A new report released by the Organisation for Economic Co-operation and Development (OECD) claims Australia has one of the best wealth distributions out of all advanced economies. In the seven years since the global financial crisis, Australia is one of the only advanced countries where income distribution became more equal. Since the 1990s, income inequality has increase, but is still below the average for comparable countries. The top 10 per cent receive nine times more money compared to the bottom 10 per cent, which is slightly below the OECD average of 9.6 per cent.
The report notes that Australia stands out because of one particular unique factor. In most advanced economies, part-time work usually results in lower wages. However, in Australia, non-standard working arrangements often generate higher wages. With the exception of Spain, the other four countries with more equal distributions of wealth are all much poorer than Australia. The wealthiest 5 per cent of Australian households have a net wealth of about US$2.2m (A$2.78m), which is slightly above the OECD average. The top 1 per cent of Australians have a net wealth around US$2.78m, which is also slightly below the OECD average.
The middle class of Australia, which makes up about 60 per cent of the total population, have an average net wealth of US$211,000, which is 41 per cent higher than the OECD average. Compared to the advanced country with the highest amount of economic inequality – the United States – the median household has an average net wealth of US$56,724 while the top 1 per cent have an average net wealth of US$15m. The only countries with a higher average net wealth than Australia are the United States and Canada.
Author: Matthew Dibb
May 22, 2015
Matthew has an extensive track record in equity markets and derivative advisory. Spanning a career in several investment banks and prviate wealth groups including Macquarie Bank, his specialist knowledge relates to capital market advisory and equity market analytics. Matthew has a diploma in Financial Advisory, Applied Finance and is ADA 1 & 2 accredited.