ME Bank has thrown a hand grenade into the inequality debate, arguing that the income divide between rich and poor in Australia is widening, according to its latest survey. From The New Daily:
Income inequality is worsening in Australia, according to comprehensive new research that finds renters, pensioners and students are feeling the pinch while high earners get pay rises.
ME bank’s twice-yearly survey of 1500 households, conducted in June and published on Monday, revealed bigger gaps in income, housing and financial worries across the nation.
In the last financial year, the overwhelming majority of Australian households (68 per cent) saw their incomes stagnate or fall. Only 32 per cent got pay rises – the lowest in three years.
Income inequality was apparent.
Almost half (45 per cent) of households earning less than $40,000 said their incomes went backwards, while almost half (46 per cent) of households on at least $100,000 saw pay rises. These high earners were least likely (17 per cent) to report income cuts.
Meanwhile, the incomes of 46 per cent of the middle class (households earning $75,000 to $100,000 a year) were stagnant in 2016-17, according to the survey.
If the results reflect the nation’s finances, then just over half of all Australians (51 per cent) are living pay cheque to pay cheque, spending all their income or more each month, with nothing leftover.
ME’s consulting economist Jeff Oughton, who co-authored the report, said the findings were relevant to the current debate over inequality because “this is how people feel”.
“The bill shock, the income cuts and the housing stress were quite loud signals,” he told The New Daily…
We already know that home ownership rates have collapsed among younger cohorts, while remaining steady (or increasing) for older cohorts:
And that home owners have benefited immensely from rising house prices, especially in Melbourne and Sydney, whereas renters are doing it tough:
Thus, Australian inequality does appear to be worsening when one takes into account both incomes and wealth.
