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Wealthy Australians are growing their incomes and their assets faster than the middle classes.
INCOMES have been rising for the nation’s richest households while middle Australia has stagnated.
New figures from the Australian Bureau of Statistics show that the average income for the top 20 per cent of households has climbed 7 per cent in two years to $2037 a week. However, earnings for the middle 20 per cent of households were up just 1.3 per cent to $843 a week.
The ABS Household Income and Wealth data shows the average income for all households was $998 per week in 2013-14, while their average net worth was $809,900, up from $764,500 two years prior and driven by rising house prices and superannuation.
Rising house prices has helped the rich in society most. A five bedroom, three bedroom house with two car spaces at 8 Wentworth Place, Point Piper, Sydney, is on the market for the well-heeled only. Picture: realestate.com.auSource:Supplied
Social researcher Mark McCrindle said the gap between high-income households and the rest had been widening for 20 years.
“And that’s after the tax system has done its best to even the score,†he said.
The wealthiest households now earn more than five times as much as the bottom 20 per cent, and their average net worth is 70 times higher — at $2.5 million versus $35,500.
Mr McCrindle said most of their growth was coming from increases in investments.
“If you want to work out how to get into that top quintile, it can’t just be wages,†he said.
“Rising wages are not keeping pace with the increasing cost of living. Wage increases are behind property price increases and that’s the challenge Middle Australia faces.â€
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CommSec chief economist Craig James said the main form of wealth for people is the value of their home or homes.Source:News Limited
CommSec chief economist Craig James said the ABS data was for 2013-14 and did not reflect further growth in property prices, superannuation and shares last financial year.
“The main form of wealth for people is the value of their home,†he said.
Rising superannuation balances were also growing people’s net worth, particularly among older Australians. The average household super balance for couples aged 55-64 climbed 50 per cent to $488,000, the Association of Superannuation Funds of Australia said.
“Superannuation was a major driver in the increase in household wealth over the two years surveyed, with the average super balance per household increasing by 21 per cent from $132,000 to $160,000,†ASFA chief executive Pauline Vamos said.
The ABS said two-thirds of households owned or partly owned their home, and more than 70 per cent were servicing some form of debt.
“Average household wealth for those households who were renting was about 21 per cent ($183,000) of the average wealth of owner-occupied households with a mortgage ($857,900) and 13 per cent of owner occupiers who owned their home outright ($1.4 million),†it said.