Our rich people think they are poor

Has our class system finally broken or is the cost of living as tough for the wealthy as it is for the poor in Australia?

Are our expectations of overseas holidays, new cars and latest technologies out of control and forcing “average” to become way above what it used to be?

In new data just out, an Ipsos Australia poll has identified that two thirds of Australia’s high earners don’t think they are rich, calling themselves “middle income” and “lower middle class” or “working class”.

We’d hate to think how they would live on the pension!

It seems our lifestyle choice of earning and spending is catching up with the most high earners, and they are feeling left behind by their own expanding costs of living.

In the people surveyed each brought home more than $200,000, seeing them sit in the top 10 percent of households but only 2 percent think they are upper class.  44 percent said they felt like they were middle class and 31 percent called themselves upper middle class.

“Some believe the average Australian has assets of more than $1 million. Many also agreed you need an above-average salary to be considered middle class, with the consensus being you need a salary of at least $100,000 or more, potentially also be a white collar worker, have an investment property or the house paid off, and be living in a major metropolitan area,” said Lara Bourguignon from MLC.

Interestingly, almost half of people surveyed considered themselves to be middle class when in reality only about 20% fit into this middle grade.

Sixty per cent of social grade A (approximate household income $145,000) and 56% of social grade B ($105,000) underestimate their position, believing themselves to be middle class. Large portions of the lower social grades consider themselves middle class.

The frightening statistic is that our wealthiest households are struggling to save money at all, and one in five are living from week to week.

Imagine how they’d live on the pension, or on a combination of the pension and superannuation.

Australia is a tough place to live, there’s no doubt about it. The country’s high income earners think they are doing it so tough that they should not have to part with their tax breaks.  The pensioners are doing it so tough they can’t contemplate entertainment or a little bit of fun.

It’s a big question and one we all need to think about. Are we creating a nation of poor, with everyone’s expectations too high? Is it too late or can we change expectations?