Swan's inequality warning reflected in statistics
A leading economist and social policy researcher says there is truth in Wayne Swan's warning that income inequality is rising.
The Treasurer has launched a series of attacks on some of the nation's wealthiest people, saying the rising power of the rich, including mining magnates Clive Palmer, Andrew Forrest and Gina Rinehart, is threatening Australia's "fair go" mentality.
Ben Phillips from the National Centre for Social and Economic Modelling says data from the Australian Bureau of Statistics (ABS) shows there has been a modest rise in the gap between rich and poor.
"The ABS statistics tend to look at the top 10 per cent, or the top 20 per cent and compare that with the bottom 10 or the bottom 20 per cent of the income or the wealth distribution," he said.
"And certainly from those numbers you do see an increase in that income inequality over time."
Mr Phillips says the growth in the gap in the past decade is not huge but evidence of a long-term trend towards inequality.
"What the ABS finds is that the top 10 per cent of income earners, their incomes have increased over the last decade by around 36 per cent, whereas the bottom 10 per cent, their incomes have increased by around 32 per cent," he said.
"So it's not a huge gulf in the difference; it would appear that incomes, at least over the last 10 years, have increased fairly steadily together although it would seem that the wealthier or the higher income earners have done a little bit better than the lower income earners."
AUDIO: Gap widens between rich and poor (PM)
The ABS Household Income Survey demonstrates this rise in the gap between the richest and poorest in Australia.
In 1994-95, households in the top 10 per cent earned an average of 3.78 times more than the bottom 10 per cent, but by the latest survey in 2009-10, this had grown to 4.21 times.
The gap in wealth is even starker, with the wealthiest 20 per cent of households accounting for more than 60 per cent of wealth, with an average worth of $2.2 million.
The bottom 20 per cent own just 1 per cent of the nation's household wealth at an average of just $32,000.
And Mr Phillips says those figures probably understate the true income and wealth gaps.
"The problem you've got there is that surveys tend to take a small proportion of the population and they generally miss those at the extreme ends of the income distribution," he said.
Look, this is ridiculous, all we're hearing is whingeing rich people who are complaining about not being rich enough, when in actual fact the economy is based upon small business people out there in the suburbs and the factories of Australia.
Peter Strong from the Council of Small Business
In the economic question of who gets what, the answer over the past decade has also been businesses over workers.
ABS figures show wages have risen about 111 per cent since March 2001, but over the same period company profits are up about 185 per cent.
Some of those company profits filter through in dividends to shareholders and super funds, but the wealthier you are, the more shares you are likely to own.
Small business ignored
But Peter Strong from the Council of Small Business says his members certainly have not been the ones seeing most of that profit rise.
"The average income of a small business is about the same as the average wage earners, somewhere around $70,000, which means that there's a lot of us out there that earn less than $70,000 and there's some that earn more," he said.
"Some would earn more than $200,000, but not many. And one of the myths that we keep trying to break down is about this concept that a small business person makes a profit. We don't, we make an income."
He says big business and unions tend to hog the limelight in Canberra because they are more organised and have much bigger resources to fight for their cause.
"In small business there's 2.5 million of us. Between us we employ another 5 million people, so there's 7.5 million people earning an income from the business, yet all the focus is on people like mining magnates," he said.
"Now the mines only employ 90,000 people."
Mr Strong does not have too much sympathy with Mr Forrest and Mr Palmer over their claims of being unfairly attacked by the Treasurer.
"The last six months the focus on us from the Government, the Opposition, the Greens, everybody, has increased enormously," he said.
"And I think somewhere along the line some people have said, 'look, this is ridiculous, all we're hearing is whingeing rich people who are complaining about not being rich enough, when in actual fact the economy is based upon small business people out there in the suburbs and the factories of Australia'."