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Australia's richest 20% own almost two thirds of country's wealth, report finds

Posted by On 12:31 PM

Australia's richest 20% own almost two thirds of country's wealth, report finds

Australia news Australia's richest 20%​​ own almost two thirds of country's wealth, report finds

Average household wealth in highest 20% is $2.9m, almost 100 times that of the lowest 20%, according to Acoss report

About 647,000 single Australians receive Newstart and youth allowance.
About 647,000 single Australians receive Newstart and youth allowance. Photograph: Julian Smith/AAP

For Sherri Prendergrast, life on Centrelink can feel like being stuck inside a feedback loop.

“It just takes up everything,” the 22-year-old from Glenorchy, in Hobart’s northern sub urbs, told Guardian Australia. “There’s this huge stigma around being on government benefits, like you’re too lazy to work. So you feel all this pressure to get a job.

“But then you get knocked back and knocked back and knocked back. People always tell me to volunteer to get experience. That’s a great idea, but if you’re on Centrelink you barely have enough money to pay rent so even the cost of travelling to do that is too much.”

Prendergrast is about to transition from youth allowance to Newstart, which will bump her fortnightly income from $445 to about $538.

She’s far from alone â€" about 647,000 single Australians receive Newstart and youth allowance â€" but a new report from the Australian Council of Social Services and the University of New South Wales suggests she may be right that fewer people understand what it’s like to live in the country’s lowest income bracket.

The Inequality in Australia report maps changes in income and wealth inequality over time. Released on Tuesday, the report paints a picture of a country increasingly divided by its back pocket.

It says the richest 20% of Australian households own 62% of all wealth, while the lowest 50% own just 18%. The average household wealth in the highest 20% group is $2.9m, five times that of the middle 20% and almost a hundred times that of the lowest 20% at $30,000.

The report found that a person with a household income in the highest 20% of the population has five times the disposable income of the lowest 20%.

Average weekly disposable income by household income group in 2015-16 Average Australian wealth, by wealth group, 2016

At the extreme end of the scale, the top 1% have an average weekly disposable income 26 times the income of a person in the lowest 5%.

Acoss chief executive Cassandra Goldie said the report’s findings “deeply challenges our sense of Australia as an egalitarian country”.

â €œThe 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,” she said.

“We should not accept increased inequality as an inevitable byproduct of growth.”

While income inequality has stagnated since the global financial crisis, the report warns that “inconsistent social security policies” such as the decision to freeze Newstart payments while indexing pensions to earnings, along with “a long-term trend towards greater inequality in hourly wage rates, and growing inequality in the distribution of wealth” were “likely to reassert themselves and increase inequality once stronger economic growth is restored”.

But while income inequality has slowed, household wealth has become even more concentrated thanks in part to “generous tax treatment for superannuation and a property boom”.

Average Australian we alth, by wealth group, 2016

Wealth inequality increased most strongly between people under 35 years, thanks mainly to “rapid growth in the average value of shares, financial and business assets and investment property held by younger households”, and the concentration of these assets in wealthier, younger households.

Prendergrast said she could see the differences in income among her peers.

Trends in average wealth by wealth group, 2003 to 2016

“You can see it. It feels like everyone else my age is out partying and seeing their friends all of the time and I’m at home applying for jobs ,” she said.

“It can be frustrating because some people are born with privileges that they can’t control. They don’t see that they’ve got a leg up already to getting decent jobs and things like that. It makes it difficult to join in.”

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Source: Google Australia | Netizen 24 Australia

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