Analysis
Updated
It's official: the rich are getting richer.
Well-off
Australians are pulling away from the rest of the nation, with
inequality of wealth rising in recent years, new figures from the
Australian Bureau of Statistics show.The data is detailed in the ABS's latest Household Income and Wealth Australia 2017-18 report, released today.
The figures show income growth has been virtually non-existent for many — average household incomes have stagnated, with virtually no growth since 2013, although income inequality has also remained relatively stable.
However, the report shows that wealth is highly concentrated in Australia.
The average net worth of the top 20 per cent of households is more than 93 times that of the lowest 20 per cent — some $3.2 million compared to just $35,200.
And the high-wealth households have enjoyed substantial gains, while those at the bottom have had almost none.
After inflation, the worth of the top 20 per cent jumped from $1.9 million in 2003-4 to $3.2 million, a rise of more than 68 per cent.
In contrast, low wealth households did not experience any real increase in net worth over this time period, with their average wealth of $35,200 in 2017-18 similar to 2003-04 ($34,200).
The average net worth of all households in Australia in 2017-18 was $1 million, a rise of more than 37 per cent in a decade, driven in part by increases in superannuation balances and growth in house prices.
Housing now makes up 57 per cent of Australians' wealth, with 42 per cent coming from the family home and 15 per cent from investment properties. Super now accounts for 18 per cent of wealth, and the average household balance has grown to $213,700.
ABS chief economist Bruce Hockman told ABC News that superannuation balances are closing the gap with housing as the compulsory super system matures.
"There's 90 per cent growth over that decade in superannuation holdings. Only about 37 per cent in property."But this total wealth figure was dragged up substantially by the wealth of the top. Half of all Australians had a net worth of $558,900 or less.
In a media release, Mr Hockman said the figures showed "that there was a marginal increase in wealth inequality in 2017-18 and that wealth continues to be less equally distributed between households than income amongst Australians".
But this graph, from the ABS's publication, appears to show a fairly sharp rise in the core measure of inequality, the Gini coefficient, since 2015, at least in terms of wealth distribution.
Overall income growth extremely weak
While wealth inequality has risen since 2007-08, Mr Hockman described the distribution of income between households as "relatively stable", although income growth overall has been extremely weak.Over a decade, average weekly household incomes increased by $44 to $1,062 in 2017-18.
That compares to a $220 gain in average weekly incomes over just four years leading up to the global financial crisis in 2007-08.
The average also flatters the situation for the typical Australian, the median, smack bang in the middle of the income distribution.
"The median was lower, however, at $899 per week," the ABS report noted.
"This is due to the larger proportion of households with middle or low income and the small proportion of very high-income households."
And it is precisely the ultra-high income section of the population that is poorly captured in measures like this ABS one, based on a survey of 14,060 households from July 2017 to July 2018.
ABS says 'ultrawealthy' are included
Mr Hockman said very wealthy people are covered by the survey."The ultrawealthy are included in the report, but we don't publish data at those levels," he said.
"Partly because it may actually tend to identify individuals and the confidence in Australia's statistics actually relies on us being able to maintain the confidences of people actually answering those surveys."
However, the survey is statistically unlikely to capture any of those who made AFR's richest 200 list earlier this year.
This group had a combined net worth of $342 billion.
This group increased their net worth by an estimated 20 per cent last year, and have enjoyed a staggering 17-fold increase in real wealth (after inflation) in the 35 years since that report started.
Some experts say, given the size of Australia's economy and the wealth of its middle and upper classes, the absence of 200 super rich is unlikely to shift the dial much on the measures of wealth inequality.
But others disagree. In an article published earlier in May, political economists Dr Christopher Sheil and Emeritus Professor Frank Stilwell used OECD and ABS data to estimate that Australia's richest 10 per cent now hold more than 50 per cent of the nation's wealth, a share that increased substantially over the four years to 2016.
Almost all of that increase went to the top 1 per cent, which increased their share of the nation's wealth from 14.2 to 16.2 per cent.
In contrast, both the middle-class segments recorded a declining share of wealth — collectively, the majority of households between the 40th and 90th percentile own 47.1 per cent of the wealth, down from 49.1 per cent in 2012.
As for the poorest 40 per cent of households, they remain stuck with just 2.8 per cent of the nation's wealth between them.
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