Save
Why are Australians so miserable about wealth?
Widely held but inaccurate beliefs that economic prosperity hasn’t trickled down are a reflection of growing uncertainty and inequality in Australia, a prominent economist has said.
Why are Australians so miserable about wealth?
Widely held but inaccurate beliefs that economic prosperity hasn’t trickled down are a reflection of growing uncertainty and inequality in Australia, a prominent economist has said.
According to a recent report from the Committee for Economic Development of Australia (CEDA), 44 per cent of Australians think they’ve gained nothing from the last 26 years of growth.
“This view … is I think in many ways, an inaccurate one,” independent economist, Saul Eslake told the Nest Egg podcast team.
“But there are nonetheless some very important kernels of truth in the view.”
He said the fact that Australians feel so despondent about the country’s economic prosperity is understandable when looking back over the last seven years.
“If we look at say the last seven years since the peak of the mining boom then Australian living standards have, on average, stagnated,” he said.
“That's reflected in the unprecedentedly low rates of growth in people's wages, the fact that most people are paying an increasing proportion of their incomes in income tax over that time, the fact that a growing number of people have been unable to access home ownership in the way that previous generations have done, and in the sense of greater uncertainty about Australia's economic future.”
The mining boom has peaked, and with the descent, Australians are feeling more confronted by international uncertainty.
However, inequality is also taking effect.
Mr Eslake explained, “Although we haven't seen a widening in the distribution of income across income classes in Australia that some other countries have, we have seen a widening in the inequality and in the distribution of wealth.
“We've also seen increases in inequality of income and wealth across age groups. That is, the older have gained at the expense of the young, and between different parts of Australia. Cities, and in particular Sydney, Melbourne and Perth, have gained at the expense of people living outside of Australia's major capital cities, in regional areas.”
He said inequality, or at least the perception of it, is most visible when economies are growing slowly as it’s difficult for a group to improve its position without the perception that it is at someone else’s expense, whether that’s true or not.
This is most visible where age is concerned.
While it’s statistically valid that inequality across income groups hasn’t worsened, those figures “tend to obscure” changing wealth trends across age groups.
“For example, over the last 15 years … the share of income and wealth accruing to or owned by people over 65 has risen, while the share that they pay of personal income tax has declined, and the opposite has been true for people aged between 25 and 45,” Mr Eslake explained.
“Pensions paid to older systems have been indexed in line with or faster than inflation, whereas benefits that are primarily directed towards young people, such as the New Start allowance, or the youth allowance, or living away from home allowance, have barely been indexed at all.”
Quoting Treasurer Scott Morrison’s claim that negatively geared property investors were, by and large, “mums and dads trying to get ahead”, Mr Eslake said he’s surprised more investors aren’t asking, who are the people they’re getting ahead of?
“The answer to that question is increasingly their own children, or their children's peers and friends,” he said.
“I sometimes think, why aren't there more young people on the streets chanting and saying, ‘What do we, like, want? Like, cheaper housing. When do we like, want it? Like, now,’ in a way that people who are now in their 50s might have demonstrated against the Vietnam War.”
To hear more from Saul, tune in to Nest Egg’s latest podcast. Listen here.
