Rising Inequality in Australia: Causes and Implications

This article explores the concept of rising inequality among the citizens of Australia. It discusses the causes and implications of this inequality, including the measurement methods and data available. It also examines the impact of tax and welfare regimes on inequality, as well as the polarization of income distribution. The article concludes by discussing the social and economic consequences of inequality in Australia.

Running head: Sociology
Sociology
Name of the Student
Name of the University
Author Note

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Introduction
Through the last two and the half decades, there has been a volume of the literature
regarding the distribution of income in the country of Australia like some of the other OECD
countries that has expanded at a very rapid pace (Morelli, Smeeding and Thompson 2015).
The Australian Bureau of Statistics (ABS) has undertaken multiple numbers of survey
analyses for the facilitation of the collection of the data regarding the distribution of income.
Since the year 1970, the people have been challenging the issues related to the conventional
wisdom that has been connected to the scarcity aspect rather than the attainment of the
successful ways of the managing of the affluence. After the period of the post war, there has
been a new world that has been delivered where there lies some of the dominant concerns and
ideas regarding the past on the declining significances which is more than the inequality.
There has been a variety of the reasons and evidences that can be evidences on the modern
society rather than the interest regarding the declining of the inequality as the major part of
the economic issue of the country. Inequality was actually not getting its worse scenario but
was still profound. A large part of the population had the sense of the economic inequality
and the level of the security. This situation can best described by the theory of the
transformation (Fenna and Tapper 2015). The theory would indicate that as the country was
more industrializes the citizens of the country were been able to move away from the
agriculture to the industry. With the accompanying of the increase in the wealth of the
knowledge, there has been an increased rate of the confusion. While some of the studies
argue that there has been an increase in the income dispersion in the country of Australia,
some of the other study asserts that the level of inequality has actually fallen. The assignment
aims to explore the concept of the rising level of the inequality among the citizens of the
Australia.
Discussion

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The Source of Conflict
The studies related to the income inequality frequently can never be compared with
one another. This generally occurs for some of the several reasons and is basically the
primary explanation for the conflicting data. Some of the tool that is best examples for the
units of the measurements are the Gini Coefficient, the intersection of the Lorenz Curve and
more.
The Units of measurement
Income, the particular income of the money has been long considered as the index of
the wellbeing material. The difficulties that are associated with the obtaining of some of the
more comprehensive measures of material well being that are numerous. One of the major
reason is the cost.
Method of the inequality measurement
There has been several methods for the measurement o the income inequality. These
include the range, the variance, the standard deviation and the Atkinson index and the
coefficient of the variation and one of the most common, the Gini coefficient (Inglehart and
Norris 2016). The coefficient of the variation illustrates the relative dispersion regarding the
outcomes around the mean. It furthermore defined as the ratio regarding the standard
deviation(s) to the sample mean (m) that are expressed as the percentage. This can be
illustrated as
CV = s/m X 100
The coefficient of the variation tends to adjust with the results of the variation for the
used scale so that is the free of the unit. This furthermore enables the variables with the
different units of the measure that has been compared.

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Data regarding the rising inequality
The middle class is shrinking and the Australians are losing the mobility of the class
towards the reversal of the one of the most essential social reforms of the 20th century. The
richest of the Australian have been capturing almost two thirds of the wealth of the new
household over the past 15 years and that has been a bad news for the middle and the lower
class.
As per the Australian Bureau of Statistics some of the new figures on the distribution
of the household income, spending and the wealth on the household has raised by 130 percent
on the top fifth of the household while only 50 percent among the poorest fifth households
among the year 2003-04 and 2017-18 (Stapleton, Sorrell and Schwanen 2017).
One of the biggest concern had never been the rich or the poor but for the individuals
and the group of people in between. The middle class have continued towards the increase of
the wealth due to the increase in the wealth of the country, but the issue lies on the fact that
the middle class people’s share of the wealth was diminishing.
As per the data of the last 8 years, the increase level of the inequality has made it
harder for the rise among the class and the inheritance became more of a determinant of the
future. With the more level of the inequality of the wealth, the citizens of the Australia have
less equality regarding the upcoming opportunity.

