Inequality in Australia 2015 - ACOSS

1 Inequality in Australia 2015. The first edition of Inequality in Australia , part of the Poverty and Inequality in Australia ' series from the Australian Council of Social Service. ACOSS | 1. Who we are. ACOSS is the peak body of the community and social service sector and the national voice for the needs of people affected by poverty and Inequality . Our vision is for a fair, inclusive and sustainable Australia where all individuals and communities can participate in and benefit from social and economic life. What we do. ACOSS leads and supports initiatives within the community and social service sector and acts as an independent non-party political voice.

2 By drawing on the direct experiences of people affected by poverty and Inequality and the expertise of its diverse member base, ACOSS develops and promotes socially and economically responsible public policy and action by government, community and business. Like our work? Support ACOSS today. ACOSS and our community of supporters share a vision for a fair, just, diverse and sustainable Australia . Your support is critical to support us to continue rigorous policy development and inclusive advocacy, placing this vision in the spotlight in public debate and policy making. Support us today in one of the following ways: Join the ACOSS Membership.

3 Organisations can become a member and join our network of community sector organisations advocating for a fairer Australia . Members play a vital role in shaping ACOSS policy and advocacy and amplifying the voice of the community in public debate. Members also receive a suite of membership services including sector-specific media and policy updates, access to advocacy, training and networking opportunities and more. Find out more on our website at Sign up as an Individual Supporter. Be part of the change. Add your voice to our cause as an Individual Supporter of ACOSS and we will keep you in the loop with regular policy and community sector updates and opportunities to take action.

4 Become a supporter today - sign up on our website. Make a donation. All donations to ACOSS go straight to our policy development and advocacy work. Donations over $2 are tax deductible. Make a donation on our website. Share this report. We know that strength lies in numbers. The more people who understand poverty and disadvantage in Australia , the better. Share this report with your network and help build the conversation about how we can reduce poverty and Inequality in Australia . Follow ACOSS on Twitter and Facebook. Inequality in Australia was published in 2015 by the Australian Council of Social Service: Locked Bag 4777.

5 Strawberry Hills, NSW, 2012 Australia Email: Website: ISSN: 1326 7124. Australian Council of Social Service This publication is copyright. Apart from fair dealing for the purpose of private study, research, criticism, or review, as permitted under the Copyright Act, no part may be reproduced by any process without written permission. Enquiries should be addressed to the Publications Officer, Australian Council of Social Service. Copies are available from the address above. About this report: This report is part of a series on Poverty and Inequality in Australia . It is based on research conducted by Peter Saunders, Bruce Bradbury and Melissa Wong at the Social Policy Research Centre of the University of New South Wales, and supplemented with data and analysis from other sources.

6 The main data sources are the ABS Survey of Income and Housing and the ABS Household Expenditure Survey. For further details on the data and research methods, see the methods paper available on the ACOSS website. The report was prepared by ACOSS policy and research staff: Ro Evans, Jacqueline Phillips, Peter Davidson, Penny Dorsch, and Equity Economics & Development Partners Pty Ltd, an economic and policy consulting firm. 2 | Inequality in Australia 2015. Contents Forewords 5. Executive summary 8. Key findings 10. CHAPTER 1: INCOME 11. 1. Distribution of income today 11. 2. Trends in income Inequality 18. 3. The reasons for increased income Inequality 20.

7 CHAPTER 2: WEALTH 30. 1. Distribution of wealth today 31. 2. Trends in the distribution of wealth 36. 3. The reasons for increased wealth Inequality 36. Appendix 1: Key terms 39. Appendix 2: A note on equivalisation and data definition 40. Appendix 3: Groups across the income distribution 42. List of figures Figure 1: Proportion of people in certain groups who are in households in the bottom 20% of the income distribution 13. Figure 2: Change in household Gini coefficient, OECD countries, 2000 to 2008 15. Figure 3: Income Inequality varies greatly across OECD countries and emerging economies 15. Figure 4: Share of national income, 2012 16.

8 Figure 5: Average weekly income after tax income by quintile, 2012 16. Figure 6: Trends in average weekly after tax income 1995 to 2012 18. Figure 7: Annual Percentage increase in weekly income 1995 to 2012 19. Figure 8: How the distribution of income changed, 1995 to 2012 (percentage point change) 19. Figure 9: Main income source, 2012 21. Figure 10: Average weekly before tax income from wages and salaries, 2012 22. Figure 11: Average weekly before tax investment and other income, 2012 23. Figure 12: Contribution to Inequality , 2012 25. Figure 13: Average weekly before tax income from government benefits, 2012 26.

9 Figure 14: Average weekly income: Newstart or Age Pension main income source, 1995 to 2012 27. Figure 15: Direct tax paid as a proportion of before tax income, 2010 27. Figure 16: Indirect taxes paid as a proportion of after tax income, 2010 28. Figure 17: Income and other taxes as a proportion of income, 2012 28. ACOSS | 3. Figure 18: Australia 's wealth, 2012 31. Figure 19: Wealth shares, 2012 32. Figure 20: Average wealth, 2012 32. Figure 21: Wealth by Asset Type 33. Figure 22: Average wealth in assets by wealth group, 2012 33. Figure 23: Distribution of wealth by asset type 34. Figure 24: Average wealth in assets by income group 35.

10 Figure 25: Average Wealth, Australia , 2004 to 2012 36. Figure 26: Increase in average wealth by wealth group, 2004 to 2012 37. Figure 27: Average wealth, 2004 to 2012 (2011-12 dollars) 38. Figure 28: Change in wealth shares 2004 to 2012 38. Figure : Australia 's population by age 43. Figure : Proportion of people in each income quintile by age, 2012 43. Figure : Australia 's population by family type 44. Figure : Proportion of people in each income quintile by family type, 2012 44. Figure : Australia 's population by labour force status 45. Figure : Proportion of people in each income quintile by labour force status, 2012 45.