International Herald Tribune
Tall poppies flourish Down Under
Monday, February 26, 2007

SYDNEY: A battle has been joined over whether a quiet corner of Rose Bay, one of this city's toniest harbor-side suburbs, be turned into a marina for mega yachts of up to 35 meters.

On the one side are most local residents, beach goers and the owners of the small boats which occupy swing moorings. On the other, a clutch of owners headed by Australia's richest man, James Packer, worth some $5 billion as the inheritor of a gambling and media empire.

They want to park their giant motor yachts, which are too big for Sydney's main big sailing yacht marina just two bays away, in this upmarket eastern neighborhood rather than at an alternative spot in the downmarket western suburb of Rozelle.

The latter will likely win the battle, which will then become another metaphor for the deep social changes that Australia has undergone since the early 1980s.

Attitudes and expectations that were once regarded as typically Australian have withered as big money has become ever more influential. Here in New South Wales money power has been increased by the state government acquiring powers to overrule local planning and environmental decisions.

Top of the decline list is what is know as the "tall poppy syndrome," a phrase used to denote the ordinary Australia's lack of respect for wealth, power and assorted pretensions. Tall poppies could once expect to be cut down. This social leveling attitude went hand in hand with belief in concepts such as giving everyone a "a fair go."

This was a working man's country which believed — in theory at least — in a fair distribution of income and wealth, thanks in part to some of the world's most highly unionized workers plus a highly formalized system of wage bargaining and of compulsory arbitration of labor disputes.

But where once the "tall poppy syndrome" was a source of pride for many Australians, it is now widely viewed as an obstacle to success, wealth creation and excellence. None other than prime minister John Howard has argued, "If there's one thing we need to get rid of in this country it is our tall poppy syndrome."

True or not, what is incontestable is that decline of the syndrome has been accompanied by a huge widening of income and wealth gaps in Australia. That is a phenomenon that Australia shares with most developed economies, but it is especially noticeable here given the previous "fair go" attitudes.

There have been many reasons for this. The steady opening-up of the economy from the early 80s onward speeded the decline of unionized manufacturing. Imports of Asian cars, electrics and clothes boomed and Australians shifted to service industries. Immigration from southern Europe and Asia enlarged the small business class at the relative expense of the Anglo-Celtic migrants among whom unionism was strong. Privatization of government owned businesses reduced union power.

And most recently the government itself implemented workplace reform legislation which weakened labor rights in the name of flexibility and lower unemployment.

But there has been another factor adding to the wealth gap. Over the past 30 years, land and house prices have increased at two to three times that of disposable income, resulting in a huge shift in wealth, disadvantaging latercomers to the housing market and leaving a large minority out of the asset bonanza.

Now 30 percent of households are estimated to have zero net worth. Adding to the problem is "negative gearing" — system of tax relief on mortgages which has enabled a large minority to acquire multiple properties.

Australia has had 15 years of rapid economic growth, erosion of the "tall poppy syndrome" and the emergence of a quite substantial class of the very rich.

The downside is a huge foreign debt, high household debt levels and increased numbers, particularly of children, living in poverty.

Australia once looked much like Scandinavia in terms of wage equality, social welfare and minimum living standards. It still has an excellent health system, but otherwise increasingly it looks like America.

There is much to admire about contemporary Australia. But let's hope the tall poppy syndrome revives and the mega-yacht brigade does not succeed in privatizing a public asset on Sydney's stunning harbor.