Examining Recent Changes in Income Distribution in Australia

This paper analyses recently released ABS data on the distribution of income and examines how inequality has changed since 1994–95 and since the election of the Howard Government in 1995–96. While real disposable incomes increased across the distribution, income inequality has also increased since 1994–95, particularly between 1996–97 and 1999–2000. Over the entire period from 1994–95 to 2000–01, mean income in the top quintile increased by $111 a week, more than eight times the increase of $13 a week in the lowest quintile. Since the Howard government came to office, the estimates indicate that almost half (47.3 per cent) of the total increase in disposable income was received by those in the top quintile — implying that half of the income generated by economic growth has been of no benefit to the bottom four-fifths (in income terms) of the population. Comparison with earlier research also shows that income inequality has, in some respects, increased more rapidly since the mid-1990s than during the 1980s.