The Committee for Economic Development of Australia on Friday released its study into current and future inequality in Australia, finding that while younger workers’ incomes increased at a faster rate than older households over the 1985-2010 period, older generations’ levels of wealth increased more rapidly.
“This has been driven by increasing superannuation wealth as retirement approaches, and increasing property wealth,” explained CEDA chief executive Melinda Cilento, adding that younger households have simultaneously experienced declining rates of home ownership and higher indebtedness.
The report also noted that the 25 years of economic growth have not had a significant impact on general inequality, as the national percentage of people sitting below the population remains stuck at 13 per cent.
“At the same time we are not preparing fast enough to manage emerging risks around technology, which could compound these issues further.
“For example, gig economy workers do not have superannuation deducted by their employer, potentially exposing them to future retirement income gaps,” Ms Cilento said.
“The government should explore the adequacy of superannuation, pension and savings products for contingent workers to ensure this does not become an issue in the future.”
The report also called for the government at all levels to address housing affordability as it affects young Australians. This recommendation made an appearance on last year’s Housing Australia report, Ms Cilento noted.
In particular, the report said the government should consider relaxing and better aligning planning restrictions, while assessing the rules around the means testing of income received by downsizing.
CEDA also pushed for an annual land tax on housing in place of transaction taxes, and called for the government to “review the way in which pensions, superannuation and housing interact in providing support for Australians in the retirement phase”.