Wealthy urged to support those in need

WEALTHY Tasmanians who have prospered since the global financial crisis could be doing more to alleviate the state's worsening cost of living crisis, a new report says. 

The University of Tasmania report found that the state's poorest 20 per cent of households don't have enough money to buy the necessities of life, forcing them to ration spending on electricity, food or health services and become more and more reliant on debt and charity. 

In contrast, families in the top 20 per cent for income have seen their discretionary income increase by about 30 per cent since 2006. 

The report stops short of ``advocating overtly redistributive policies at a state level'' but recommends that high income earners be encouraged to spend and invest in Tasmania and support those in need. 

``The need for this is particularly acute given the deep-seated structural forces  which are exacerbating inequality at both the state and national levels,'' the report states. 

The report also warns that political parties will need to take risks to tackle the cost-of-living crisis. 

Report co-author and University of Tasmania politics program director Professor Richard Eccleston said he wanted to counter the myth that the global financial crisis was to blame for cost-of-living pressures. 

Dr Ecclestone said the problem would not naturally go away and would require future government to make difficult decisions. 

The report argues that structural change is needed to address the complex underlying causes of the problem. It names a 66 per cent rise in electricity charges since 2008 as one of the main causes for the crisis and urges the state government to develop a sustainable regime whereby utility prices are constrained by consumers' ability to pay. 

``There is a clear need to address the broader structural causes of cost-of-living pressures rather than treating their symptoms.

``The long-term goal is to ensure that utility companies and service providers are financially sustainable while ensuring that price increases don't exceed income growth in the communities they serve,'' Dr Ecclestone said. 

Other recommendations include targeting concession programs better and collecting more comprehensive data on state-level household income and expenditure patterns.

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