Income inequality has been an issue in Australia for quite some time and it’s still an issue to this day. The overall income inequality has been rising since the mid 1990s despite having a sustained economic growth over the past 20 years. According to the Australian Bureau of Statistics in the household income survey conducted for 2011-12 year period, the wealthiest 20% of Australian households had 68 times higher net worth than the 20% of the least wealthy. That’s a pretty big gap in wealth inequality.

The gap between the top earners and the lowest earners in Australia is still present today. There are many efforts such as maintaining pro-growth policies, targeting the neediest and least wealthy when it comes to welfare, improving education systems, in place to battle income inequality but these efforts haven’t had much noticeable effect on the overall income inequality in Australia. The policy makers and government should also think of other ways to improve their efforts or find new ways to add on to the current policies.

Battling Income Inequality

Here are three egalitarian ideas mentioned by Andrew Leigh at the University of Wollongong recently:

  1. The new policy ideas should be reviewed and monitored under the equality lens. Whenever a new policy or a new project is introduced, it must go through Regulation Impact Statements, Health Impact Assessments, Regional Impact Statements, etc., but distributional effects are barely ever considered. Inequality needs to be better analysed and brought into the agenda to have a better effect on the inequality gap.
  2. The National Competition Policy should consider inequality to be added to the decision making process. The current competition law is still silent on the issues of income inequality. By considering inequality in the competition policy, there could be some noticeable difference on the margins such as the distribution of outlets in low-income neighbourhoods.
  3. Ethical behaviour must be proactively encouraged by firms and executives. Different companies have different salary margins between highest and lowest earners. Equity in salary and other benefits should always be considered and improved within the hierarchy of any company.

Income inequality has been a big issue over the past 20 years and it’s still a central issue today. Unless effective change isn’t implemented, this gap will continue to exist, if not grow stronger, over the next 20 odd years. This type of conversation about inequality is not just for the benefit of the disadvantaged Australians but for the betterment of a fairer society.