Wealth inequality in Australia is rife and rising

Wealthy Aussies are just getting wealthier, new statistics show, but the same can’t be said for those on the other end.

According to the Australian Bureau of Statistics’ latest Household Income and Wealth Australia 2017-18 report, the average net worth of the top 20 per cent of households is more than 93 times that of the lowest 20 per cent.

The difference is around $3.2 million compared to $35,200.

Wealthy households have enjoyed substantial gains, with the worth of the top 20 per cent jumping from $1.9 million in 2003-04 to $3.2 million now – which is a rise of 68 per cent (after inflation).

But the average worth of low-wealth households has only risen $1,000 since 2003-04 (after inflation).

And the wealthy are driving up average household wealth figures.

The figures show the average net worth of all Australian households has now jumped to $1 million – the highest it’s ever been in history, and a rise of over 37 per cent in a decade.

Housing now makes up over half (57 per cent) of all Australians’ wealth, which means growing house prices are driving household wealth.

Around 42 per cent comes from the family home and 15 per cent derives from investment properties. On top of that, superannuation accounts for around 18 per cent of wealth.

But while the average is now $1 million, half of all Aussies had a net worth of $558,900 or less.

Chief economist at the ABS, Bruce Hockman, said the figures showed there was a “marginal increase” in wealth inequality, and that wealth continued to be “less equally distributed between households than income amongst Australians”.

Which state has the richest Aussies?

Households in Canberra have the highest disposable incomes, with the average “equivalised” disposable income sitting at $1,256.

That’s followed by Darwin at $1,243, Western Australia at $1,105, Victoria at $1,041 and NSW at $1,118.

Those in Queensland, SA and Tasmania have the least amount of disposable income, with $997, $989 and $922 respectively.

What about income inequality?

Hockman said the distribution of income between households was relatively stable, but that income growth overall had been extremely weak.

Average weekly incomes have risen just $44 to $1,062 in the decade to 2017-18, but in the four years leading up to the GFC, they rose $220.

“For low income households there has been an increase of $28 in average weekly household income over the past decade, while for high income households there was an increase of $57.”

But while $1,062 might be the average, the median is lower – $899 per week.

“This is due to the larger proportion of households with middle or low income and the small proportion of very high-income households.”

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Source link Finance News Australia

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