If you’re ever in doubt that Australia’s rich are getting richer, consider this: last year, the 200 most affluent people in Australia increased their wealth by 20 percent. Over the past 35 years, that same number of people—who represent the top 0.001 percent of the national population—have become 53 times wealthier. And while in 1989 this demographic held about 1.6 percent of the nation’s wealth, they now hold nearly 3.4 percent between them, according to the ABC. By way of comparison, the poorest 40 percent of households in Australia control just 2.8 percent of the nation’s wealth.
These top tier figures are based on the Australian Financial Review’s 2019 “Rich List”, which found that the combined wealth of the nation’s richest 200 was a staggering $342 billion. Almost $16 billion of that sits in the pockets of Anthony Pratt, executive chairman of paper and packaging company Visy, and his family, who sit at the top of the list. Mining magnate Gina Rinehart sits in second place with $13.8 billion, and real estate developer Harry Triguboff is ranked at number three with $13.5 billion. The average Australian household has a net wealth of $929,400, according to market research company McCrindle, while households in the lowest quintile have an average wealth of just $36,500.
It’s important to pause for a second and clarify what we mean when we talk about “wealth”—and to distinguish it as something quite different to “income”. As The Guardian’s Greg Jericho puts it: “wealth (otherwise known as 'net worth') is essentially a stock, while income is a flow—income looks at what you earn each year, wealth looks at the total value of your assets and debt regardless of when you gained them.”
So what’s causing Australia's wealth disparity? According to Greg, it’s mostly home ownership. He observes that “in 2015-16 the median income of households who owned a house and had paid off their mortgage was roughly the same as that of renters, but their levels of wealth differed by a factor of 13.” In an article published by the Evatt Foundation earlier this month, social analyst Christopher Sheil and political economist Frank Stilwell further estimated that the richest 10 percent of Australia's population currently hold more than 50 percent of the nation's wealth, according to data from the Organisation for Economic Co-operation and Development, and the Australian Bureau of Statistics.
While this is clearly good news for the people at the top end of town, the outlook’s pretty bleak for people at both the bottom and middle of the socioeconomic ladder.
“Wealth inequality in Australia is evolving along two fault lines,” Sheil and Stilwell concluded. “The bottom 40 percent of Australian households have practically no share of the rising total. Meanwhile, the middle 50 percent of households have a declining share relative to the top 10 percent, and particularly relative to the top one percent.”
Or, as one expert described it to ABC business reporter Michael Janda: "the rich get richer and the poor get richer more slowly".
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