RELATED ARTICLES
Expenses
Expert tips to secure your financial safety net
New Zealanders are known for their "she'll be right" attitude, but when it comes to handling unexpected bills, being prepared is crucial. Read more
Expenses
Australians continue to opt for free VPNs, ignoring potential privacy risks
Australians, alongside citizens of Sweden, South Korea, and Mexico, are increasingly choosing to use free Virtual Private Networks (VPNs), despite the potential threats to their privacy. Read more
Expenses
Rooftop solar in childcare centres could cut energy bills by millions
The analysis conducted by Parents for Climate has revealed that the installation of rooftop solar and batteries in early childhood education and care (ECEC) centres could lead to savings of up to $130 ...Read more
Expenses
Corporate Traveller identifies key strategies for business travel savings
Flight Centre Travel Group's Corporate Traveller, a premier service provider for managing SME travel, has shared several effective strategies that enabled their business clients to significantly ...Read more
Expenses
Price no longer the prime factor for energy bills
Many Australians are intrigued but unconvinced when it comes to greening their energy bill. Read more
Expenses
1 in 2 Aussie pet owners spends on their pets more than themselves
Does owning a pet eat into your monthly budget? You’re not alone. Read more
Expenses
The real reason Sydney’s petrol prices are so high
Sydney fuel prices may seem like they’re soaring, but a recent study indicates that they may be cheaper than you think. Read more
Expenses
Morrison backs big pharma, turns back to developing countries
Big pharma is currently fighting to maintain intellectual property protections over COVID-19 vaccines, with Australia refusing to act despite having no pharmaceutical companies. Read more
Expenses
Expert tips to secure your financial safety net
New Zealanders are known for their "she'll be right" attitude, but when it comes to handling unexpected bills, being prepared is crucial. Read more
Expenses
Australians continue to opt for free VPNs, ignoring potential privacy risks
Australians, alongside citizens of Sweden, South Korea, and Mexico, are increasingly choosing to use free Virtual Private Networks (VPNs), despite the potential threats to their privacy. Read more
Expenses
Rooftop solar in childcare centres could cut energy bills by millions
The analysis conducted by Parents for Climate has revealed that the installation of rooftop solar and batteries in early childhood education and care (ECEC) centres could lead to savings of up to $130 ...Read more
Expenses
Corporate Traveller identifies key strategies for business travel savings
Flight Centre Travel Group's Corporate Traveller, a premier service provider for managing SME travel, has shared several effective strategies that enabled their business clients to significantly ...Read more
Expenses
Price no longer the prime factor for energy bills
Many Australians are intrigued but unconvinced when it comes to greening their energy bill. Read more
Expenses
1 in 2 Aussie pet owners spends on their pets more than themselves
Does owning a pet eat into your monthly budget? You’re not alone. Read more
Expenses
The real reason Sydney’s petrol prices are so high
Sydney fuel prices may seem like they’re soaring, but a recent study indicates that they may be cheaper than you think. Read more
Expenses
Morrison backs big pharma, turns back to developing countries
Big pharma is currently fighting to maintain intellectual property protections over COVID-19 vaccines, with Australia refusing to act despite having no pharmaceutical companies. Read more
More articles
OUR PLATFORMS AND BRANDS
- Accountants Daily
- Accounting Times
- Adviser Innovation
- Australian Aviation
- Broker Daily
- Cyber Daily
- Defence Connect
- Fintech Business
- HR Leader
- Independent Financial Adviser
- Investment Centre
- Investor Daily
- Lawyers Weekly
- Money Management
- Nestegg
- Property Buzz
- Real Estate Business
- Smart Property Investment
- SMSF Adviser
- Space Connect
- Super Review
- The Adviser
- Wellness Daily
- World of Aviation
EVENTS AND SUMMITS
- Accountants Daily 30 Under 30 Awards
- ACE25
- Adviser Innovation Summit
- Australian Accounting Awards
- Australian Aviation Awards
- Australian Broking Awards
- Australian Defence Industry Awards
- Australian Law Awards
- Australian Space Awards
- Australian Space Summit
- Better Business Summit & Awards
- Broker Daily Business Awards
- Corporate Counsel Summit & Awards
- Cyber Security Summit & Awards
- Defence Connect Budget Lunch
- Defence Connect DSR Summit
- Fund Manager of the Year Awards
- ifa Excellence Awards
- ifa Future Forum
- Investor Daily ESG Summit
- Lawyers Weekly 30 Under 30 Awards
- Lawyers Weekly Women in Law Forum
- New Broker Academy
- Partner of the Year Awards
- REB Awards
- Reinnovate
- SME Broker Bootcamp
- SMSF Adviser Technical Day
- Super Fund of the Year Awards
- Women in Finance Awards
- Women in Law Awards
- Accountants Daily Podcast Network
- Australian Aviation Podcast Network
- Broker Daily Podcast Network
- Defence Connect Podcast Network
- HR Leader Podcast Network
- REB Podcast Network
- Relative Return
- Space Connect Podcast
- The Adviser Podcast Network
- The ifa Show
- The Lawyers Weekly Show
- The Smart Property Investment Show
PODCASTS
LEARNING AND EDUCATION
MOMENTUM MARKETS NETWORK
LINKS
STAY CONNECTED
Make your nest egg grow. Register now for nestegg updates.