Rich cash in on welfare in Australia

Nov 15, 2012 6:19am

Richest fifth receive nearly half the wages paid in Australia as well as 12 per cent of all government handouts.

THE richest fifth of households receive nearly half of all the wages paid in Australia - but also get about 12 per cent of all government handouts, new research by the Bureau of Statistics shows.

The findings not only highlight major income disparities across the community but raise questions about the scale of middle-class welfare flowing to well-off families.

The Bureau of Statistics has for the first time measured household inequality with the same data it uses to calculate key national economic indicators such as gross domestic product.

It revealed the poorest 20 per cent of households receives just 2.5 per cent of the nation's wages and salaries in 2009-10 while the richest 20 per cent of households gets about 47 per cent. When income, government cash payments and social transfers in kind (such as public education and health care) are taken into account the poorest fifth's share of "adjusted disposable income" was 11 per cent while the richest fifth got 36 per cent.

But maybe the most revealing finding was the amount of government assistance being transferred to high-income households. The preliminary results showed the richest quintile of households received about 12 per cent of social assistance benefits while the second richest quintile got 11 per cent.

The poorest quintile received almost 30 per cent of social assistance.

Senior Bureau of Statistics official, Michael Smedes, who presented the findings at an Economics Society of Australian seminar yesterday, said the findings on the distribution of government payments were "counter intuitive.''

Many high income households qualify for government payments including the child care rebate, which is not means tested, and the private health insurance rebate.

The analysis also showed government assistance to the poorest quintile of households was only marginally higher than the next income quintile.