Many often reflect on the changes they witnessed in society as they age.

One of the most significant and concerning shifts has been the growing wealth gap between the rich and the poor in Australia.

A recent report has illuminated this issue, revealing that the wealth disparity has substantially widened over the past two decades.

The Australian Council of Social Service (ACOSS) and University of New South Wales Sydney’s findings are stark: since 2003, the average wealth of the top 10 per cent of households has skyrocketed by 84 per cent, from $2.8 million to a staggering $5.2 million.

In contrast, the average wealth of the lowest 60 per cent of households has seen a 55 per cent rise from $222,000 to $343,000.

A recent report revealed the widening gap between rich and poor Australian households. Credit: Shutterstock

Cassandra Goldie, ACOSS Chief Executive, expressed her concern, stating, 'These disturbing figures show that people with the lowest income and least wealth are being left behind by the increasing inequality in Australia.'

She called for major reforms to housing, superannuation tax breaks, and income support to prevent the divide from deepening further.

The report also highlighted that 45 per cent of the rise in household wealth since 2003 has gone to the top 10 per cent, with wealthy older individuals (those aged 64 and over) pocketing half of that increase.

This trend is not limited to older Australians; the wealth gap also grows among under-35 households.

The top 10 per cent within this age bracket saw their wealth increase by 126 per cent (from $928,000 to $2 million), while the lowest 60 per cent only experienced a 39 per cent increase (from $68,000 to $80,000).

Income disparity is equally alarming. The top 10 per cent of Australian households earn an average of $5248 a week after tax, which is more than three times higher than the middle 20 per cent and six times more than the lowest 20 per cent.

UNSW Sydney Scientia Professor Carla Treloar pointed out that the main cause of income inequality.

‘This research shows that the main cause of income inequality is unequal distribution of earnings through inequality of paid working hours and hourly wages,’ she said.

‘It shows, too, that the solid increase in employment over the past couple of years has reduced individual earnings inequality.’

While the report noted that a solid increase in employment has reduced individual earnings inequality, the recent rise in interest rates is expected to push unemployment rates higher, which could exacerbate the situation for those on income support.

Cassandra Goldie suggested that raising the JobSeeker rate to at least the pension rate of $80 a day would be the fastest and most efficient way to bridge the income gap.

‘Reducing tax concessions for negative gearing and capital gains, as well as superannuation, that speed wealth accumulation among the highest 10 per cent and increase housing prices would help stem growth in wealth inequality,’ Goldie said.

With the recent rise in interest rates, Australians have also been feeling the pinch when it comes to buying property.

David Koch mentioned the disparity between the younger and older generations in the Australian housing market.

He also explained that younger Australians bear the brunt of soaring interest rates and inflation while their older counterparts remain unaffected. You can read more about it here.

Key Takeaways

• The wealth gap between Australia's richest and poorest households has significantly increased over the past two decades.
• A report by ACOSS and UNSW Sydney shows the top 10 per cent of households had their average wealth grow 84 per cent, while the lowest 60 per cent saw a rise of only 55 per cent.
• The report suggested major reforms in housing, superannuation tax breaks, and income support are needed to prevent the wealth divide from deepening further.
• Income inequality is attributed to the unequal distribution of earnings and working hours, although recent employment increases have mitigated this. Reducing tax concessions for the wealthy and raising the JobSeeker rate are proposed solutions.

What do you think about this story, members? Share your thoughts with us in the comments below.

 

[Gsr]

I agree, the rich get richer and the poor get poorer all the time. I am disappointed that the budget didn’t do anything to help people on Centrelink benefits at all, even though most of them are living well below the poverty line. It didn’t do anything for the homeless either. They seem to be the forgotten citizens of Australia. I’m sure the electricity rebate given to every Australian household and business would have been much better used by giving it to Centrelink recipients and the homeless. After all what help is $300 to the high earners, other than to help feather their nests. Some people wouldn’t even know what $300 looks like, especially when they deal in thousands and millions. This should have been means tested and only given to low income earners who would really appreciate and need the help. The extra millions could have given much needed rise in Centrelink benefits. I know they would spend it and thereby add to inflation, but why the government won’t raise the GST on luxury items, which would help compensate and keep inflation lower is a question that needs answering. Just getting multinational companies and the super wealthy who hide their earnings in family trusts a and other devious schemes to pay their proper taxes would also be a big help. Also the rising trend for sects and such who run very profitable businesses but claim to be a “charity” and pay little or no tax needs to be stamped out. We have one such group in our area who run at least six profitable businesses who claim to be a charity. They all drive very expensive cars, build mansions to live in, live the high life, appear to have money to spend on anything they want, all because they claim to be a “charity” which they are not. The only people they support is themselves. Everyday people see through their schemes but obviously the taxation department and governments can’t.