Wealth inequality worsening: Roy Morgan research

The Roy Morgan Wealth Report, which included research from a decade-long survey (2007 to 2017) of over half a million Australians, found that net wealth has “grown strongly”, but has been largely accumulated by the wealthiest 10 per cent of Australians, with the poorest 50 per cent of Australians slipping from a 3.9 per cent share of private wealth in 2007 to 3.7 per cent in 2017.

Key findings of the report include:

• The wealthiest 10 per cent of Australians with an average per capita wealth of over $2 million hold 48.3 per cent of net wealth compared to 46.8 per cent in 2007, while the poorest 50 per cent of Australians have seen their total share of net wealth fall from 3.9 per cent to 3.7 per cent.
• Growing personal wealth is highly correlated to income level, with those earning over $130,000 having an average net wealth ($1.2 million) nearly five times than those earning under $15,000 ($248,000).
• Country NSW and Victoria are falling behind their states’ capital cities, mainly due to capital gains in the metropolitan housing markets; though in other states, country areas are only marginally behind their capital cities.

Reflecting on the results, CEO of Roy Morgan Michele Levine said: “Inequality is a growing problem, but if policymakers and the business community are going to turn that around, they have to understand the complexity of the low-wealth groups.

“It would be easy to look at the lowest 10 per cent by net wealth and think of them as a stranded group of ‘poor people’, but it’s not that simple.

“In that poorest 10 per cent, there is a large group of young Australians who have built up neither assets nor debts — hence their low net wealth. And there is also a group of older Australians who own substantial assets, but whose large debts cancel out their net wealth and bring it into the lowest 10 per cent group.”

Ms Levine urged policymakers to address wealth inequality, regardless of where they sit on the political spectrum.

“Tackling inequality is not a matter of left or right — addressing the needs of poorer groups benefits the entire community and the economy generally,” the CEO added.

“But that is not going to happen unless we break ‘the poor’ down into the right sub-groups and find solutions suited to their particular needs.”

[Related: Property resale profits lowest since 2013]