The Wealth Disparity in Australia and Why It’s a Huge Problem
We have heard of the strong economic growth in Australia and how this growth has been instrumental to many developments in terms of the property market. However, some issues regarding the widening gap between the rich and the poor have also been observed. The gap that is seen recently is at its widest in over ten years. According to the Australian Bureau of Statistics, which conducts a survey of thousands of Australians, high wealth households experienced growth on their average net worth. In 2003 to 2004, the recorded average net worth of high wealth households was $1.9 million. By 2017 to 2018, the average net worth was $3.2 million.
So what about the low wealth households?
Unfortunately, low wealth households have not experienced this much growth—or any for that matter. According to the Australian Bureau of Statistics, any increase in net worth was not recorded. The report stated that from 2017 to 2018, the average net worth of low-income households was $35,200 which is less than $1000 higher than the figures back in 2003 to 2004. In other words, there’s not much to be happy about. While it is true that it is good if wealth is growing within a nation, it’s not good news when the other side of the spectrum is not doing so good.
This data shows that seems like the wealthy is going to keep getting wealthier.
In terms of incomes, the wealth gap also widened. The average weekly household for four years to 2007 to 2008, the recorded income increased by $220. By 2013 to 2014, it grew to $1067. The following survey released data that these figures fell, and from the fall it only grew to $1062 by 2017 to 2018 survey.
Out of all the areas in Australia, NSW remains to have the richest households. Victoria is known to do better at income growth across the economy of the country. According to the survey, incomes in all Victoria have all experienced a rise. However, it’s Tasmania that experiences a great boost in terms of incomes while Western Australia has experienced the biggest slump.
What does this mean for homeownership?
Homeownership in Australia is sort of the gauge in terms of one’s wealth. Because of the property prices, the market activity has been quite underwhelming for the past few years because of many factors. Recent reports have stated that one of the biggest problems in Australia right now is housing unaffordability. The fact that low-income households struggle, even more, this means that homeownership is going to be impossible for them. Rents have also become quite unstable since the survey. This could only mean that the rental population increased more.
The survey also pointed out that there are also issues about debt among Australians and seems like they are holding more debt than they earn. This is largely because of the mortgages that they have to pay. Considering that low-income class workers have not experienced with their salaries, I think it’s high time that the government looks into appreciating the efforts of workers more and look into changing this situation. This way, more people would be able to afford their own homes. In the meantime, rooming houses like Xotel would be able to help them to have a place to stay.