ACOSS, in partnership with UNSW Sydney, released the latest Inequality in Australia Report on Tuesday 31 July 2018.
The main report provides a non-technical overview of income and wealth inequality in Australia, including average incomes and wealth holdings for households on different rungs of the income and wealth ladders, changes in inequality since 2000, and how we compare internationally.
The supplementary report on income inequality here explores in more detail the main causes of income inequality (by breaking income down into earnings, investment income, social security and income tax), and where different groups (for example, sole parents, people receiving Newstart Allowance, and people with income from superannuation) are located on the income ladder.
The factsheet provides a four page summary of the key figures.
Want to find out where your household stands on the income ladder? The answer might not be what you think! Check out the OECD inequality calculator.
How unequal is Australia?
The answer is surprising – many people would be surprised to find out how unequal Australia actually is.
This report revealed that, in terms of income inequality:
- Someone in the highest 20% of the income scale lives in a household with five times as much income as someone in the lowest 20% of the income scale.
- Even more extreme, someone in the highest 1% of the income scale lives in a household with an average weekly income that is 26 times the income of someone in the lowest 5% of the income scale.
To put it another way – someone in the highest 1% earns more in a fortnight than someone in the lowest 5% earns in an entire year.
In terms of wealth inequality:
- People in the highest 20% of the wealth scale hold nearly 2/3 of all wealth, while those in the lowest 50% hold only 18% of all wealth.
- The average wealth of a household in the wealthiest 20% is five times that of the middle 20% and almost a hundred times that of the lowest 20%.
Australia has the 5th highest number in the world of people with ultra high wealth (more than US$50 million).
Income shares in Australia
Wealth shares in Australia
Why is inequality a problem?
Excessive inequality in any society is harmful. When people with low incomes and wealth are left behind, they struggle to reach a socially acceptable living standard and to participate in society. This causes divisions in our society.
Too much inequality is also bad for the economy. When resources and power are concentrated in fewer hands, or people are too impoverished to participate effectively in the paid workforce, or acquire the skills to do so, economic growth is diminished.
There are two main ways to measure inequality
- Income inequality: how much income is received by a person or household.
- Wealth inequality: how much wealth is held by a person or household.
Wealth inequality is higher in Australia than income inequality.
Faces of inequality
Some groups are more likely to be in the lowest 20% income group due to circumstances:
- People who are unemployed: 77% are in the lowest 20% income group;
- Single parents: 36% are in the lowest 20% income group;
- People aged over 65: 39% are in the lowest 20% income group;
- People born overseas in non-English speaking countries: 24% in the lowest 20% income group;
- Newstart allowance recipients: 63% of Newstart recipient households are in the lowest 5% of incomes.
 Percentages refer to households in which the main reference person belongs to the group in question.
How do YOU fare in the income inequality spectrum?
Launch of Inequality in Australia 2018
The report was launched at UNSW on Tuesday 31 July 2018. You can watch the launch above (starting from about 27 minutes in).
Inequality in Australia 2018 in the Media
- Wealth disparity between old and young Australians grows Barbara Miller, ABC RN AM, Tuesday July 31, 2018
Australia’s richest 20% own almost two thirds of country’s wealth, report finds Michael McGowan, The Guardian, Tuesday July 31, 2018
- Australia’s one per cent gets richer as wealth inequality grows AAP, SBS News, Tuesday July 31, 2018
- Young Australians increasingly divided as dreams of home-ownership dim Jessica Irvine, Sydney Morning Herald, Monday July 30, 2018
- Report highlights income inequality Eleanor Hall, ABC RN The World Today, Tuesday July 31, 2018
- Top Earners Get As Much In Two Weeks As Poorest Do In A Year Josh Butler Ten Daily, Tuesday July 31, 2018
- New Report Says Wealth Inequality Increasing in Australia Luke Michael, Pro Bono Australia, Tuesday July 31, 2018
Download Inequality in Australia 2018 resources
ACOSS would like to thank the following organisations for their assistance with Inequality in Australia 2018:
About the Poverty and Inequality Partnership
ACOSS and UNSW Sydney recently entered a major new five-year Poverty and Inequality Partnership. This partnership will result in the publication of updated Poverty and Inequality in Australia reports until 2022, of which Inequality in Australia 2018 is the first, and support interdisciplinary research and policy development on these issues. Poverty in Australia 2018 will be published later in 2018.