We know true wealth is much more than how much money you’ve got or how many properties you own, but if you’re into counting money, according to the OECD the richest 10 per cent of Australians have gained almost 50 per cent of the growth in income over the past three decades as inequality has widened throughout the Western world.
According to The Age, John Martin, who has just stepped down as the Organisation for Economic Co-operation’s director for employment, labour and social affairs, says new OECD figures estimate that between 1980 and 2008, 22 per cent of all growth in Australia’s household income went to the richest 1 per cent.
Yes the rich are getting richer…
In fact we’re the richest in the world.
This year’s Credit Suisse’s annual global wealth report, shows that Australians have the highest median wealth in the world, and we have the a very low percentage of poor people.
The report shows Australians have the highest median wealth in the world, with average household wealth having grown an incredible 13% a year since 2000. [sam id=34 codes=’true’]
Despite the setback of the Global Financial Crisis, generally the world has done well since 2000 with global wealth doubling.
But what is special about Australia is its staggering growth in wealth considering we’re a developed nation, as emerging markets mainly drove the global growth in wealth.
So how wealthy are we?
The number of Australian millionaires increased by 38,000 to 1.123 million people. Australia’s average wealth per adult is US$402,600 (AU$426,100), which is the second-highest in the world after Switzerland.
And Australia’s median wealth (the wealth of the middle wealthiest person in Australia) is the highest in the world, at US$219,500 (AU$233,504).
The proportion of those with wealth above US$ 100,000 is the highest of any country – eight times the world average. With 1,762,000 people in the top 1% of global wealth holders, Australia accounts for 3.8% of this wealthy group, despite having just 0.4% of the world’s adult population.
When it comes to wealth distribution, most Australians (62.6%) had wealth between US$100,000 and US$1 million.
Only 6.9% of Australians had a net worth of under $10,000 – a very low proportion by global standards.
And it has a lot to do with property.
Australia’s wealth is heavily skewed towards ‘real assets’ (in other words property) as opposed to financial ones. Australians have the second-highest real asset allocation in the world, behind Norway, with most of our wealth being stored in our homes.
The median wealth of adult Australians stands at US$219,500 ($233,504), the highest level in the world, according to the Credit Suisse 2013 Global Wealth Report. Median wealth is the midpoint between richest and poorest.
When taken on a measure of average wealth, Australians fall back to second with US$402,578 per person, behind the Swiss who were the world’s richest on US$512,562).
The number of Australian millionaires increased by 38,000 to 1.123 million people.
Property makes up the biggest proportion of wealth, but given the measure is in US dollars, strength in the Australian dollar during the survey period serves to inflate wealth here compared with other countries.
Australia’s inequality is not as bad as in the US, where the richest 1 per cent gained almost half the growth in individual income over the same period, and the top 10 per cent took more than 80 per cent of the gains.
But it was worse than most, Dr Martin told a Melbourne University audience, giving the university’s annual Corden Lecture in honour of his mentor, Professor Max Corden, now at the Melbourne Institute.
On the OECD’s data, which he conceded may be flawed, Australia’s income distribution is the eighth most unequal in the Western world, topped only by the US, Israel, Portugal, Britain, Spain, Greece and Japan.
Iceland shared its wealth the most, followed by Slovenia, Norway and Denmark.
Credit Suisse chief investment strategist in Australia David McDonald said the nation’s household wealth per adult grew 2.6 per cent in the past year, compared with the global average of 4.6 per cent, but Australia still had the best distribution of wealth among developed nations.
”Although we are up there at a high level of wealth per adult we’ve also got a better spread than a lot of the other developed countries including, obviously, the Swiss, but also places like the US,” Mr McDonald said.
Dr Martin said the rise in inequality occurred throughout the Western world, even in traditionally egalitarian Scandinavia. Inequality grew in good economic times and bad, and in countries with strong employment growth.
Part of the reason is that technological changes have put a bigger premium on highly-skilled workers, he said. The professional and managerial ranks have grown rapidly, while many low-skilled workers have to accept part-time and casual jobs.
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