Rich get richer and the poor get the picture: Surging wealth leaves poorest in the shade

The gap between Australia’s haves and have-nots has widened in the past two decades, data shows.

Apr 18, 2024, updated Apr 18, 2024
Real estate has pushed up our wealth but bank accounts are dwindling (File photo)

Real estate has pushed up our wealth but bank accounts are dwindling (File photo)

A report, led by the Australian Council of Social Service (ACOSS) and UNSW Sydney, reveals the average household wealth of the top 10 per cent has grown much faster since 2003 than the lowest 60 per cent.

The collective wealth of the top 10 per cent of households has soared 84 per cent during that time, from $2.8 million to $5.2 million.

Comparatively, the average wealth of the lowest 60 per cent of households has risen 55 per cent from $222,000 to $343,000.

“These disturbing figures show that people with the lowest income and least wealth are being left behind by the increasing inequality in Australia,” ACOSS chief executive Cassandra Goldie said in a statement on Thursday.

“Without major reform to housing, superannuation tax breaks and income support, the divide between those with the most and those with the least will continue to deepen.”

Since 2003, 45 per cent of the rise in household wealth went to the top 10 per cent and half of that was pocketed by wealthy older people (those 64 years and older).

The gap is also growing among under-35 households, despite the group holding five per cent of all wealth.

The average wealth of the highest 10 per cent of households within the age bracket rose by 126 per cent (from $928,000 to $2 million), while that of the lowest 60 per cent increased by 39 per cent (from $68,000 to $80,000).

When ranked by income, the top 10 per cent of Australian households brought home an average of $5248 a week after tax.

That was more than three times higher than the middle 20 per cent ($1989) and six times more than the lowest 20 per cent ($794), according to the latest data.

“This research shows that the main cause of income inequality is unequal distribution of earnings through inequality of paid working hours and hourly wages,” UNSW Sydney scientia professor Carla Treloar said.

“It shows, too, that the solid increase in employment over the past couple of years has reduced individual earnings inequality.”

From 2021 to 2023, wage inequality fell when national unemployment dropped to less than four per cent.

With higher interest rates set to push the unemployment rate back towards that mark, Ms Goldie warned those on income support would suffer most.

She suggested the fastest and most efficient way to bridge the gap would be to raise the JobSeeker rate from $55 a day to at least the pension rate of $80 a day.

“Reducing tax concessions for negative gearing and capital gains, as well as superannuation, that speed wealth accumulation among the highest 10 per cent and increase housing prices would help stem growth in wealth inequality,” Ms Goldie saione-thirdd.

Social security payments and income tax collectively reduced income inequality by a third, the report found.

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