Viw Magazine

Men's Weekly

.

  • Written by Christopher Sheil, Visiting Senior Fellow in History, UNSW

The results of the latest Australian Bureau of Statistics biennial survey of income and wealth met have met with an uneven response, perhaps in part due to a slipshod press release.

Released with the data on July 12, it was headed: “Inequality stable since 2013-14”.

It began:

Income inequality has remained stable in Australia while income growth has been slow, according to new information released by the Australian Bureau of Statistics today.

Oddly, the press release didn’t include data to back up its conclusion. That was left for reporters and analysts to find, diving into the trove of more detailed information assembled by the bureau, from which a somewhat different picture emerged, particularly for wealth.

Writing for the ABC, Stephen Long and Michael Janda noted that average (mean) household wealth has been climbing quickly whereas typical (median) household wealth has not, implying that the rich are getting richer much more quickly than Australians in the middle.


Read more: Inequality is growing, but it is also changing as Australia's super rich evolve


They also noted an increase in the so-called Gini coefficient, commonly used by the bureau and others to measure inequality.

And they noted that the “ultrawealthy” were probably under-counted in the survey, as is to be expected in essentially voluntary random surveys.

In the Sydney Morning Herald and Age, Shane Wright and Eryk Bagshaw tracked the trends since 2003-04, when the bureau began its income and wealth survey.

Examining “quintiles” (which divide Australia’s households into five equally sized groups, in this case from least wealthy to most wealthy), they found an increasingly divided society.

Their captions read: “The wealthiest 20% have left the rest behind” and “The rich are getting richer”.

Both sets of journalists were right not to accept the bureau’s sunny headline.

According to the bureau’s own data, over the four years since 2013-14, the top 20% of households increased their share of the nation’s private wealth from 62.1% to 63.4%. Their share was 59% in the first survey back in 2003-04.

The wealth share of every other quintile fell.

The share of the second wealthiest quintile fell from 20.5% to 20.4%; the share of the middle quintile from 11.4% to 11.1%; the share of the second poorest quintile from 5.1% to 4.5%; and the share of the bottom quintile from 0.9% to 0.7%.

That is not a picture of stable inequality.

It is more reasonably described as a picture of gradually increasing inequality, of the kind we would expect given the underlying dynamics of modern Australian capitalism.

Unchecked, things will get worse

In the absence of deliberate redistribution, the inequalities associated with accumulated wealth tend to increase over time.

Unless actively restrained, the trends identified (but not publicised) by the bureau suggest that Australia will become increasingly unequal.

Yet there is more to the story than correctly describing the data presented.

There is also what’s missing. The survey does not present a figure for total household wealth. This means we don’t know how much wealth it didn’t find.

An increasing amount of wealth is missing…

We will get a good idea in about a year when the bureau reconciles its income and wealth survey with the Australian National Accounts.

Previous reconciliations suggest that wealth missed is growing.

The gap between wealth identified in the survey and the national accounts climbed from about 5% in 2013-14 to 8% in 2015-16. That 2015-16 figure amounts to A$626 billion, which is a lot of missing wealth – considerably more than the total wealth of the poorest 40% of households.


Read more: Inequality in the OECD is at a record high – and society is suffering as a result


The discrepancies appear to be associated with understatements of the value of property assets, loans, shares, trusts, and other equities of the type mainly held by wealthy Australians.

…and the ultrawealthy are invisible

The bureau’s released data ignores the distribution of wealth at the very top.

The data is reported in quintiles (fifths) and percentiles a decile apart, but inequality is likely to be growing the fastest at the very top where the data isn’t reported.

The so-called P90/P10 ratio provides a clue. This is the ratio of the wealth of the households 10% from the top of the wealth distribution and the wealth of the households 10% from the bottom. In other words, it compares the quite rich with the quite poor.


Read more: Don't believe what they say about inequality. Some of us are worse off


The latest survey shows that the wealth of a household 10% from the top is 71 times the wealth of a household 10% from the bottom, up from 52 times in 2013-14, and 45 times when the survey began back in 2003-04.

It means the gains of households at the halfway point of the top 20% have been bigger than those of the top 20% as a whole, suggesting increasing inequality within the top 20%, which is likely to more extreme within the top 1%.

We really need to know

Statistics are windows on change. Despite our criticisms, the bureau’s biennial income and wealth survey gives us the best view of inequality we’ve got, but large areas remain foggy.

