A Productivity Commission (PC) report on inequality in Australia has found significantly improved living standards over the past 27 years, but with poverty remaining unchained.
In its report, Rising Inequality? A Stocktake of the Evidence, the PC says the nation has done better than most people believe it has.
“While the perception often is that the glass is half empty, the most accurate picture that can be drawn from the data suggests that each generation is still better off than its predecessor,” Chair of the PC, Peter Harris said.
“Movements in inequality indexes are slight rather than serious.”
Mr Harris said the report brought together and took stock of the latest and most complete evidence measuring the level of and trends in inequality, mobility and persistent disadvantage in Australia.
Productivity Commissioner, Jonathan Coppel said it was important that not only is the distribution of income in assessing inequality looked at but also wealth and consumption are considered.
“For example, many retirees live on low incomes, but have high wealth, and many young adults have higher consumption than income,” Commissioner Coppel said.
The reports shows that Australia’s tax and transfer systems substantially reduce income inequality and that relative to other countries from the Organisation for Economic Cooperation and Development (OECD), Australia redistributed less income, but does a much better job of targeting this redistribution to low income earners.
The report also looks at economic mobility — the gauge of whether the rich always remained rich, and the poor always poor.
It found that mobility in Australia was higher than in most OECD countries — around 75 people in the top income group had moved to lower income groups 15 years later.
However, the rate of poverty in Australia was still about nine per cent despite many years of economic growth, and persistent disadvantage for a proportion of people in this group remained unaddressed.
The PC’s 156-page paper can be accessed at this PS News link.
