It’s official: Australia’s rich are getting richer

The ABS has released its biennial Household Income and Wealth survey, which confirms that wealth inequality has unambiguously worsened:

The distribution of wealth is more unequal than the distribution of income. Graph 1 shows that the wealthiest 20% of Australian households owned 63% of total household wealth in 2017–18. By comparison, the lowest 20% of households owned less than 1% of all household wealth…

The lowest 20% of households, in terms of net worth, had a mean net worth of $35,200. In comparison, the mean net worth of the wealthiest 20% of households was more than 93 times that of the lowest 20% of households, at $3.2 million. The mean net worth of all households in Australia in 2017–18 was $1.0 million while the median was much lower at $558,900…

The Gini coefficient for wealth is typically higher than for income, reflecting greater inequality in the distribution of wealth. The Gini coefficient for wealth in 2017–18 was 0.621.

Middle and high wealth households have experienced a real increase in average net worth over the 14 years. Middle wealth households had an average net worth of $564,500 in 2017–18 compared to $415,800 in 2003–04 (adjusted for inflation). High wealth households increased in real terms from an average net worth of $1.9 million in 2003–04 to $3.2 million in 2017–18.

Low wealth households did not experience any real increase in net worth over this time period with the average net worth of $35,200 in 2017–18 similar to 2003–04 ($34,200).

One factor driving the increase in net wealth of high income households is the value of property (owner-occupied and other property). For high wealth households, average total property value increased by $709,100 between 2003-04 and 2017-18 from $1.14 million to $1.85 million. For middle wealth households average property values increased by $158,300 (from $353,800 to $512,100). Low wealth households that owned property had much lower growth of $10,100 to $18,100 over the fourteen years…

While wealth inequality has worsened materially since 2003-04, income inequality has been more stable:

Finally, the ABS found that over the past decade income growth has been particularly slow, with average weekly household incomes increasing $44 to $1,062 in 2017–18. In comparison, in the four years up to 2007–08 average weekly household income grew by $220 in real terms to $1,018.

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