In research for the Evatt Foundation, we have used data from the Bureau of Statistics, Organisation for Economic Co-operation and Development and national accounts to estimate that, for the first time in more than half a century, the richest 10% of households own more than half of Australia’s private wealth.


Read more: There's a reason you're feeling no better off than 10 years ago. Here's what HILDA says about well-being


The Evatt Foundation’s results seem to stand up well, but governments should really be producing better data themselves.

Inequality and its harmful effects on economic output and stability are growing. We owe it to ourselves to find out by how much.

Dr Christopher Sheil is President of the Evatt Foundation affiliated with the University of Sydney.

Emeritus Professor Frank Stilwell is Vice-President of the Evatt Foundation, affiliated with The University of Sydney.

Authors: Christopher Sheil, Visiting Senior Fellow in History, UNSW

Read more http://theconversation.com/what-the-bureau-of-statistics-didnt-highlight-our-continuing-upward-redistribution-of-wealth-121731

VR Training in Australia – Conflict Resolution Training For Employees

In today’s rapidly evolving workplaces, Australian organisations are turning to immersive learning tools like VR to handle specialised n...

Financial Planning For Couples

Why Every Couple Should Talk About Money And A Will (Before It’s Too Late) When you’re in a new, exciting relationship, it’s easy t...

Navigating Relationships While Living with Depression

Living with depression can feel like carrying an invisible weight—one that not only affects how you experience the world but also how yo...

Choosing the Right Vinyl Flooring Suppliers for Your Home or Business

When it comes to selecting flooring options that combine durability, style, and affordability, vinyl flooring stands out as a top choice. ...

Why Food Manufacturing Cleaning Services Are Essential for Safety and Quality

The complexity of food production environments demands specialised cleaning approaches that go beyond regular janitorial work. This is whe...

The Importance of Choosing the Right Industrial Electrician Melbourne for Your Business

When it comes to powering large-scale operations and complex machinery, commercial electrical services are not enough. Industrial environm...

What to Expect During a Property Settlement After Separation

Separation is a challenging and emotional time, and one of the most complex aspects can be the division of property. However, understandin...

Designing the Ideal Healthcare Environment with a Professional Medical Centre Fitout

When it comes to healthcare spaces, functionality, hygiene, and patient comfort take top priority. An intelligently designed medical centr...

Stay Comfortable Year-Round with Ducted Cooling Melbourne

When the temperature starts to rise, having a reliable and efficient cooling system becomes a priority. With unpredictable weather and sud...

Best Practices for Content Ownership and Tagging Across Departments

Image by kaboompics on Freepik The bigger and more complex content ecosystems grow, the more valuable ownership and tagging become. In ent...

Understanding Public Liability Insurance Australia: What You Need to Know

Image by rawpixel.com on Freepik The necessity of public liability insurance in Australia is that it acts as a financial safeguard for busi...

How HID Proximity Cards Improve Workplace Security Without Slowing Down Access

In today’s workplaces, security is non-negotiable, but so is speed. Companies are under pressure to protect their people, property, and ...

Unlock Business Insights Faster with Power BI Tools

In this digital age where data drives the consumer landscape, businesses are shipping huge amounts of data every day. To remain competit...

Why Split System Installation Is a Smart Choice for Home Climate Control

Temperature control is essential for comfort, and when it comes to efficient, versatile cooling and heating, a split system is one of the ...

What You Need to Know About SMSF Setup in Australia

Setting up a self-managed super fund (SMSF) is becoming an increasingly popular choice for Australians who want more control over their re...

The Ultimate Guide to Door Replacement: Everything You Need to Know

Image by freepik Sure, swapping out a door is a fairly easy task, but it requires careful consideration of options for materials, designs...

Common Web Development Issues Perth Businesses Face (and How Agencies Fix Them)

Image by freepik Let's be honest, in the bustling heart of Perth's business scene, a website that's not up to scratch is like trying to he...

Life With Clear Aligners: 10 Small Changes That Make a Big Difference

Image by tonodiaz on Freepik Clear aligners have transformed orthodontics, offering a nearly invisible way to straighten teeth without the...

Choosing the Right Hair Loss Treatment for Your Needs

Millions of people experience hair loss globally, and it can be a major cause of emotional discomfort and self-consciousness. Hair loss ca...

Cardboard Display Boxes: An Effective Solution for Retail Presentation

In the competitive world of retail, how products are presented can be just as important as the products themselves. Cardboard display boxe...