Level of income inequality in OECD countries
These charts compare overall income inequality in OECD countries, using the Gini coefficient, for which a higher score represents greater inequality.
2019-20: The chart shows that income inequality in Australia in 2021 or latest available date is close to the average level for wealthy nations, based on OECD data.
2017-18: The chart shows that income inequality in Australia in 2018 - the latest date for which comparative data is available - was close to the average level for wealthy nations.
2015-16: It shows that income inequality in Australia in 2015 – the latest date for which comparative data is available – was higher than the OECD average. Australia sits between other English-speaking countries, above Canada but below the United States and the United Kingdom; and alongside some countries with lower income levels, like Greece and Portugal.
Most European countries had much lower income inequality than Australia.
Poverty Lines by family type
This shows relative poverty in Australia using poverty lines of 50% and 60% of national median household income. More information on the definitions of poverty and different ways of measuring poverty can be found on our poverty page and our FAQ page. It also shows the poverty lines before and after housing costs are taken into account. Housing costs vary considerably among households, depending on whether those households are owners, purchasers or tenants and what part of Australia those households live in. In order to take into account the varying costs of housing, a separate set of ‘after housing costs’ poverty lines is used. This set is created by removing housing costs from disposable income before calculating the median income. This is a measure of the income required to pay for essentials other than housing.
2017-18: The table shows that the poverty line in 2017-18 for a single adult based on disposable income with no allowance for housing costs (the ‘before housing costs’ poverty line) is $457 a week. After housing costs are deducted, the ‘after housing costs’ poverty line is $370 a week for a single adult living alone.
2016-17: The table shows that the poverty line in 2015-16 for a single adult based on disposable income with no allowance for housing costs (described here as ‘before housing costs’) is $432.50 a week. After housing costs are removed, the ‘after housing costs’ poverty line is $353.40 a week for a single adult living alone.
Number of people below the poverty line
This table shows the number and percentage of people who live below the 50% and 60% of median income poverty lines in 2015-16 and 2017-18. It also shows the ‘poverty gap’, a measure of the depth of poverty for those living below the poverty line (the average gap between the incomes of people in poverty and the poverty line). It is important to measure poverty gaps, because even if the rate of poverty is reduced, this could still leave many people living well below the poverty line.
2017-18
After taking account of housing costs, over one in eight people (13.6%) live below the 50% of median income poverty line. The poverty rate among children is much higher, over one in six children (17.7%). The poverty rate among young people (aged 15-24) is 13.9%. There are 3,239,000 people living in poverty in Australia. This figure includes 774,000 children and 424,800 young people. The ‘poverty gap’ is 42% of the poverty line, or $282 a week. That is, people below the poverty line have incomes that are, on average, $282 a week below the line. This average figure includes larger households. Since this figure is not adjusted for household size (equivalised) it is higher than the average poverty gap for – for example, a single person living alone.
2015-16
After taking account of housing costs, more than one in eight people (13.2%) live below the 50% of median income poverty line. The poverty rate among children is much higher, more than one in six (17.3%). All told, there are 3.05 million people in poverty, including 739,000 children. The ‘poverty gap’ is 38% of the (after-housing) poverty line, or $135 per week. That is, people below the poverty line have incomes that average $135 per week below the line. Note that the dollar measure of the poverty gap for 2015 is adjusted downwards for household size (equivalised), so it is much lower than the dollar poverty gap reported for 2017 (which is calculated on a different basis).
Trends in the poverty gap
This graph shows the average poverty gap for all people living below the poverty line, in dollars per week. These figures are indexed for inflation and are expressed in constant 2017-18 values. They are not adjusted for household size, so the average poverty gaps are boosted by the bigger gaps for larger households. It shows that average poverty gaps increased after 2007.
Trends in the poverty gap as a percentage of poverty line, 1999-00 to 2017-18
This graph measures the poverty gap (the average gap between the household incomes of those in poverty and the poverty line) as a percentage of the poverty line. It shows that the average gap between the household incomes of those in poverty and the poverty line rose from 34.3% of the poverty line in 1999-00 to 40.8% in 2003, fell in the boom years to 36.3% in 2007-08, then rose in sawtooth fashion to 44.2% in 2017-18.
Broadly speaking, this is the opposite pattern to the trends in poverty rates. This reflects the changing composition of households below the poverty line. For example, a growing number of older people fell below the poverty line during the boom years from 2003 to 2007, but (relative to others in poverty such as people on Newstart Allowance) their average incomes were not as far below the line. The 2009 pension increase lifted many older people above the poverty line, increasing the share of people below the line with much lower incomes.
Trends in poverty rates by family type and age
This graph compares trends in poverty according to family type and age, between 1999-00 – 2015-16. It shows that, over this period, poverty rates were consistently higher for single people and sole parents than for partnered families. It also shows that poverty rates for people aged 65 and more, and for sole parents, were more variable than for other family types. The main shifts over the period are a decline in poverty among single people aged 65 and over; and a rise in poverty among partnered people, no matter their age. Poverty rates for single people fluctuated considerably more than for partnered people, especially for single people aged 65 and over, in part reflective of the closeness of single pension rates to the 50% median income poverty line.
Household wealth distribution in OECD nations
In 2014, wealth was less unequally distributed in Australia than on average throughout the OECD, with 46% of household wealth in Australia held by the top 10% of households ranked by wealth. In contrast, income inequality is greater in Australia than in most OECD nations.
Trends in average weekly disposable income since 1999-00
This shows how average household incomes grew in ‘real terms’ (after inflation) for the lowest, middle and highest 20% income groups in Australia, as well as the highest 5%.
It shows that income growth was very uneven during the boom from 1999-00 to 2007-08. The average income of the lowest 20% grew by 5.6% per year in real terms, compared with 5.9% for the middle 20%, 7.2% for the highest 20%, and 10.3% for the highest 5%.
After the Global Financial Crisis, from 2007-08 to 2015-16, household incomes grew much more slowly and less unequally. The average household incomes of the lowest 20% grew by 2.5% per year (aided by a large pension increase in 2009), compared with 0.3% for the middle 20%, 0.8% for the highest 20%, and a decline of 0.6% for the highest 5% (likely due to falls in returns from investments.
Average income tax paid by households
This shows the average (not marginal) tax rates paid by households (not individuals) in different income groups.
Personal income taxes are progressive, so average tax rates increase with income. Households in the lowest 20% pay only 4% of their overall income in income taxes on average (including the Medicare Levy) compared with 15% for the middle 20% and 26% for the highest 20%.
However, the progressive impact of income taxes is largely offset by the regressive impact of other taxes such as the Goods and Services Tax and Stamp Duties. Find out more.