Income Inequality and Foreign Direct Investment in Australia: A Comprehensive Review

Anna Ploszaj, Tarlok Singh & Jen-Je Su

Published: June 2019

Income, wealth and consumption are three main factors that determine people’s standard of living. Many organisations in Australia report that in recent years the Australian standard of living has been changing, with some people falling behind. This paper examines the magnitude of and the factors contributing towards the growing income inequality in Australia. The data shows that income inequality, which in Australia in the mid-1990s was around the same level as in other developed countries, has recently outpaced their levels. The data on FDI shows that, at the same time as income inequality was on the rise, the amount of FDI inflows to Australia increased and despite a higher FDI restrictiveness index than the average for OECD countries Australia holds its position in the top ten countries in terms of the preferred destination of FDI.