Distribution of Income

There are several limitations that are associated with the measurement of the distribution of income in Australia.

Perhaps the major problem with the measurement of the income distribution is the fact that in Australia we do not have a goal. This means that any measure that is completed will be descriptive of the situation, but may not lead to a policy response with which all people will agree.
The income survey is conducted by the Australian Bureau of Statistics. The survey is completed irregularly – unlike GDP or inflation the government does not require that the ABS complete the survey at particular intervals. This can make an analysis of the trend difficult.
In the process of completing the survey, it is very likely that errors will be recorded. Some of the data for the survey comes from income tax returns, and many people understate their income for taxation purposes. This is true of both high income earners (who seek to minimise their taxation burden) and low income earners (who may fear losing government support if their incomes increase).
The different type of incomes that are recognised in Australia mean that there are many different stages at which we could measure the distribution. This leads to two problems – there is no measure that can assess all types of income at once, and international comparisons become difficult due to different timing of the surveys.