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Source: (Australian Bureau of Statistics, Australian Government 2019)
The above data published by the Australian Bureau of Statistics illustrates the rising
inequality among the people or the citizens of the country highlighting the fact that the rich
has been getting richer and the poor are getting poorer.
The polarization of the distribution of the income at the top
There has been numerous of the studies that has been undertaken by the scholars for
the investigation regarding the extent to which the inequality of the income had been the
main product regarding the relative low income for the poor individuals. Studies by ()
furthermore highlighted the aspect of the relative higher income for the people who are rich
in the country (Kochhar and Cilluffo 2018). It has furthermore been found that the societies

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in the nation of the country that has been experiencing the large increased level of the
inequality and the upgrading would definitely have to take the precedence over the aspect
regarding the down grading cause such a the polarization. In the other terms, the data
revealed that the well off individual tends to have further better chances of becoming much
richer (Burkhauser, Hahn and Wilkins 2015). In the country of Australia, the net share of the
total income is generally taken by the top 10 percent that has decreased from 50 in 1929 and
1932. It has furthermore decreased to 35 percent and later in 2007, it increased to 50 percent.
Inequality
Inequality has been a big social problem since it has been a harmful. People with very
low income and wealth of the country are often left behind. Post the 1970s era, the country
though have seen a rampant growth in the overall GDP, the people in the country has been
facing some of the factors leading to major inequality. Excessive and too much inequality is a
bad sign for the economy (Steffen et al. 2015). The Australia has been facing this inequality
in the case the resources and the powers are being concentrated in the fewer hands. People of
the country have been too impoverished regarding thee effective participation in the paid
workforce. There are two of the major ways that inequality can be measured. These are the
income inequality and the wealth inequality. As per the research by Fleming and Measham
(2015) the wealth inequality is higher in the country of Australia than the income inequality.
Tax and Welfare Regime
In the country of Australia, the inequality of the income has been seeing an increasing
growth and the rise may have a significant fosteration by the inequality in the market income.
There has also been an rampant increase in the inequality of the outcome of the market
among the time of 1979 to 2004 that cause by the higher rate of the tax and the accelerating
level of the generosity regarding the social assistance and the assistance of the employment.

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In the year of 1990s, the inequality o the market income grew a rapid growth and the tax and
the welfare program failed towards the reduction of the effect of the polarization (Mendolia
and Siminski 2016). The lowering of the personal taxes that has been mainly for the highest
income tended to reduce the issues related to the in employment benefits which has been
furthermore assisted in the accountancies for the rise of the inequality.
The increase in the social assistance and the welfare and the tax reforms were the
most deliberate decisions and the policy that resulted in the impact of the inequality in the
country. The economic crisis of the 1974-1975 in the country furthermore actively
contributed to the inequality of the country of Australia (Coelli and Borland 2016). This
particular economic crisis erupted just after the Whitlam Labour government who got re
elected in the year 1974. During this particular time, the policies of the government of the
country that were generally in place swing from the Keynesian stimulus of austerity
regarding the struggle of the policy of the minster.
Measures
The country furthermore had strong and organized trade unions that furthermore laid
some of the relevant attempts regarding the defending for the unions for the gaining of the
rise of the wage that could have sustained the original values of the price. The business, the
unions and the government were quite mobilized regarding the attempts for the defending of
the interest. The political impasses ended in the year 1983 which was followed by the
election of the new labour government and there were certain results regarding the
unprecedented and the restructuration of the economy (Ding et al. 2015). The country
furthermore initiated to end the crisis by the election of the new government to propose the
income accord and process that were the pat of the agreement that has been set by the trade
unions and the guaranteed of the wage restarts and the industrial peace.

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Along with the policies of the wage, the government of the country was able to restructure
the policies of the business taxation. Furthermore the statutory tax rate were reduced in the
year 1983 to 47 percent and in the year 1996 to 36 percent. Later in the year 1986, the
government of the country furthermore introduced fringe benefit tax and the capital gain tax
for the reduction of the level of the income inequality. The personal taxes were initiated to
change and initiation was taken by the government for the introduction of the dividend
amputation for the reduction of the income tax from the benefited wealthy individuals.
Conclusion
Thus it can be concluded that the distribution of the income in Australia has appeared
to have become more efficiently and equally distributed among the year 1915 and the early
1980s. Through out the last decade, as calculated by the tool of the Gini coefficient and the
curves of the income inequality it is evident that the inequality in the income of the individual
of the country of Australia seems to have increase particularly among the late 1970s till the
current decade. Inequality has been a big social problem since it has been a harmful. People
with very low income and wealth of the country are often left behind. Post the 1970s era, the
country though have seen a rampant growth in the overall GDP, the people in the country has
been facing some of the factors leading to major inequality. Since the year 1970, the people
have been challenging the issues related to the conventional wisdom that has been connected
to the scarcity aspect rather than the attainment of the successful ways of the managing of the
affluence. The paper explored the concept of the rising level of the inequality among the
citizens of the Australia.

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Reference
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