Peter Boyle
Tucked away in the business supplement of the August 16 Sydney Morning Herald was this cheerful news: "The rich are spending like there's no tomorrow.
"Upmarket retailer David Jones has reported a surge in fourth quarter sales growth as tax cuts and superannuation changes favouring the rich outweigh much talked about negatives of higher petrol prices and rising interest rates.
"Boss Mark McInnes said DJs' typical well-heeled shoppers returned to the shops in the second half and hadn't blinked at the two interest rate rises this year ...
"Last month DJs raised its profit guidance for 2006, saying it would rise as much as 32 per cent."
On the other side of the tracks it's a different story, added the article by Michael Evans:
"It's a stark contrast to recent comments from Woolworths boss and Reserve Bank board member Roger Corbett, who described the conditions facing his discount Big W chain as the toughest he'd seen in years.
"Specialty retailers relying on discretionary spending have reported tough conditions in the past 12 months as consumer confidence is buffeted by petrol prices and interest rates."
The very next day, a gloomy headline in the same newspaper proclaimed: "Consumer hopes dive as prices weaken pay rises".
"The Westpac-Melbourne Institute consumer sentiment index tumbled 16.2 per cent this month in response to record petrol prices and an interest rate rise", reported economics correspondent John Garnaut.
"The last time it fell that far was in June 1989, when interest rates were nudging 18 per cent on the way to triggering a recession."
Life is getting tougher for most of us, but the rich are living it up. All this illustrates the massive income and wealth transfer to the rich that has been carried out in the "Lucky Country" in recent decades. At the start of the 21st century, the income share of the richest was higher than it had been at any point in the previous 50 years, according to a study by academics Andrew Leigh (ANU) and Anthony Atkinson (Oxford).
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