Republican presidential candidate Donald Trump’s strategy has given voice to the disillusioned in the US. Picture: Evan Vucci

Former Treasurer Wayne Swan argues income inequality is the biggest threat to political and economic stability and that it encourages “a lurch to the right” as seen in the US.

His warning came as it was confirmed fellow Queenslander Pauline Hanson’s One Nation, whose political stance matches many of those outlined by Mr Trump, will have four senators in the new Parliament.

While wage growth had stalled, Mr Swan said the “increasing use of tax havens by multinational corporations and high wealth individuals has reached epidemic levels”.

“Economic inequality is leading to economic and political polarisation,” he said in a speech to the Queensland Fabians last night.

This type of rift had allowed US Republican presidential candidate Donald Trump to “lurch to the right” with a campaign “stoking xenophobia and economic insecurity”.

“And this global trend dwarfs a standard discussion of economic policy,” said Mr Swan.

Mr Swan said so far Australia had not gone down the American road, but a detour in that direction was possible.

“Middle income (Australian) households are more than 50 per cent better off than they were in 1995 while there have been no gains for middle incomes in the US,” he said.

However, he said the global trend was taking hold here.

“The growth in the incomes of the bottom 90 per cent of industrialised countries’ workforces has slowed down almost everywhere for the last 30 years except in Australia and Sweden,” said Mr Swan.

“But now it appears even we are succumbing to this trend.

“The share of wages in national income is falling in most countries and wage growth is falling behind productivity growth.”

He said: “Around the world voters are justifiably in revolt at the obscene levels of wealth and income concentration and the political power wielded by the beneficiaries.”

Mr Swan said there was an increasing concentration of wealth and attempts to cut Australian wages to those of low-income countries.

“Middle income (Australian) households are more than 50 per cent better off than they were in 1995 while there have been no gains for middle incomes in the US,” he said.

He accused Prime Minister Malcolm Turnbull of having an economic plan which “consists of cutting corporate taxes, crossing his fingers, closing his eyes and hoping for the best”.

“While trickle-down economics insists on drawing a dichotomy between the speed of growth and the spread of growth, the idea of inclusive prosperity acknowledges the empirical evidence that countries which grow more equally will grow more strongly,” he said.

“As Michael Cooney, Executive Director of the Chifley Research Centre, puts it, ‘if only 10 per cent of people win when the economy does, well, 10 per cent of people will care if the economy does well’.”

Mr Swan also criticised Labor’s election policy for not aggressively attacking the use of offshore tax schemes by the wealthy.

“In my view, had Labor been stronger in prosecuting the double standards of corporate community and the Liberal government in fleecing Australian tax payers through the use of tax havens, our inclusive prosperity message would have been more powerful and our political momentum stronger,” Mr Swan said in a speech last night.

He didn’t name the Prime Minister, but Mr Swan’s comments echo those of other ALP figures who wanted a stronger campaign focus on Malcolm Turnbull.

Mr Turnbull uses legal investment structures in the Cayman Islands and pays Australian tax on all earnings, but is portrayed by critics as a tax avoider.

Mr Swan believes the “increasing use of tax havens by multinational corporations and high wealth individuals has reached epidemic levels”.

“In my view, had Labor been stronger in prosecuting the double standards of corporate community and the Liberal government in fleecing Australian tax payers through the use of tax havens, our inclusive prosperity message would have been more powerful and our political momentum stronger,” Mr Swan said in a speech last night.

He didn’t name the Prime Minister, but Mr Swan’s comments echo those of other ALP figures who wanted a stronger campaign focus on Malcolm Turnbull.

Mr Turnbull uses legal investment structures in the Cayman Islands and pays Australian tax on all earnings, but is portrayed by critics as a tax avoider.