Melbourne Institute of Applied Economic and Social Research deputy director, Roger Wilkins, has today labelled “patently false” the claim by Labor leader Bill Shorten that inequality in Australia is rising. From The AFR:
Professor Wilkins told the Economic and Social Outlook Conference that the Australian Bureau of Statistics data on which Mr Shorten based his claim that inequality is at a 75 year high is distorting and incomplete because its methods have changed over the years.
The data shows the personal income share of the top 1 per cent of Australians growing steadily from 4-6 per cent in the 1970s to 8.2 per cent in recent years…
But Professor Wilkins said the data for the incomes of the top 1 per cent was flawed because the Australian Bureau of Statistics (ABS) had changed its method of collecting this data, and the picture it painted was “valid” but at odds with other more reliable data…
Professor Wilkins said he preferred to look at ABS data showing the Gini coefficient (a measure of inequality) for household disposable income, and the Melbourne Institute’s Household Income and Labour Dynamics Australia (HILDA) survey data for the Gini coefficient for household incomes.
“They’re not exactly telling same story but what … they both show since global financial crisis is that if anything inequality is declining as conventionally measured.
“You might say inequality is still relatively high by historical standards for Australia. There’s a case that it’s something to be concerned about, the level…
“But a narrative that says inequality is ever rising is patently false from the available evidence that we have.”
Wilkins might make a valid point with respect to income inequality. But what about inequality of wealth?
We know from the Australian Census that home ownership rates have collapsed among younger cohorts, while remaining steady (or increasing) for older cohorts:
We also know from the Grattan Institute’s research that the wealth of older generations has soared, due primarily to the surge of house values, whereas the wealth of younger generations has stagnated:
When one considers income and wealth side-by-side, Labor’s focus on inequality seems entirely justified.
