Omari Gates
Australia has long been considered a middle-class country, but recent reports suggest that wealth inequality is increasing. While Australians are currently the fourth richest people in the world in terms of median wealth per adult, the distribution of wealth within the country is unequal. The highest 10% of households by wealth hold a disproportionate amount of the country's wealth, and this disparity has grown over the past 20 years. Various factors contribute to this inequality, including differences in income, tax concessions, and the impact of soaring housing prices. Despite facing a cost-of-living crisis, the average wealth of Australian households has increased, with the highest 20% of households experiencing a more significant increase than the remaining 80%.
| Characteristics | Values |
|---|---|
| Average wealth of Australian households in 2020 | $628,000 per adult |
| Average wealth of the highest 10% in 2020 | $928,000 |
| Average wealth of the lowest 60% in 2020 | $222,000 |
| Average wealth of the highest 10% in 2024 | $5,248,000 |
| Average wealth of the lowest 60% in 2024 | $343,000 |
| Average household wealth in Australia | $1,022,200 |
| Average wealth of the highest 20% | $2,800,000 |
| Average wealth of the lowest 20% | $24,000 |
| Average wealth of the highest 10% as a percentage of all wealth | 46% |
| Average wealth of the next 30% as a percentage of all wealth | 38% |
| Average wealth of the lowest 60% as a percentage of all wealth | 17% |
| Average wealth of the highest 10% of households ranked by wealth in 2018 | 45% |
| Average wealth of the highest 10% of households ranked by wealth in OECD countries | 50% |
| Average wealth of the highest 20% of households by income | 6 times the lowest 20% |
| Average wealth of the highest 10% of households by income | 2.5 times the middle 20% |
| Average wealth of the highest quintile households | 92 times the lowest quintile households |
| Median wealth per adult in Australia | $263,822 |
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What You'll Learn
Wealth inequality in Australia
Australia is one of the wealthiest countries in the world, with Australians ranked as the fourth richest people globally in terms of average household wealth. However, wealth inequality is increasing in Australia, with the distribution of wealth remaining highly unequal. The highest 10% of households by wealth hold a disproportionate share of the country's wealth, while the majority of the population has a relatively small share.
According to a 2024 report by the Poverty and Inequality Partnership, the average household wealth of the top 10% has grown much faster than that of the bottom 60% over the past two decades. The wealth gap is particularly pronounced between younger households, with the average wealth of the highest 10% of households under 35 increasing by 126% since 2003, while the average wealth of the lowest 60% of younger households has seen only a modest increase. Overall, the top 10% of households by income take home more than two and a half times as much as the middle 20% and six times as much as the lowest 20%.
The consequences of wealth inequality are far-reaching. People experiencing poverty face significant barriers to finding paid work or gaining the skills needed to compete in the job market. Excessive inequality can harm the economy, as economic growth is diminished when resources and power are concentrated in the hands of a few. Addressing the wealth inequality crisis is crucial for ensuring a fair and just society and promoting economic prosperity in Australia.
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Average wealth of Australian households
Australia is one of the wealthiest countries in the world, but it also has a stark wealth inequality. Wealth inequality refers to the unequal distribution of wealth in a society. Wealth is measured through assets held in the main home, superannuation, shares and other financial assets, investment real estate, and other non-financial assets, such as cars.
According to Credit Suisse’s Global Wealth Report, the average wealth of Australian households was $628,000 per adult in 2020, the fourth highest in the world behind Switzerland, the United States, and Hong Kong. However, this total wealth figure was substantially boosted by the wealth of the top 10% of households, who held 45%-46% of all wealth in Australia. In contrast, the lowest 60% of households held just 17% of the wealth. The average wealth of this bottom 60% was $376,000 in 2021-22, a figure that has risen from $222,000 in 2003 and $343,000 in 2024.
The average net worth for all Australian households in 2019-20 was $1.04 million, a sharp increase from the average net worth of all households in 2017-18, which was $1 million. This increase was driven in part by increases in superannuation balances and growth in house prices. Housing now makes up 57% of Australians' wealth, with 42% coming from the family home and 15% from investment properties. The average household balance has grown to $213,700.
Wealth inequality has increased across generations since 2003, especially in the distribution of owner-occupied housing. The wealth inequality pandemic: COVID and wealth inequality report found that overall household wealth grew as much in the first three years of the pandemic as it did in the previous fifteen years, largely due to soaring residential property prices. Two-thirds of this increase was in residential property, which rose in value by 22% through the year to December 2021.
The high level of home ownership and housing wealth in Australia is a major reason for the country's wealth inequality. Property is the major source of debt, with property loans accounting for 90% of debt in high-wealth households and 93% in middle-income households. Lower-income households are less likely to have property debt but are more likely to have outstanding loans for university or vocational education.
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Wealth distribution in Australia
Australia is one of the wealthiest countries in the world, but there is a stark gap between the wealthy few and the many who struggle to get by. Wealth inequality is the unequal distribution of wealth in a society. Wealth is measured through assets held in the main home, superannuation, shares and other financial assets, investment real estate, and other non-financial assets, such as cars.
Wealth inequality in Australia has increased over the past 20 years. The average wealth of Australia's highest 10% of households has grown much faster than the lowest 60% over the past two decades. In 2021, the highest 10% of households by wealth had an average of $6.1 million or 46% of all wealth. The next 30% had an average of $1.7 million or 38% of all wealth. The remaining 60% had $376,000 or just 17% of all wealth. The Gini coefficient, a measure of inequality, rose sharply from 0.573 in 2003 to 0.624 in 2018, indicating a sharp increase in wealth inequality.
