As Australia’s rich get richer, this generation shines the brightest

They represent just one-fifth of the population but one group of Australians holds half the nation’s wealth. Are they under threat?

Is it just me, or do you find it mind-blowing just how wealthy so many Australians are?

In the past week we’ve been handed The List – Australia’s Richest 250, by The Australian, unveiling that the nation now has a staggering 139 billionaires, with five of them worth more than $20 billion each.

Mining magnates Gina Rinehart and Andrew Forrest topped the list, each with a lazy $35 billion-plus, followed by Visy’s Anthony Pratt and family, property developer Harry Triguboff and everyone’s favourite wannabe PM, Clive Palmer.

Some see that level of wealth as obscene, and is envy too of millions of everyday Australian millionaires.

Also released in the past week was income and wealth data crunched by social research company McCrindle, and it paints a clear picture of who owns what.

Gina Rinehart is Australia’s richest person, worth $37 billion.

It shows average household wealth in Australia is now $1.04 million, and there is a huge disparity between the haves and the have-nots.

McCrindle divides households into quintiles – five groups each representing 20 per cent of the population – and says the top quintile has an average $3.27 million of wealth, 93 times the average wealth of the bottom 20 per cent who own $35,100.

The middle 20 per cent of households have average wealth of $588,400, and even that would seem incredibly high for the one-third of Australians who don’t own a home or have big super balances.

Huge discrepancies also are found in household income, which averages $121,108 nationally but the top 20 per cent earns $288,000 while the bottom 20 per cent earns just $25,000 a year. The middle 20 per cent earns about $93,000, around the size of the average Australian full-time wage.

The McCrindle data also illustrates a wide gap between generations, and illustrates who has the biggest slab of Australia’s wealth.

Step up, Baby Boomers – you own 49 per cent of everything despite representing just 21 per cent of the population.

There are fewer Baby Boomers (5.4 million) than their Generation X kids (6.7 million), and Gen X owns 27 per cent of Australia’s household wealth, while Generation Y owns 15 per cent and “Builders”, aged over 75, have 7 per cent.

This leads to a big question: are Baby Boomers always going to be the nation’s richest generation?

Baby Boomers own half of Australia’s wealth, despite being just one-fifth of the population.

This is not a Boomer-bashing exercise. They cop enough criticism over their superannuation tax breaks, free tertiary education and good fortune to buy houses much at much cheaper prices decades ago. But remember they also faced 17 per cent home loan interest rates in the 1990s while borrowers today are horrified by 6 per cent rates, and many worked very hard to become wealthy.

While Boomers are today’s richest generation, I can see Generation X overtaking them in the coming decade.

This is good for two reasons. One – I’m from Gen X. And two, it gives hope to the younger Gen Y and Gen Z brigade that they two will eventually rule the roost for riches.

McCrindle splits Gen X into two groups – older ones aged 45-54 and younger ones aged 35-44. The older Gen Xers today have average household wealth of $1.12 million, so it’s not impossible to see many reaching Boomer levels near $1.5 million in the next decade or two.

The biggest factor, of course, is that Boomers will die, leaving their vast wealth to their Gen X, Y and Z offspring. Everybody dies.

Originally published as As Australia’s rich get richer, this generation shines the brightest