A few years ago, we started talking about wealth in Australia.
The idea of wealth as the value that’s distributed around an individual and the value of that individual’s assets and the income that’s generated from that value, we were told, was a very old idea.
It was the idea of Henry George, who argued that the value we saw in our daily lives came from what we paid to others, from the wealth we had accumulated over our lifetime.
For many of us, this is the notion of wealth that’s constantly being measured and measured and assessed.
It was the same idea behind wealth inequality.
But then the wealth gap exploded.
For decades, the Australian Bureau of Statistics (ABS) has been trying to measure the wealth of Australians.
The numbers are staggering: Australia’s richest 10 per cent have an average net worth of $10 billion.
In 2014, they made up almost 80 per cent of the population.
The latest figures show that while we have the most unequal wealth distribution in the developed world, the wealth inequality we’re seeing now is actually quite comparable.
The bottom 50 per cent in Australia have an income that is a third of that of the richest 10.
So, it’s a pretty good picture.
Then there’s the second group, the top 5 per cent.
A wealth gap of $100 billion between them and the top 10 per the richest.
So the difference between what we think of as the richest and the poorest is pretty big.
The top 5per in Australia, for example, have a combined net worth that is about $600 billion.
And the top 1per, the super-rich, have an estimated wealth of $1.5 trillion.
These figures suggest that we’ve got a wealth gap that’s quite similar to that of Germany, which has a wealth inequality of about 30 per cent, according to the Institute for Fiscal Studies.
The gap between the top and the bottom is about the same as that of Portugal, which had a wealth-to-income ratio of about 60 per cent when I joined the Institute, in 2007.
As I was leaving, I realised that the richest people in Australia were the ones who were most dependent on the government.
Their net worth is what they need to live on.
They have a lot of assets that they’re holding onto, and they have the means to buy a house.
So the reason why wealth inequality is such a big issue is because, if the government doesn’t provide a safety net, if people don’t get a bit of wealth to invest in the future, then it’s not really a sustainable future for the economy.
What we’re finding is that we’re moving into a place where wealth inequality has been increasing for some time, even as people’s incomes have grown.
In fact, in the year to the end of August, the median income for people earning $100,000 in Australia was $75,000, up from $72,000 a year earlier.
That’s up 10 per-cent.
In fact, the richest Australians have a net worth roughly five times the median household income of their middle-class counterparts.
And even the poorest Australians are getting wealthier.
This is a pretty big shift in wealth inequality, because what was once the case that we were living in a golden age of wealth creation has turned out to be a pretty dire time to be in a middle-income society.
When we look at the figures, we realise that in the last few years, the number of people with superannuation wealth has fallen from 40 per cent to 24 per cent over that same period.
The richest Australians are now the people with the biggest gap in wealth, the most likely to have it.
That’s because the middle class is disappearing.
That middle class was really important to people.
It provided the backbone of our economic system.
It helped to maintain social safety nets.
But that middle class has been disappearing in Australia over the last decade.
The middle class that was important to those in the middle of the society, is now the one that’s disappearing.
I think we need to be concerned about the wealth that we can’t see.
And, indeed, a lot is being lost.
According to the Australian Institute of Criminology, in 2013 there were nearly $400 billion worth of personal wealth in the Australian economy, with nearly half of it in the form of capital gains.
But those gains are shrinking, as the economy’s become more automated.
Wealth is being captured and used by the rich, and that’s not a good thing.
So what we need is a new economic system that’s based on the commons.
A system that recognises the value and the sharing of wealth, that supports the middle and lower classes in our society, and encourages people to be responsible stewards of that wealth.
With the right political leadership, and the right economic system, we can achieve this.