A new report has found that wealth inequality is increasing in Australia, with older Aussies allegedly better off due to home ownership and an increase to the Age Pension.
The Inequality in Australia report, compiled by the Australian Council of Social Service (ACOSS) and University of New South Wales, claims the average wealth of older Aussies (64-plus) is increasing, while the wealth of younger generations has declined.
The findings show that households headed by a person aged over 64 saw their average wealth grow by 57 per cent, to $1.3 million, between 2004 and 2016. However, households headed by someone under 35 saw growth of just 22 per cent to a total of $300,000.
The average wealth of households headed by a person aged 45 to 63 grew by 36 per cent to $1.2 million. While for households headed by those aged 35 to 44, the growth was 28 per cent to $700,000, according to The Guardian.
“For the first time the highest level of net wealth sits with people who are over 64 years of age. We’ve had a big decline in the level of wealth for people who are under 35,” Cassandra Goldie, ACOSS CEO, told AM radio. “This reflects the growing difficulties many younger people face in raising the funds to purchase their first home.”
The findings also showed that, despite wealth inequality growing, overall income equality has actually plateaued since the Global Financial Crisis, with the report attributing that in part to the increase in Age Pension rates.
Goldie added: “Positive story is the role the Age Pension increase has played in flattening of income inequality.”
The report, which was released on Tuesday, maps changes in income and wealth inequality over time. It revealed that the richest 20 per cent of Aussie households own an enormous 62 per cent of all wealth, while the lowest 50 per cent accounted for just 18 per cent.
It also claims the average household wealth in the highest 20 per cent group equates to $2.9m, five times that of the middle 20 per cent and almost a hundred times that of the lowest 20 per cent at $30,000. While someone with a household income in the highest 20 per cent of the population has five times the disposable income of the lowest 20 per cent.
While the inequality report claims that younger Aussies are finding it harder than ever to get a foot on the property ladder, another recent study showed that older Australians are one of the fastest-growing groups of renters with an increasing number of retirees forking out for rented properties.
The inequality report reads: “All things being equal, growth in wealth inequality among younger households suggests that wealth inequality is likely to continue to increase, especially if home ownership rates among younger cohorts continue to decline.”
While findings published in the Grattan Retirement Incomes Model (GRIM) earlier this month stated that older Aussies are “falling off the housing ladder”, and predict the situation will only continue to worsen for younger generations as they age.
“Falling home ownership rates among younger generations mean many more retirees in future won’t own their homes,” the report reads.