The level of income inequality in Australia is above the OECD (Organisation for Economic Co-operation and Development) average, but much below countries such as the United States or the United Kingdom, which have very high levels of inequality. While inequality in Australia is not extreme by international comparison, it is worsening in the Australian communities.
According to the tax statistics analysed by Melbourne Institute, the top 1 per cent of Australians earned an extraordinary 9 per cent of Australian total income in 2013, the highest proportion since 1950s. In 1980s, the top 1 per cent of Australians amassed just 4.4 per cent of Australian total income, an increase of 105 per cent from 1980 to 2013.
The minimum income threshold for an Australian in the top 1 per cent population was $237,800 in 2013. On average, a person earned $438,100 in the top 1 per cent Australian population.
Income inequality among the top 1 per cent is highly disproportionate and noteworthy. The top 0.1 per cent of Australians, calculated to be a mere 18,750 people, earned 2.7 per cent of Australian income, the highest take home income since 1950s. The entry income for a member of the top 0.1 per cent population was $608,700. The average income of a member of the top 0.1 per cent population was $1.3 million.
The entry level income threshold for an Australian in the top 10 per cent was $94,200. The average income of Australians in the top 10 per cent was $161,767. As a comparison of average income between top 1 per cent and top 10 per cent, the former group of Australians earned 171 per cent more money than the latter in 2013.
In 2013, the national average income earned by Australians aged 15 years or older was $48,800. The average Australians received 231 per cent less income compared to the top 10 per cent of Australians and 798 per cent less if compared with the top 1 per cent of Australian population.
Australians enjoy a tax system and a system of income support payment which are progressive and highly targeted to equalise national income and wealth. The system of minimum wage prevents Australian working households from falling to an extent experienced by some developed countries.
Australia needs to maintain a firm policy focus to manage income inequality to a level that would check potential social instability and create community cohesion. These policies would include ensuring a fair share of tax is paid by all including large corporations; rationalising tax breaks to high income earners in superannuation, negative gearing and capital gains tax (CGT) concessions; providing training and up skilling opportunities to enhance a greater level of employment and improving income support payments.