Democracy is faltering. Elected government action is increasingly constrained by the preferences of powerful industrial, commercial and financial interests. To counter this trend, an ambitious initiative, Reclaiming Democracy Together, is being launched in Melbourne on 9 May.
At its core, democracy is among humanity’s noblest dreams. Sadly, the political systems that currently prevail in much of the Western world are far removed from democracy’s foundational principles. Australia is no exception.
Here are some examples. In Australia, the approaching climate catastrophe has been met with continuing reliance on a fossil fuel model of energy security. Since the failure of the Voice referendum, the Labor government has been strikingly silent about the task of reconciliation with the First Nations, or a timetable for Treaty and Truth Telling.
As for the AUKUS pact and the accompanying bill of some $368 billion, engagement with the public has been minimal at best. On this, as on so many other fronts, crucial decisions are being made largely behind closed doors, while parliamentary debate languishes in irrelevance and politicians content themselves with uttering bland slogans and trading insults.
Political processes, important as they are, cannot be viewed in isolation from the functioning of the economy. In a democracy, the economy is meant to serve two closely related objectives: meeting basic human needs and providing citizens with the capacity for meaningful civic engagement. If the crisis of democracy has reached new heights, it is in no small measure a reflection of the global ascendancy of the neoliberal economic order.
Over the last several decades many parts of the Western world have experienced unprecedented levels of economic inequality, but few countries have witnessed the speed and scale of the rise of inequality in Australia. The rich-poor divide is stark enough when it comes to income disparity, but nowhere near as stark as when viewed through the prism of wealth.
Drawing on figures released by the Australian Bureau of Statistics, a 2023 analysis found that the lowest 20 per cent of households earned just 4 per cent of all income, while the highest 20 per cent accounted for 48 per cent of total income.
However, the true scale of inequality becomes fully apparent only when we consider wealth distribution. The lowest 20 per cent of Australian households accounted for just 1 per cent of Australia’s national private wealth, whereas the highest 20 per cent owned 63 per cent of the wealth.
The sharp divide reaches dizzying depths when we turn our attention to the meteoric rise of the country’s billionaires. Oxfam estimates that their number doubled from 74 in 2015 to 161 in 2025, while total billionaire wealth grew on average by $137 million per day or $95,000 per minute. According to the Australia Institute, the total wealth of the richest 200 Australians stood at $625 billion, having risen from the equivalent of 8.4 per cent of the nation’s GDP in 2004 to 23.7 per cent of GDP in 2024.
The glaring and rising inequalities of wealth and income that now typify Australia and, to varying degrees, other Western economies can be explained in one of two ways: either the state is structurally reconciled, pragmatically or ideologically, to this unequal outcome, or it is subjected to powerful pressures beyond its control, which effectively limit its sovereignty and capacity to act.
The state, it is true, generally retains the power to make authoritative decisions and thereby endow them with a degree of legitimacy, but the processes by which these decisions are made normally reflect the arithmetic of power, influence and wealth prevailing at any given time.
Simply put, the state’s freedom of action is increasingly constrained by the preferences of powerful industrial, commercial and financial interests, often transnational in organisation and reach, whose decisions play a pivotal role in the functioning of economy and security.
This underlying trend has reached new heights with the privatisation and deregulation push that got under way in the late 1970s and early 1980s, and has since become the hallmark of neoliberal economics under both conservative and social democratic governments.
A few core propositions have become dominant guidelines for economic policy:
- Markets are better equipped than governments to put human capital to productive use and to generate and allocate resources to that end.
- Wherever possible private entities should have a free hand in the movement of goods and services, people, capital and technology.
- The priority of government should be to support privately generated growth in the economy.
- Therefore, the primary function of government is to oversee the twin processes of privatisation and deregulation, which in turn require lower taxes and corresponding constraints on public spending.
The pointed refusal of the Albanese government to introduce a widely supported flat tax on gas exports or a super profit tax on the gas industry’s windfall profits is a case in point.
But there is more to these trends than the subservience of government to business demands and expectations. The relationship between state, society, economy and the individual has itself undergone a profound change. Increasingly, the individual has come to be viewed first and foremost as consumer rather than citizen, with the state acting as principal facilitator of this transition.
Over time, the atomising effects of privatisation, deregulation and poorly planned technological innovation have been especially acute. In this they have been aided and abetted by an exploding advertising industry that subtly but effectively connects self-worth to a consumerist existence and a polarising social media landscape that isolates at least as much as it connects.
These unwelcome trends have now opened the door to populism, white supremacism and the rise of far-right parties. Perhaps for the first time, far-right and populist parties, once fringe movements, are simultaneously topping the polls in France, the UK and Germany.
Almost everywhere in Europe, governments, anxious not to be outflanked by an ascending far-right, are introducing more restrictive migration policies and harsher laws for dealing with refugees and asylum seekers. In Australia, the response of the Labor and Coalition parties to the rise of Hansonism is another expression of this trend.
Trumpism itself, especially in Trump’s second term, points in the same direction, in even more troubling fashion because of the brutal use of force that accompanies it.
There is no point sugarcoating the pill. Democracy everywhere is faltering. Fortunately, innovative initiatives for democratic renewal are beginning to take root across the Western world. In Australia, Conversation at Crossroads, in consultation with other groups and networks, is committed to reversing the democratic deficit.
On Saturday 9 May, it is launching a seven-year project, Reclaiming Democracy Together, co-sponsored by several organisations including, notably, Pearls and Irritations. The event is being held at the Melbourne Town Hall, and with only a few tickets left it is fast approaching capacity attendance. However, the option of online participation will remain open till Friday evening. Full details, including program and registration, are available here.
Joseph Camilleri is Emeritus Professor at La Trobe University in Melbourne, a Fellow of the Australian Academy of Social Sciences, Convener of Conversation at the Crossroads, and Co-Convener of SHAPE (Saving Humanity and Planet Earth)
Eddie Kowalski
Eddie Kowalski is a civic-innovation leader focused on strengthening democratic participation. His background in market, social, and policy research has focused on helping governments and organisations build feedback loops from stakeholders.