Income inequality in Australia:

ensuring a ‘fair go’ for all

Inequality in Australia is above the average OECD level for developed nations. The income of the richest one per cent of Australians is 26 times the income of the poorest 20 per cent – with older Australians and those living in remote areas among the hardest hit.

In just 14 days, the highest-earning households in Australia make more than the poorest households do in a year.

Emeritus Professor Prasada Rao and Professor KK Tang from UQ’s School of Economics are committed to finding solutions that will bridge this ‘disadvantage gap’.

“The way you start out in life can impact where you end up,” Emeritus Professor Rao said.

“In wider political discussion, people often view income as driven by choice – but parental income and access to health care and education play a huge part in earning capability.

“We want to help politicians and policymakers to make decisions that will help decrease disadvantage and provide equal opportunities for all Australians.

“We are looking at what proportion of income is driven by choice - the effort individuals put into their work – and what proportion is determined by where, and in what, circumstances someone is born,” Emeritus Professor Rao said.

Emeritus Professor Rao and Professor Tang sit together smiling.

Emeritus Professor Prasada Rao and Professor KK Tang

Emeritus Professor Prasada Rao and Professor KK Tang

Professors Rao and Tang are looking to address these challenges by generating solutions that focus on providing access to education and healthcare to vulnerable demographics, rather than relying on taxation to address inequality.

“Rather than equalising through taxation policy and taking from high earners – we are looking at doing it through providing education and healthcare to the most disadvantaged sections of our society,” Emeritus Professor Rao said.

Their research, which has been supported by an ARC research grant, has helped bring into focus what factors drive inequality in Australia to help provide solutions to close the gap.

“By looking at what drives inequality we are able to present recommendations on resourcing and services in certain areas which can help solve these issues to curb inequality,” Professor Tang said.

In partnership with other researchers across the University, they are now looking at providing further insights into the needs of rural and remote living Australians.

“We are extending our research to work with geography academics to look at inequality in access to healthcare services by geographical region to identify needs for Australians living in remote locations,” Professor Tang said.

Read more inspiring research partnership stories from the 2019 BEL Research Profile.