The Australian Inequality Index

May 28, 2023

Progressive Economics

The Australian Inequality Index is an interactive tool to empower people and communities to understand the complex causes and effects of inequality – visit the interactive tool at

Further information about the creation of this online tool is available in this report.

Almost a decade ago, Thomas Piketty predicted that inequality in advanced nations would grow from an historically low basis between the 1950s and 1970s to reach heights not seen since the 19th Century. This, he argued, would lead to social and political instability that would threaten the democratic order so carefully established over the last century.

Many of the social disruptions that Piketty predicted in 2014 have begun to take hold across Europe and the US, with citizens voting for populist leaders who stoke division, fear and resentment to gain and hold on to power. Piketty’s work was published before Brexit, before the rise of Donald Trump, before the shift of many once solidly social-democratic European nations towards nationalist and even openly fascist political leaders. 

It seems clear that the political-economic system in which we now live is unable to grapple with the implications of continuing a laissez-faire approach to regulating global capitalism.

This is because inequality is, too often, deliberately hidden or downplayed by the leaders of that system. Extreme inequality is excused, usually by those who most benefit from it, as the result of individual choices or an unfortunate by-product of necessary economic growth.

Our hard-won democratic rights – to individual and social wellbeing, to welfare, to peace and prosperity – are at real risk from the growth in inequality in the 21st Century. It is critical that we take collective action to reverse the course set by extreme, unregulated market capitalism and restore the redistributive function of the state. 

This requires that we reclaim the role of government in ensuring equality of opportunity and supporting equality of outcome, and that we empower communities to take control of their fortunes and determine the best allocation of resources to promote social cohesion and wellbeing.

The Australian Inequality Index is a ground-breaking new tool that provides a multidimensional measure of inequality across a range of economic, social, and demographic indicators. By tracking changes in inequality over time, we hope to enable a richer, more nuanced understanding of the root causes of inequality and develop targeted solutions to address them.

The over-reliance of economists and policy makers on traditional measures of progress, such as Gross Domestic Product (GDP) or Gross National Income (GNI), is understandable: it has been the dominant measure of economic progress for the better part of a century. Yet there is a shift afoot, with many policy thinkers and leaders now acknowledging its limitations as a tool to measure genuine social progress. 

This shift can be seen in the rise of movements advocating the implementation of wellbeing budgets as a core part of government policy processes. That the Australian Federal Government has recently embraced the wellbeing framework underscores the utility and timeliness of our Index.

The Index provides seven conceptually sound, easy to follow sub-indices, and a composite index that brings these seven dimensions together. The sub-indices provide a useful set of insights into progress achieved within each of the chosen dimensions: income, wealth, gender, generation, ethnicity, disability and First Nations. 

Collectively, they provide a better measure of social and economic progress than GDP or GNI: they offer insight into whether benefits are equitably shared between different demographic cohorts, and whether our society is becoming more or less equal. 

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