INCOME INEQUALITY IN AUSTRALIA AND NEW ZEALAND: INTERNATIONAL COMPARISONS AND RECENT TRENDS

In this paper we present results on the distribution of income in Australia and New Zealand that can be compared with those for a range of other advanced countries. The framework of analysis, concepts and definitions used have been developed as part of the Luxembourg Income Study (LIS). Using data for the early 1980s, the results indicate that the income distributions in Australia and New Zealand are not, as previous research has suggested, more equal than those in other countries. Neither country has an equivalent net family income inequality ranking in the top half of the eight countries studied. Further analysis indicates increasing inequality in Australia in the first half of the 1980s and, on the basis of some indicators, in New Zealand also. The paper does not investigate the causes of these increases in inequality, although the results indicate that the rise in property income has been a factor behind them.     

Income Inequality in Australia in an International Comparative Perspective

Earlier comparative work on income distribution has tended to suggest that Australia is characterised by less income inequality than other industrialised economies. Concerns about the quality of the Australian data used in such comparisons have led to the need for more detailed assessment of the situation. The Luxembourg Income Study has been a focus for this work by bringing together microdata sets for a range of countries and reorganising them to conform to standardised concepts and definitions. This paper builds on earlier work undertaken as part of the Luxembourg Income Study by including Australia in an international comparative analysis of income distribution and redistribution. The Australian data are those from the 1981–82 Income and Housing Survey, with income tax imputed onto the data file. Results are presented for the gross and net income distributions between both families and individuals in seven countries. A common set of equivalence scales is also used to adjust for differing family needs. The results indicate that, using several summary measures of inequality, the distribution of income in Australia is less equal than in four of the other six countries studied. Earlier research which placed Australia high on the international league table of income equality is thus not confirmed by the results.