Walking small on inequality

Assistant Treasurer Andrew Leigh has only diminished his own stature in a misguided attempt to explain society’s inequality using a “wealth parade” of discontent. The danger is that rather than celebrate the achievements of those who walk tall as an example to others, we will find ways to bring everyone down to size instead. In Dr Leigh’s one-hour parade of discontent it would take 45 minutes before a person of average height, representing average household wealth of $1.5m, passed by. In the final seconds the truly wealthy would have their heads literally in the clouds.

Dr Leigh’s prescription is for more union agitation in the workplace, more targeted welfare, and an army of bureaucrats to test new social policies by means of medical-style randomised trials. He argues that since the 1970s Australia has become more unequal, with the income share of the top 1 per cent doubling and that of the top 0.1 per cent tripling. Figures released by the Australian Bureau of Statistics show that in 2019 Australia had the 19th-highest level of wealth inequality among the 28 OECD countries for which data was available (using the share of top 10 per cent of wealth measure). But the ABS said “more recent data from the Household, Income and Labour Dynamics in Australia survey shows decreasing levels of wealth inequality in the years since 2019-20, with the Gini coefficient for equivalised household net worth decreasing from 0.609 in 2018-19 to 0.584 in 2022-23”.

The danger in Dr Leigh’s analysis is that it will result in government imposing solutions to problems that have been drawn from the wrong conclusions.