New Report Says Wealth Inequality Increasing in Australia
Tuesday, 31st July 2018 at 7:30 am
The top 1 per cent in Australia receives as much income in a fortnight as the lowest 5 per cent gets in a year, according to new research, which says wealth inequality in Australia is increasing.
Australian Council of Social Service and UNSW Sydney’s inequality report released on Tuesday found the average disposable income of the highest 1 per cent in Australia ($11,682 per week) was more than 26 times that of the bottom 5 per cent ($436).
This meant the highest 1 per cent received as much income after tax in a fortnight as the lowest 5 per cent received in a year.
ACOSS CEO Dr Cassandra Goldie said the report’s findings showed Australia was among the most unequal wealthy nations in the world, along with the US and the UK.
“Our finding that those in the highest 1 per cent earn as much in a fortnight as a those in the lowest 5 per cent in a year deeply challenges our sense of Australia as an egalitarian country”, Goldie said.
“The Australian experience in recent decades shows that inequality has increased strongly in economic boom times and flattened with a slower economy and slow wage growth across the board.
“We should not accept increased inequality as an inevitable by-product of growth.”
The report found wealth inequality in Australia increased from 2003 to 2015, with the average wealth of the highest 20 per cent rising by 53 per cent after inflation, compared to a 32 per cent rise for the middle 20 per cent.
Those in the lowest 20 per cent meanwhile saw their wealth decline by 9 per cent, in stark contrast to the highest 5 per cent, whose wealth grew 60 per cent over this 12-year period.
Goldie said the heavy concentration of investment income in high income households and long-term growth in inequality of hourly wage rates, meant inequality could rise even further.
She urged governments, businesses, unions and communities to “actively work together to prevent this”.
“We can work together to bridge the divide by lifting the lowest social security payments, removing tax loopholes that enable people with the highest incomes to avoid paying their fair share… and implementing effective strategies to improve housing affordability,” Goldie said.
The report also found wealth had shifted to older age groups.
Between 2003 and 2015, the wealth of households over 64 years increased by 57 per cent, compared to just 22 per cent for households under 35.
UNSW research professor in social policy Peter Saunders said this excessive inequality was “unacceptable and harmful to society and to the economy”.
“When people with low incomes and wealth are left behind, they struggle to reach a socially acceptable standard and to participate in society,” Saunders said.
“When resources and power are concentrated in too few hands, or people are too impoverished to participate effectively in the paid workforce, or acquire the skills to do so, economic growth is diminished.”