The wealth inequality pandemic: COVID and wealth inequality

The Australian Council of Social Service (ACOSS) and The University of New South Wales (UNSW), have released their fourth of a series of reports examining the impact of the COVID pandemic on wealth inequality in Australia.

The purpose of the Build Back Fairer Series is to help us understand the impacts of the COVID pandemic and government policy responses to it on people’s incomes, wealth, employment and housing and to assess which groups and regions were most affected.

This report will assist decision-makers to design policy responses to build back fairer in a manner that eases wealth inequality and improves housing affordability for those on the lowest incomes.

Key Findings

  • Households in Australia are on average the fourth-richest in the world, but many are financially vulnerable due to high debt or low financial buffers.
  • Household wealth grew as much over the past three years as in the previous 15 years. Two thirds of the increase in wealth came from house price inflation. Residential property values rose 22 per cent through the year to December 2021 – the highest annual increase in 35 years.
  • Wealth inequality rose sharply from 2003 to 2018, then declined slightly in the pandemic. Rising house prices moderated overall wealth inequality, as housing is distributed more evenly across the population than other kinds of wealth) but shut younger people and those with low incomes out of home ownership.
  • Household wealth is still shared very unequally: The richest 10 per cent of households has an average of $6.1 million and almost half of all wealth (46 per cent), while the lower 60 per cent (with an average of $376,000) has just 17 per cent of all wealth.

Build Back Fairer Series

This is the fourth in the ACOSS and UNSW Sydney Poverty and Inequality Partnership’s COVID-19 Build Back Fairer Series. You can read reports one, two and three in the series.

Report

Click the image to read The wealth inequality pandemic: COVID and wealth inequality. Build back fairer, report 4.