Forget the gloom, income and wealth for Australians have increased

With some fanfare earlier this week, the welfare lobby group Australian Council of Social Service (ACOSS) released a report framing a narrative of worsening inequality in Australian society.

Apparently, the degree of inequality in income and wealth is so bad that, according to ACOSS, we are ‘a nation divided’ with perilous consequences for our economy, our society, and even our democracy.

But if one has the forbearance to read through the gloomy ACOSS tale of Australian haves and have-nots increasingly fighting pitched battles with each other over shares of financial resources, one actually uncovers two important admissions:

  • Weekly incomes on average for all income groups increased between 1995 and 2012, with the bottom 20 per cent enjoying a 1.8 per cent per annum average boost to income (and top 20 per cent income increasing 2.3 per cent).
  • Average wealth increased for those in the bottom 20 per cent, on average, by three per cent between 2004 and 2012 (rising to 28 per cent for those in the top 20 per cent).
ACOSS_fig7

Annual percentage increase in weekly income, 1995-2012

To have incomes and wealth improving for all groups in Australia over time is surely something worthy of celebration, and is testament to the economic reforms which have contributed to continuous growth over the last twenty years or so.

And thanks to that same strong economy more resources can be directed to those in need, as illustrated by the fact that the average incomes of those primarily on Newstart or the Age Pension rose between 1995 and 2012.

Inordinately focussing on the distribution of income and wealth risks overlooking just how various aspects of living standards have improved for far many more Australians than the welfare lobby groups care to divulge openly.

For more about this vital policy issue, watch my presentation at the Australian Libertarian Society Friedman Conference delivered last month:

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