Back to All News

Senate Inquiry begins scrutiny of Australia's growing inequality

Media Release
Rachel Siewert 18 Sep 2014

The Senate Inquiry into the extent of income inequality in Australia begins public hearings in Melbourne today. Senator Rachel Siewert, Chair of the Community Affairs References Committee and Australian Greens spokesperson on family and community services moved for the inquiry due to growing public concerns about inequality and the Government's budget measures.

"Inequality is a critical social issue, but as well as being a matter of fairness, it is also an important economic issue, especially as the Government looks to make a range of sweeping change to income support and social security," Senator Siewert said today.

"I moved for this inquiry because of growing community concerns about inequality and the Government's approach to policy making in this area. The McClure Review and Commission of Audit have been relatively closed processes, and have not adequately examined the underlying causes of disadvantage or issues around inequality.

"Submissions to the inquiry suggests that ABS income survey data show a trend rise in income inequality in Australia over the last three decades. Top income shares derived from Australian Taxation Office (ATO) tax data combined with National Accounts data confirm this longer-term trend.

"Work by well-known academics such as Richard Wilkinson of the London School of Economics and Kate Pickett of the University of York have shown that issues such as health, violence, lack of community life and mental illness are more likely to occur in societies where the rate of inequality is higher.

"As Catholic Health Australia have noted, 65% of those in the lowest income group report long term health problems compared with just 15% of our wealthiest groups. As is too often the case, those already facing challenges are among the first to be affected by bad policy making and feel the effects the hardest.

"One of the key conclusions in a report by International Monetary Fund's (IMF) Research Department on the topic of inequality in February this year titled Redistribution, Inequality, and Growth is that ‘lower net inequality is robustly correlated with faster and more durable growth, for a given level of redistribution' it said: "It would still be a mistake to focus on growth and let inequality take care of itself, not only because inequality may be ethically undesirable but also because the resulting growth may be low and unsustainable.".

"The submissions to the inquiry underline the fact that inequality affects a wide range of groups in our community, and has complex consequences that can lead to inter-generational disadvantage. The submissions outline impacts on older Australians, including those looking for work; younger jobseekers and students, families and single parents, the majority of whom are women, people with disability and people from non-English speaking backgrounds.

"As St Vincent de Paul Society point out in their submission: ‘Inequality does not affect everyone equally: those who suffer the most are more likely to be Indigenous Australians, older and younger Australians, people experiencing illness, refugees, and women'.

"St Vincent de Paul Society have also noted the discrepancy between Australia's average fulltime income of around $1500 per week and both the full time minimum wage of $622 per week and the inadequate rate of Newstart at just $249 per week. Their submission suggests that up to 13% of Australians live in a household with an income under $20,000 per year.

"There are particular issues that affect some groups more than others, with People with Disability Australia submitting: ‘In addition to paying more of their income on rent, people with disability also pay a higher proportion of their income on out of pocket expenses related to disability. This leaves little disposable income for everyday needs such as food and clothing, and makes spending on luxuries, investing in education, or the opportunity to save for the future out of reach for the vast majority of people with disability.'

"As Prime Minister Abbott continues his visit to the Northern Territory, it is important to note that inequality among Aboriginal and Torres Strait Islander people remains a very serious concern, with only 13% of Aboriginal and Torres Strait Islander people reporting a household income of $1,000 of more, compared to 33% of the population.

"The Committee will work to examine a wide range of issues and present a comprehensive set of recommendations to the Government," Senator Siewert concluded.


Back to All News