Wealth inequality on the rise in Australia
Wednesday, 17th July 2019 at 4:11 pm
Average household wealth in Australia has risen above $1 million, but community groups warn this comes at a time of widening economic inequality, with the wealth of low-income earners falling by almost 10 per cent.
The Australian Bureau of Statistics’ latest Survey of Income and Housing found average household wealth has risen 37 per cent in just over a decade – reaching $1.02 million in 2017-18 compared to $749,000 in 2005-06.
ABS chief economist Bruce Hockman said the main contributors to household wealth continued to be property and superannuation.
Hockman also said the latest data showed that income and wealth inequality had remained relatively stable since 2013-14.
But he noted over the past decade income growth has been slow, with average weekly household incomes increasing by only $44 in 2017–18, compared to $220 in the four years up to 2007–08.
“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,” Hockman said.
Community groups said the latest ABS figures confirmed that disparities of income and wealth in Australia were widening.
Australian Council of Social Service (ACOSS) principal advisor Dr Peter Davidson told Pro Bono News wealth inequality was already more entrenched than inequality of income, and becoming more so.
“The media has highlighted the average wealth level of just over $1 million, most of it in housing. This average figure is misleading because it’s lifted by the assets of a wealthy minority,” Davidson said.
“The average wealth of the lowest 20 per cent, who have little super and are unlikely to own their homes, is just $35,000 – one-sixteenth of the wealth of the middle 20 per cent. Their wealth fell by 7 per cent from 2015 to 2017.”
Davidson pointed out that in 2017-18, the bottom 20 per cent of households lived on incomes of $517 a week before tax, less than a third of the $1,707 that the middle 20 per cent lived on.
The top 20 per cent meanwhile had incomes of $5,403 a week.
“The latest figures confirm what most people know: average household incomes are growing slowly, by just 2.5 per cent from 2015 to 2017,” Davidson said.
“They also show that people who are already better off are leaving lower-income groups behind. From 2015 to 2017, the average income of the lowest 20 per cent fell by 1.1 per cent… [while] the average income of the highest 20 per cent rose by 3.5 per cent.”
Australian Council of Trade Unions secretary Sally McManus noted the Gini coefficient, a measure of wealth inequality, had risen steadily in Australia over the past 25 years.
She said with disposable income only increasing by $44 over the past decade, working people simply had no money to spend.
“The wealth which is generated by working people in Australia should benefit all Australians, not be concentrated more and more in the hands of the wealthy few,” McManus said.