Recent avoidable mortality trends in Australia suggest that health care has made a substantial contribution to reducing mortality. This study investigates if the benefits of health care have been distributed equally by comparing declines in avoidable with non-avoidable mortality over time by socioeconomic status (SES). We calculated avoidable and non-avoidable mortality rates in Australia by small areas for 1986, 1991, 1997 and 2002. We performed pooled cross-sectional trend analysis of indirectly standardized mortality rates by SES and year, modelling using Poisson regression with over-dispersion. Socioeconomic inequalities were quantified using the relative (RII) and slope (SII) index of inequality. The annual percentage decline in avoidable mortality at the higher end of the socioeconomic continuum (5.0%; 95% CI: 4.7-5.4%) was larger than at the lower end (3.5%; 3.2-3.8%), with increasing relative inequality between 1986 (RII = 1.54; 1.46-1.63) and 2002 (RII = 2.00; 1.95-2.06), greater than that in non-avoidable mortality (P = 0.036). In absolute terms, avoidable deaths fell annually by 7.4 (6.9-7.8) and 8.4 (7.9-8.9) deaths per 100 000 at the higher and lower end of the spectrum, respectively, with absolute inequality decreasing between 1986 (SII = 97.8; 87.6-107.9) and 2002 (SII = 81.5; 74.6-88.5). Health care has contributed to decreasing the absolute SES mortality gap. However, advantaged people have obtained a disproportionate benefit of health care, contributing to widening relative health inequalities. A universal heath care system does not guarantee equality in health-care-related outcomes.