This research was conducted as part of a broader forum on the threats to democracy, hosted by the Royal Society of New South Wales.
The paper argues that inequality – particularly when it is extreme or seen as unfair – threatens democracy by undermining support for the social contract. In particular, the level of inequality influences: 1) the degree of economic opportunity; 2) notions of fairness; 3) support for redistribution; and 4) the generational divide in social cohesion. A broad perspective on inequality is needed to understand these issues. While there is little evidence of a major shift in economic inequality in Australia, there is a growing perception that intergenerational economic opportunity is lacking. The paper speculates that much of this can be understood though the lens of housing insecurity in Australia.
Policy makers need to adopt an intergenerational perspective when assessing the likely impact of future policy and ensure that policies mitigate rather than amplify inequality.