Report backs claims on wealth inequality
     
By MARILYN RODRIGUES

26 June, 2005

Research showing that the top 10 per cent of Australians hold half of the nation’s wealth has bolstered controversial claims by the St Vincent de Paul Society that inequality is growing at a rapid rate.

The society’s claim, based on latest figures from the Australian Bureau of Statistics, and its call for a national strategy to address structural causes of poverty were rejected by Senator Kay Patterson, the Minister for Family and Community Services, and by Prof Peter Saunders, from the Centre for Independent Studies.

But a report by the Melbourne Institute into how wealth is distributed across the country has found that 45 per cent of the wealth is held by the richest 10 per cent of the population, who have a net worth of almost $2 million each.

Five per cent of Australians hold 31 per cent of the country’s wealth.

The findings are based on property and business ownership, bank accounts, superannuation and equity investments and vehicle ownership.

Gary Marks, research associate with the institute, says he is surprised at the level of inequality in wealth.

But Dr John Falzon, national research and advocacy officer for Vinnies, is not.

“That report uses a different measure from our paper (The Reality of Income Inequality in Australia) but it does indicate the fact that income and education are the real determinants of wealth inequality, and that wealth inequality is skyrocketing,” he said. “It’s no surprise unfortunately.”

Vinnies has been involved in a public debate since its paper was published in May challenging Federal Government claims that people on low incomes are better off than they were several years ago.

The paper says that although lower incomes have risen slightly, almost a quarter of Australian households have an income of less than $400 a week while those on the highest incomes have enjoyed a disproportionately higher income rise.

“I think we disturb the comfort zones of some who would like to perpetuate a number of myths around the significant number of Australians being left out in all this prosperity that has been generated over the last 10-15 years,” said Dr Falzon.

“If you continue to perpetuate the myths that people only miss out through their own fault or bad luck, you are then able to justify a withdrawal of government from its responsibility to provide essential services such as affordable transport, health and housing, education and childcare, by saying the market does a good job of providing them anyway.

“You also open the door to undermining the income of people in the lowest income groups, such as the elderly and people with disabilities.