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Thursday, 2 June 1994
Page: 1202


Senator PATTERSON —My question is directed to the Leader of the Government in the Senate. In answer to a question from Senator Hill last Tuesday the Leader of the Government stated:

There is no statistical foundation for any suggestion that there is a growing disparity between rich and poor in this country.

In light of the findings of the United Nations report on human development which found that Australia recorded the highest levels of income disparity of any OECD country, will the minister now acknowledge that under this government the rich are getting richer and the poor are getting poorer, creating and entrenching a permanent underclass in Australia?


Senator GARETH EVANS —No, Mr President, we will not acknowledge anything of the kind. We have not yet had the opportunity to study that report in detail, but we do have some very real doubts about its conclusions. The reason we have doubts about the conclusions of this particular report and its methodology is that they are simply not consistent with the findings of other international comparisons studies. In particular, there is the well regarded and ongoing Luxembourg income study. That is a group of 14 or so OECD countries which exchange data to systematise their measures of income distribution.

  That particular study shows Australia well ahead of a number of other OECD countries in equality of income distribution.


Senator Kemp —How many?


Senator GARETH EVANS —I do not have the data to hand, but we will tell you about that.


Senator Kemp —Two or three out of 14.


Senator GARETH EVANS —Look, Elmer, you would not know. Like the ABS survey of social trends, the other obvious point about the UN report, evident on its face, is that it simply takes no account of the social wage factor. As I have said on innumerable previous occasions, that is a very important component of effective wealth distribution in this country.

  The other point about the UN study is that it is based upon before-tax income and therefore takes no account at all of the impact of our progressive taxation system. When we take into account the social wage and the impact of the taxation system, the income disparity picture changes very considerably. As I say, other prevailing evidence that we are aware of of international comparisons suggests that there is something quite wrong about that UN study.

  Another bit of data that Senator Patterson, now she has a little more time on her hands, might be interested in looking at is a highly regarded and very comprehensive study of income distribution. That is the recently published book Living decently—not a concept with which Senator Chapman is familiar—by Peter Travers and Sue Richardson, and published last year by Oxford University Press. It concluded:

Australia is clearly not one of the most unequal countries in the world. . .

it is safe to conclude that Australia ranks in the top dozen or so countries in the world in terms of equality in the distribution of income.

Claims that Australia is becoming more unequal simply ignore the fact that the real incomes of the vast majority of Australian households, including those on the lowest incomes, have risen very steadily since 1983 and will continue to rise on current growth forecasts. There has been a 32 per cent increase in real household disposable income over the 10 years since 1983.

  Taking into account not only that but also the social wage factor, the impact of health, education, community services, public housing and all the rest of the goods that we have been delivering in spades throughout the course of this decade, there is ample reason for total confidence that we are not only not lagging behind anyone else in the world but are well ahead of the game.