Media release | Thursday, 18 April 2024
New research by ACOSS and UNSW Sydney reveals the widening wealth gap between people with the most and least, even as income inequality slows.
The latest Poverty and Inequality Partnership report, Inequality in Australia 2024: Who is affected and how, shows the average household wealth of Australia's highest 10% growing from $2.8 million to $5.2 million (an 84% increase) over 20 years. Meanwhile, the average wealth of the lowest 60% has risen from $222,000 to $343,000 (a 55% per cent increase).
Nearly half (45%) of the increase in household wealth since 2003 went to the highest 10% (those with at least $2.6 million) and half of this increase to wealthy older people (over 64 years).
Wealth inequality is also growing among households aged under 35, even though they hold just 5% of all wealth. The average wealth of the highest 10% rose from $928,000 to $2 million (an increase of 126%) since 2003. At the same time, the average wealth of the lowest 60% of younger households – largely excluded from home ownership – rose just $68,000 to $80,000 (39%).
The report also shows wage inequality falling between 2021 and 2023, when unemployment dropped below 4%. During that time, wages growth for the lowest 10% (up 4.9%) outpaced the highest 10% (up 3.3%).
But ACOSS CEO Cassandra Goldie warned that rising unemployment, driven by higher interest rates, would be disproportionately felt by people relying on income support as low as JobSeeker at $55 a day.
"These disturbing figures show that people with the lowest income and least wealth are being left behind by the increasing inequality in Australia," she said.
"Without major reform to housing, superannuation tax breaks and income support, the divide between those with the most and those with the least will continue to deepen. The fastest and most efficient way to support those worst affected by income inequality is by raising the rate of JobSeeker to at least the pension rate of $80 a day.
"Reducing tax concessions for negative gearing and capital gains, as well as superannuation, that speed wealth accumulation among the highest 10% and increase housing prices would help stem growth in wealth inequality."
Scientia Professor Carla Treloar from UNSW Sydney said:
"This research shows that the main cause of income inequality is unequal distribution of earnings, through inequality of paid working hours and hourly wages.
"It shows, too, that the solid increase in employment over the past couple of years has reduced individual earnings inequality.
"The answers are clear – full employment reduces inequality. Increasing income support payments reduces inequality. Reducing those tax concessions that disproportionately benefit those with the most reduces inequality."
UNSW Sydney Vice-Chancellor and President Professor Attila Brungs said:
"The Poverty and Inequality Partnership between ACOSS and UNSW draws on the strengths of both organisations to understand and address the drivers of poverty and inequality in Australia.
"Through high-quality research and advocacy, the Poverty and Inequality Partnership provides evidence-based insights that help focus the national attention on how we can do better for the millions of Australians who experience poverty and inequality. Highlighting where policies create unfair outcomes is important to drive positive change and create a more just and equitable society."
Mission Australia CEO Sharon Callister said:
"The relentless growth in wealth inequality revealed in this report stands in sharp contrast to the level of income support many people have to rely on, especially the $55 a day JobSeeker Payment. It should be lifted to at least $80 a day. More people and families across Australia find themselves grappling to make ends meet, with fundamental necessities like a secure, safe home slipping further out of reach.
"These aren't just statistics for Mission Australia; it's what our frontline staff witness every day - the faces of individuals and families struggling against the tide of inequality. We call for a more equitable Australia where everyone is afforded dignity and has the opportunity to thrive. "
Jesuit Social Services CEO Julie Edwards said:
"This research shows that wealth inequality across Australia has continued to increase over the past 20 years. At the same time, we are currently in the midst of a cost of living crisis that has compounded challenges for many of the people Jesuit Social Services works with. We call on our political leaders to urgently provide better support to people on the lowest incomes, including people receiving income support payments.
"Raising the rate of Jobseeker to at least $80 a day should be the starting point to begin lifting people on income support above the poverty line, which will ultimately help to prevent homelessness and give more people a chance to lead positive lives."