According to Credit Suisse's Global Wealth Report, the average wealth of Australian households was $628,000 per adult in 2020, the fourth-highest in the world. However, this wealth is not evenly distributed, with the highest 20% of households by income having almost six times as much income as the lowest 20%. The middle 20% income group has an average of $150 a week from investments and other private sources, while the highest 20% had five times as much at $705 a week.
Income inequality in Australia was higher than the OECD average in 2015, the latest year for which data is available. However, a recent OECD report found that in 2010, Australia's wealth distribution was more equal than the OECD average. The high level of home ownership and housing wealth in Australia are major reasons for this.
The increasing wealth inequality in Australia has left many people behind, especially those experiencing poverty and struggling to find paid work or gain skills to improve their job prospects. There are calls for major reforms to address the growing divide between the wealthy and the poor, including raising the rate of income support payments and reducing tax concessions that benefit the wealthy.
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Income inequality in Australia
Australia has experienced sustained economic growth over the past two decades, resulting in increased earnings from labour and capital. This has benefited households across the income distribution, with Australia achieving the second-highest 'average' income growth among OECD nations between the mid-1990s and late 2000s. However, despite this overall growth, income inequality in Australia has been on the rise during this period.
The highest 20% of households by income have significantly higher average incomes than the lowest 20%. In 2019-20, the highest 20% had an average disposable income of $4,306 per week after tax, five times that of the lowest 20%, who earned $794 per week. The highest 5% had eight times the income of the lowest 20%. Wages comprise 77% of incomes overall, but the lowest 20% rely more on social security (50% of their income), while the highest 5% benefit more from investments (23% of their income).
Income inequality is also evident when comparing the middle 20% with the highest and lowest income groups. The highest 20% have more than twice the average disposable income of the middle 20%, while the lowest 20% have one-sixth of their income. This disparity has been exacerbated by slower income growth in the middle-income group compared to the top and bottom groups.
Wealth inequality, which refers to the unequal distribution of wealth, is closely linked to income inequality. In 2020, the average wealth of Australian households was $628,000 per adult, the fourth-highest in the world. Wealth inequality has increased across generations, particularly regarding owner-occupied housing. The COVID-19 pandemic further impacted wealth distribution, with overall household wealth increasing significantly during this period, largely due to soaring residential property prices.
The main cause of income inequality is the unequal distribution of earnings, through inequality of paid working hours and hourly wages. The removal of COVID-19 income support during 2021-22 also contributed to the increase in income inequality. To address these disparities, measures such as increasing income support payments and reducing tax concessions that disproportionately benefit the wealthy have been proposed.
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Factors influencing wealth inequality
Australia is one of the wealthiest countries in the world, with Australians being the fourth richest people globally. However, wealth inequality is a significant issue in the country. Wealth inequality refers to the unequal distribution of wealth in a society, and it can have harmful effects on both the economy and the people within it.
There are several factors influencing wealth inequality in Australia:
- Income inequality: Income inequality is the unequal distribution of income within a society. It is a significant contributor to wealth inequality, as it impacts a person's ability to accumulate wealth. In Australia, the highest 20% income group receives almost three times the average wages of the middle 20% income group and six times that of the lowest 20% income group. Employment status is a key driver of income inequality, with only 24% of adults in the lowest 20% income group having paid employment, and less than half of these jobs being full-time.
- Wealth concentration: When resources and power are concentrated in the hands of a few, it leads to economic growth being diminished and creates barriers for people experiencing poverty to find paid work or gain skills to improve their job prospects. In Australia, the highest 10% of households by wealth hold a disproportionate amount of the country's wealth, with the majority (the lower 60%) left with a much smaller share.
- Housing wealth: The high level of home ownership and housing wealth in Australia contributes to wealth inequality. Soaring housing prices increase the divide between those who bought their homes when they were more affordable and younger people and those on low and modest incomes. Additionally, high and rapidly growing home prices, along with relatively easy access to credit, have made Australian households more indebted than those in most other wealthy nations.
- Tax concessions: Tax concessions that disproportionately benefit the wealthiest Australians contribute to wealth inequality. Reducing these concessions could help slow the growth of wealth inequality.
- Income support: The level of income support provided by the government can impact wealth inequality. Increasing income support payments can help reduce inequality, while inadequate support can leave people struggling to meet their basic needs.
- Age: Wealth inequality is growing among younger households, who are largely excluded from home ownership due to rising housing prices.
Addressing these factors through policy changes and reforms can help reduce wealth inequality and create a more just and equitable society in Australia.
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Frequently asked questions
Yes, wealth inequality in Australia has continued to increase over the past 20 years. The average household wealth of Australia's highest 10% is growing much faster than the lowest 60%.
The average wealth of an Australian household is $628,000 per adult as of 2020, the fourth-highest in the world. However, this figure can be misleading as wealth inequality is prevalent in the country.
There are several factors that contribute to wealth inequality in Australia, including unequal distribution of earnings, working hours, and wages. Additionally, the high cost of residential properties has also contributed to the wealth gap, as rising house prices benefit those who bought homes when they were more affordable, usually older individuals.
Wealth inequality in Australia has left many people behind, negatively impacting economic growth. Those experiencing poverty face barriers to finding paid work or gaining skills to compete in the job market. Additionally, wealth inequality can lead to a concentration of resources and power in the hands of a few, further exacerbating the divide between the wealthy and the less fortunate.
