Well-off Australians are getting richer as tax cuts for the wealthy and ballooning salaries for executives drive a widening gap between rich and poor.
Two academics studied wages over a ninety-year period and discovered that the top 1 percent of taxpayers earn nearly 10 percent of Australia’s income.
Working with Oxford University professor Sir Tony Atkinson, Australian National University Profesor Andrew Leigh tracked wages back to the 1920s to determine the share of income held by the rich.
Using taxation statistics, the study found that the income share of Australia’s best-paid workers has been rising at a rate far outpacing ordinary workers.
The top one per cent, those on more $200,000 a year, have doubled their share of household income wealth since 1980.
While the top 0.1 per cent, about 1000 people on more than $700,000 a year, have tripled their share of household income over the same period.
Prof Leigh said former Midnight Oil frontman and Labor minister Peter Garrett had it right when he sang “the rich get richer and the poor get the picture”.
“It’s not that the poor are actually getting poorer, it’s just that they are not enjoying the same gains from growth that the top are,” he told reporters in Canberra.
The study noted several reasons for the trend, which Prof Leigh expects will continue.
These include cuts to top tax rates, companies sourcing international executives on international wages, and technology changes.