The concept of a “fair go” is quintessentially Australian. Yet it appears that our ideas about equality in this country may be increasingly ill-founded, with far-reaching implications.
A new report looking at the gap between beliefs and reality concerning wage inequality in a number of countries found that Australians significantly underestimate the number of people with lower-than-average earnings and overestimate how many earn in the top 30%. Their beliefs about what is occurring tend to mirror what they think should be the case rather than what is.
The report also showed that we grossly underestimate just how much the big end of town out-earns the rest of us, with survey respondents thinking CEOs (of publicly listed companies) typically earned 7.1 times an average full-time salary. In fact the figure is a staggering 103 times! This is not purely an Australian phenomenon and we should spare a thought for the British and the Americans, where chief executives typically earn a mind-boggling 214 and 269 times the average person, respectively.
And it’s not just the blokes (four out of five CEOs are men) in the big corner offices contributing to income inequality. The sexily named Household Income and Labour Dynamics in Australia Survey for 2025 – Hilda – showed economic inequality is now at the highest level since the survey began in 2001. Highest incomes are now growing faster than middle incomes, which in turn are growing faster than the lowest incomes, raising the barriers to improve one’s lot in life.
Then, of course, there are those who are living below the poverty line on jobseeker and similar payments. That successive governments from both sides of the aisle can think that this situation is OK is, to me, abhorrent. The antiquated idea of the “dole bludger” is in no way consistent with reality.
However, income is just one dimension of inequality. Gender is another area where this plays out in multiple dimensions. The Financy Women’s Index tells us that, even if we maintain progress in narrowing the gender pay gap, we are still almost two decades away from equal pay. More concerningly, perhaps, there is a four-decade wait to close the gap on the imbalance between men and women when it comes to unpaid work. Women have less representation in offices and boardrooms, higher rates of unemployment and underemployment, and lower super balances when they retire. Until we can address issues including tertiary subject selection, unpaid work, workplace flexibility, universal childcare and so on, gender inequality will persist.
Australia is a lucky country for many, with enviable living standards. But our wealth is not shared equally and inequality expresses itself across so many dimensions of our economy and society.
Last week I wrote of the disadvantages now facing Australians in their 30s in terms of earnings, housing affordability, budget burden and climate impacts. Those dimensions of disadvantage also disproportionately affect First Nations Australians, LGBTQI people, those with a disability, those from culturally and linguistically different backgrounds, as well as those who live in our regions. The list is sadly a long one.
The Global Social Progress Index is another a measure of just how far behind some cohorts are. In 2024 Australia ranked an impressive 12 out of 170 countries overall, suggesting we are addressing disadvantage well (although we slipped from eighth place the previous year). Yet, on a number of individual measures, we rank poorly considering the overall wealth of our nation. For example, we rank 90th on a diet low in fruit and vegetables, 50th for access to basic education and 40th for access to quality healthcare. Perhaps less surprising, we rank a miserable 133rd on satisfaction with housing affordability. We know this disadvantage appears unequally across Australia.
Despite our understanding of the critical importance of these economic, health, education and other social outcomes, governments of all stripes at state and federal levels continue to underinvest.
If you’re still reading, by now you may be feeling that Australia seems a pretty poor excuse for a country. That is not my point. In fact, Australia does incredibly well on so many fronts. The Social Progress Index has us ranked first on quite a number of measures, well ahead of our GDP per-capita ranking of 16, including on access to electricity, household air pollution, gender parity in secondary education attainment and basic sanitation services. Melbourne, Sydney and Adelaide all rank in the world’s top 10 most livable cities.
And, despite much public discourse about intergenerational inequality, the Productivity Commission estimates that our parents’ income is far less of a determinant of our own potential earnings than in most other countries, including in Scandinavia.
The point, rather, is that Australia is a very wealthy country with relatively low levels of government debt and well-developed institutions. This makes it harder to tolerate the evidence of inequality and disadvantage.
Last week at the economic roundtable there was a lot of talk about growing the economic pie. We now need to take the substantial resources at our disposal and use them to better effect, to ensure we distribute that pie in better ways and do not let rising inequality become the norm.
• Nicki Hutley is an independent economist and councillor at the Climate Council
