'Rich list' just got even more wealthy while inequality grows

June 7, 2019
The rich are getting richer at an increasing rate, while the poor are receiving a decreasing share of the nation's wealth

The 2019 Rich List, published by the Australian Financial Review in late May, revealed that the wealth of the 200 wealthiest people in Australia has increased by more than 20% over the past year. Their combined wealth totalled a massive $342 billion.

That compares to a total wealth for the top 200 in 1984, when the Rich List was first published, of $6.4 billion. That's a 53-fold increase in 35 years and still a 17-fold rise if inflation is taken into account.

In 1989, the richest 200 Australians owned about 1.6% of the country's wealth. Now they hold almost 3.4% — more than double the proportion. There are currently 91 billionaires in Australia, compared to 50 just four years ago.

In short, the rich are getting richer at an increasing rate, while the poor are receiving a gradually decreasing share of the nation's wealth .

According to figures compiled by the Productivity Commission and the Organisation for Economic Co-operation and Development (OECD), Australia's wealth disparity is much greater than its income inequality.

Australia falls around mid-table on income distribution for advanced capitalist countries, which incorporates social welfare and tax rates. But, Australia has a higher level of inequality in its distribution of wealth than many other OECD countries.

Moreover, wealth inequality has increased over the past 10 years: official figures show a 7% rise in inequality between 2003–04 and 2015–16. These figures, based on household surveys, are very likely to understate the real level of wealth disparity.

In Wealth inequality in Australia: 2012 to the present, published in May by the Evatt Foundation, Christopher Sheil and Frank Stilwell, write: "For the first time in more than half a century, it is clear that the richest 10% of Australian households now own more than half the nation's private wealth. Wealth inequality has grown significantly.

"Over the four years from 2012, the proportion of the nation's wealth owned by the top 10% increased from 48.1% to 50.2%. Most of the increase went to the top 1%, whose share of total wealth rose from 14.2% to 16.2%.

"The increase in the wealth-share owned by the top 10% is about equal to the total existing wealth of the poorest 40% of Australia's households, whose share has remained virtually stable at 2.8%. In other words, most of the increase in the wealth-share owned by the top decile has come at the expense of the proportion owned by a broad middle-class."

In short, the polarisation between the poorest section of Australian society and the wealthiest is increasing, with a net transfer of wealth occurring from the working class and lower middle class to the super rich. 

The Scott Morrison Coalition government's successful election appeal to the middle sector of the community, and its mantra of "Jobs and growth, jobs and growth", is based on the myth that growing wealth is being shared by all. On the contrary, the Coalition won the election on the basis of a big lie.

The big end of town won the election after all; and the Morrison government's plan to flatten the rate of income tax on incomes up to $200,000 and to give huge tax cuts to big business, will accelerate Australia's inequality gap.

The Coalition's electoral scare campaign about Labor's supposed "retirement tax" and mythical "death tax" spooked many retirees into voting for Morrison's program to increase the flow of wealth to the very richest section of the population — not to themselves.

The conclusion the Labor Party should draw is to not cave in to Morrison's big lie on tax, but to oppose outright the Coalition's tax plan, and campaign in favour of a genuine progressive tax system, in which big companies and the super-rich are made to pay their share.

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