Assets, ow nership and public services Tom Bentley 17 th March 2007 Santiago

Assets, ownership and public services

Tom Bentley

17th March 2007Santiago

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Outline

Global distribution of asset ownership

Impact of changing returns to capital and labour

Ways of thinking about assets and policy opportunities

Links between asset formation and participation

Opportunities for public service reform

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Land area

Source: worldmapper.org

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Wealth increase 1975-2003

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Housing prices (ppp) 2002

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Primary education spending growth 1990-2001

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International licence fees and royalty exports 2002

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Global inequality

Source: wikimedia commons

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Figure 6 Growth rates 1979-1998

0.0

0.5

1.0

1.5

2.0

2.5

Australia UK US NL France Canada NZ CH

Annu

al a

vera

ge g

row

th ra

te

Maddison GDP per capita at PPS

Personal income at constant prices

** denotes per tax unit

**

*

*

Source: Tony Atkinson

Asset ownership shapes the distribution of growth

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Source: Tony Atkinson

Figure 5 Median as % mean in US

50

55

60

65

70

75

80

85

90

95

100

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Med

ian

tax

unit

inco

me

as %

mea

n ta

x un

it in

com

e

Current Population Survey Household Gross Income

Income tax data Tax Unit Gross Income

US Median income grew at 0.5-0.7% per year less than mean income

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Inequality growth is compound: left alone, rich get richer

Globalisation of equity, product, job markets broadens spread of outcomes, raises entry barriers and therefore deepens marginalisation: access to savings vehicles, housing ownership, personal and business credit all relevant.

Material and financial assets intertwine with intellectual and social capital; in particular, as returns to skill increase, investment in human capital increases as a long term influence on life chances

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The role of assets

Spreading financial assetsIntegrated lifetime accounts

Individual Development AccountsChild Trust FundPension reformSkills and education accounts

New credit and property instruments

Microcredit, Grameen Bank De Soto property rights

Shared equity and self build housing schemes

Public finance and institutions Australia: Future FundChile: Economic and Social Stablisation Fund

Norway, Canada, long term funds from oil revenues

Participative public servicesInstitutions which encourage long term asset formation by sharing responsibility and investment:

Health, work, learning, saving

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Victoria’s National Reform Agenda: productivity and participation

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The potential of human capital investment for participation

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Successful system design depends on overlapping fields of participation (and the quality of their institutions)

Economic

SocialDemocratic

Role of intermediary institutions in shaping choices, enabling asset formation, mobilising participation, is crucial

State’s role is increasingly to shape the environments in which market choices are taken and capabilities formed

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Link to public services: a source of institutional innovation

Community asset ownership: buildings, public spaces, organisations

Personalisation of services Direct participation and dialogue across communitiesSocial partnership for income distribution and ‘good work’ agenda

Shared investment vehicles for asset accumulation

Deliberative participation in everyday settings

Public service framework focused on human capital formation as well as security

Tom.Bentley@dpc.vic.gov.au