In the last two decades, the average household wealth of the highest 20 per cent rose at four times the rate of the lowest 20 per cent. Much of this wealth is in property. The report finds that contrary to the popular image of the ‘mum and dad investor’, the wealthiest 20 per cent of Australians hold 82 per cent of the value of all investment property, and 78 per cent of all shares and financial investments. The growth of superannuation assets also contributed significantly to the overall increase in wealth inequality.
In a country which recorded the fourth highest average wealth per adult in 2022, it should be of concern to all of us that many Australians still struggle to make ends meet.
Dropping off the Edge is Jesuit Social Services’ landmark research into locational disadvantage across Australia, conducted over more than 20 years. The 2021 iteration of the research shows that a small but persistent number of locations in each state and territory across Australia continue to experience complex and entrenched disadvantage.
We believe that every Australian should have access to the opportunities in life that will enable them to lead good lives – to access education and employment and safe and affordable housing, live in safe communities, and see the next generation thrive. As the report writes, excessive inequality can be damaging to our society, undermining social cohesion and concentrating power in fewer hands.
Australian Council of Social Service CEO Dr Cassandra Goldie says, “left unchecked, growing wealth inequality threatens to exacerbate and entrench generational, spatial and social divisions in our community. Governments can reverse that tide by fixing inequities in our housing and superannuation policy that disproportionately benefit those with the most.”
The report also highlights the direct impact of Government income support policy, finding that during the first year of recovery from the COVID recession (2020-2021), temporary government income supports increased average household incomes and reduced income inequality, helping the lowest 20 per cent more significantly than other groups. This change was only temporary, though, with the removal of COVID income supports in 2021-2022 reversing the progress made.
We witnessed the profound impact of increased income support payments on our program participants firsthand. Some of our participants were able to access rental accommodation and afford medication or essential items such as warm winter clothing.
Anecdotal evidence from our programs showed positive changes, such as a decrease in substance misuse, and some participants achieved a measure of stability in their lives that they hadn’t previously enjoyed. Our participants had an increased sense of hope and their outlook changed. These insights are in line with findings that the Coronavirus Supplement lifted many people out of poverty.1 Poverty fell by four-fifths among people in households on the JobSeeker Payment, from 76 per cent in 2019 to 15 per cent in June 2020.2
Jesuit Social Services’ CEO, Julie Edwards, says the response to the pandemic demonstrated it is possible to reduce income inequality and ensure that people do not have to live below the poverty line in Australia.
“For the marginalised people we work with every day, the temporary Coronavirus Supplement was the difference between being able to put food on the table and afford medication, and to put a roof over their heads.
We call on our leaders to commit to sustained systemic reform to enable all Australians to live a dignified life.”
The next publication in this series of reports will examine the characteristics of people at different points along the income and wealth spectrum, and the main sources of income and wealth held by people with different characteristics, as well as the impact of government benefits and taxes on the distribution of income.
