Bridging our growing divide: inequality in Australia The extent of income inequality in Australia

3 December 2014

© Commonwealth of Australia 2014
ISBN 978-1-76010-114-5

View the report as a single document - (PDF 3102KB)

View the report as separate downloadable parts:

Chapter 1 - Introduction: why does income inequality matter? (PDF 201KB)

Why does income inequality matter?
Figure 1.1: Should wealth and income be redistributed?
Figure 1.2: Less tax or more social services?
Australia's system of social security payments
The context of this inquiry
The conduct of the inquiry
The structure of the report

Chapter 2 - The extent of income inequality in Australia (PDF 990KB)

Measures of income inequality
Australian studies into income inequality
Table 2.1: Results of selected studies of inequality in Australia
Figure 2.1: Distribution of household net worth 2011 –12 (ABS 2012)[15]
Figure 2.2: Income inequality in Australia, 1982 to 2011
Figure 2.3: Gini coefficient for the States[24]
Figure 2.4: Real growth in household gross income between 2003 –04 and 2011–12 by decile: WA and Australia[28]
Table 2.2: Income inequality in Australia and OECD averages, 2000 –2012
Figure 2.5: Gini coefficient for equivalised disposable household income in Australia, the US, the UK and Canada
Table 2.3: Trends in different income inequality measures (OECD 2011)[33]
Figure 2.6: P90/P10, P80/P50 and P80/P20 ratios in Australia (1994 –95 to 2011–12)[35]
The 2013 Productivity Commission report
Figure 2.7: Movements in the distribution of individual labour income, 1988 –89 to 2009–10
Figure 2.8: The percentage change in labour income decile from 1988 –89 to 2009–10
Figure 2.9: Gini coefficients for capital, market and labour income
The top 1 per cent income share
Figure 2.10: Income share of the top 1, 0.5 and 0.1 per cent in Australia from 1921 –2010[46]
Submitters' and witnesses' views on poverty in Australia
Diagram 2.1: Highlights of the Foodbank Hunger Report 2014
Social mobility

Chapter 3 - Impact of income inequality on access to services and entrenching disadvantage (PDF 409KB)

Figure 3.1: Percentage of individuals suffering from heart disease within different household income groupings (Korda et al, 2014)
Figure 3.2: Percentage of individuals suffering from diabetes within different household income groupings (Korda et al, 2014)
Figure 3.4: Percentage of individuals suffering from depression within different household income groupings (Korda et al, 2014)
Figure 3.5: Comparison of labour force statistics between young people (15 –24yrs) and all people (15–64 yrs) on August 2013[132] (ABS 6105.0 & 6202.0)
Figure 3.6: Participation in childcare services for children aged under 3  years related to OECD average of 22.9[152]
Figure 3.7: Sole parent employment rate related to OECD average of 70.6%[153]

Chapter 4 - The impact of income inequality on disadvantaged groups (PDF 463KB)
Chapter 5 - 2014–15 Budget impact on income inequality (PDF 448KB)

Analyses of the 2014–15 Budget
Figure 5.1: Measures proposed in the Budget will disproportionately hurt low income people
Figure 5.2: The effect on low income earners grows: the effect on high income earners disappears
Figure 5.3: The Budget affects low income earners the most
Table 5.1: SA2 Impact on family disposable income, Families with children, Australia
Table 5.2: SA2 Impact on family disposable income, Families with children, South Australia
Figure 5.4: Countries with similar levels of pre-tax inequality can have very different post-tax inequality
2014–15 Budget measures in the Social Services portfolio
Table 5.3: Poverty Lines: Australia, June Quarter, 2014a, b
Table 5.4: Comparison of Henderson Poverty Lines with the income of adults who receive maximum welfare payments and have no other income, June Quarter 2014
Figure 5.5: Newstart, the Henderson Poverty Line, and the 50 per cent of median income poverty line
Figure 5.6: Percentage of individuals who delay or did not use service due to cost by level of disadvantage (ABS 4839.0, 2011–2012)

Chapter 6 - The principles that should underpin social security payments and practical measures to address inequality (PDF 495KB)

The principles underpinning the provision of social security payments
Figure 6.1: Newstart, the HPL and the 50% of median income poverty line
Figure 6.2: Newstart as a proportion of two poverty lines
Figure 6.3: Deprivation by income source, 2006[17]
Figure 6.4: Top and Bottom Income Quintiles: Ratio of Transfers to each
Other practical measures to address income inequality
Table 6.1: Individuals with net rental income less than $0, by taxable income, 2012–13 income year
Table 6.2: Investor Housing Leverage and Debt Serviceability, (Households with investor housing debt, by disposable income quintile, 2010
The liability investment approach
Figure 6.5–Movement from the 2012 current client liability to the 2013 current client liability

Australian Greens' Additional Comments (PDF 22KB)
Coalition Senators' Dissenting Report (PDF 36KB)

Extent of Income Inequality in Australia
The impact of income inequality on access to health, housing, education and work in Australia, and on the quality of the outcomes achieved
Budget Context

APPENDIX 1 - Submissions and additional information received by the Committee (PDF 35KB)
APPENDIX 2 - Public hearings (PDF 21KB)

Committee Secretariat contact:

Committee Secretary
Senate Standing Committees on Community Affairs
PO Box 6100
Parliament House
Canberra ACT 2600

Phone: +61 2 6277 3515
Fax: +61 2 6277 5829