The RICHEST Australians continue to grow richer as those on lower incomes struggle to keep up.
Following a temporary narrowing due to Covid-era support payments, the wealth divide has shot to its highest level in more than 20 years, according to the Melbourne Institute’s long-running HILDA survey.
The Gini coefficient, which registers a higher score the wider the distribution of wealth and incomes across households, reached 0.321 in 2022, when the latest survey was carried out.
That’s a record high for the survey, which has been tracking more than 17,000 Australians since 2001.
Survey co-director Roger Wilkins said it was difficult to determine what was behind the divergence in incomes.
“It doesn’t launch us into extreme levels of inequality by international standards but it does reflect a fall in incomes for some Australians, while incomes for people at the top have risen quite strongly,” Professor Wilkins said.
Median incomes fell from $62,195 to $61,863 between 2021 and 2022, the survey found, but the fall was greater for low earners.
Rising housing unaffordability exacerbated the gap in wealth between older and younger Australians, given home ownership is a key driver of wealth.
Home ownership declined 3.7 per cent over the survey period to 64.4 per cent. People aged 25-28 in 2022 had the lowest rate of home ownership at 18 per cent, while 78 per cent of people aged 69-72 owned a home.
Over the full 20-year survey period, older couples experienced the strongest growth in median wealth, up 157 per cent to more than $1.3 million.
Single parents had the lowest median wealth at just $152,979 and also experienced the highest rates of poverty, housing stress and financial stress by household make-up.
Financial stress refers to an inability to pay for essentials – like food or electricity bills – while housing stress means rent or mortgage costs account for more than 30 per cent of household income, for a household in the bottom 40 per cent of the income distribution.
Inga Lass, a senior research fellow at the Melbourne Institute of Applied Economic and Social Research, said high childcare costs hit single-parent families the hardest.
“Governments can increase the amount of welfare support to ease financial pressure but in the long term, what most effectively protects people from poverty is good employment opportunities,” Dr Lass said.
