Labor pushing for more inequality research

The Productivity Commission would have its research scope expanded to include inequality's effects on Australia's economy under draft laws which have passed the Senate.

While the legislation is unlikely to be debated in the House of Representatives, where the government controls the agenda, the move could become reality if Labor wins the next election.

Labor senator Jenny McAllister, who was behind the private bill, said the government had no plan to tackle income stagnation and rising inequality.

"We need to change our institutional arrangements so that now and forever these issues cannot be ignored," Senator McAllister told parliament on Monday.

Under the plan, policy guidelines for the commission's functions would require consideration of inequality.

It would also establish a framework to regularly report on economic inequality.

Liberal senator James McGrath said the best way to decrease inequality was to ensure Australia's economy was growing.

"Inequality has become the new rallying cry of the left as they continue to pedal the politics of greed, envy and division," he said.

Senator McAllister's bill passed the upper house 32 votes to 30.