created a very poor group . The economy has helped promote this and it will continue to do so unless change is implemented . Whilst Australia looks at other countries like the U .S and UK for answers to it problems one has to remember that this is a problem faced in these countries as well . Ability is not the factor that accumulates support and that 94 of the public claim that hard workers should earn more then those who don 't . It is simply matter luck if some are more intelligent and skilful then others (Aalberg , Toril .2003

In the 1995 -1996 period almost half of the income generated by economic growth benefited those in the top fifth which meant that it was of no benefit to the bottom four fifths of the population (Saunders br

.2003 .Inequality in incomes increased in the 1980 's . There is a theory that Australians are less accepting to equality and more likely to favour unequal distribution of wealth (Saunders ,

.2003 ) The intention of the Howard government was to increase indirect taxation rather then direct taxation . However this in effect favoured the rich who could work the system to their benefit but penalised the working class who couldn 't do anything about their level of tax (Gibson S .1999

Australia in the 1990s had economic growth at 2 .3 percent per capita per year and labour productivity has grown by 2 .9 per year yet unemployment at the end of the 1990s was high at more then 7 percent .It resulted in a wide distribution of income amongst the population Accordingly if regulatory barriers are reduced and blockages to competition are eliminated factors that are low in demand lose and in this case the demand for labour was low and so the inequality (Delong B .2000

There has been a demand for highly skilled workers and these types of jobs attract higher wages . The level of salary is determined by qualifications and experience and attracts people by a significant salary package . As more economic growth has occurred there has been more demand for high skilled workers but less demand for unskilled leaving these sectors in a...