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Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

2 August 2012

Australian article on inequality under Labor Government factually incorrect

An article on the front page of The Australian today entitled "Inequality has grown on working-class warrior's watch" is factually wrong, including several years of the former Government when inequality increased to incorrectly assert that inequality has increased under the Labor Government.

The article points to income share data compiled between 2003-04 and 2009-10, and notes that there has been a net increase in the share going to the top 20% of 0.9 per cent over this time.

The fact is the income share data shows that inequality in Australia increased between 2003-04 and 2007-08, while the Howard Liberal Government was in office.

It then decreased from 2007-08 to 2009-10, under the Labor Government.

In fact, if you compare 2007-08 (the financial year in which Labor came to power) and 2009-10 then the income share of the top 20% has fallen by around 0.9% (not risen by 0.9%) and both the bottom 60% and following 20% have increased their share by around 0.5%.

Other measures of inequality show a similar pattern. The Gini coefficient for equivalised disposable household income – a measure of income inequality that increases as inequality does – rose from 0.306 in 2003-04 to 0.336 in 2007-08 under Howard but has since moderated to 0.328 in 2009-10.

The assertion made about inequality is clearly incorrect and no evidence is adduced to substantiate it. The data conclusively points to increases in inequality under the former Liberal Government, and decreases in inequality under the current Labor Government.

I very much welcome a public debate about economic equality and its importance in building on our record of strong economic growth, but it's important that this debate is based on facts.