Australians are richer than ever before, and yet the wealth of households under 35 has barely moved since 2004. What's going on?

We've known for a long time that inequality between generations is getting worse - often framed as 'Boomers v Millenials' and 'the war on young people'.

Along the way young people have been attacked for spending money on the wrong things (avocado toast, lattes, internet) and not the right things (private health insurance).

Now a Grattan Institute report has defined the situation in unprecedented detail, and provided lots of handy stats for when you next get in an argument.

Here's one: Young people are told they waste their money instead of saving, but their spending on 'luxuries' like booze, holidays, cigarettes and clothes has gone down since 2010.

By contrast, spending by households headed by someone aged 55 or older has gone up 50 to 80 per cent in the past six years.

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Measure after measure, young people are losing out to older generations, representing a massive intergenerational transfer of wealth, from young to old.

Young people face stagnating wages and rising underemployment, while being locked into policy and tax settings that favour older generations.

The report warns that young people may be "left behind" and the rising intergenerational inequality risks "straining the bargain" - that is, the implicit promise of working-age generations to care for retired ones, including paying taxes for their welfare.

It recommends winding back age-based tax breaks and negative gearing, boosting welfare payments, reducing the capital gains tax discount, and considering taxing inheritances (something like the 'death tax' scare campaign during the recent federal election).

How did this happen?

Australian household wealth has tripled over the last 30 years, but most of the increase has been accumulated by older generations.

Households headed by someone aged 65-74 have more than doubled their average equivalised net wealth (equivalised means the net wealth equivalent to a single-adult household; it allows for easier comparison between generations).

For young people, though, the situation is very different.

Households headed by someone aged 25-34 have almost exactly the same average equivalised net wealth as they did in 2004.

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The report says there are two main causes: housing and superannuation.

Booming property prices have meant Australians who own a home have seen massive capital appreciation - in some cases, regular houses were earning more through capital gain than the owners were earning in their average-paying day jobs.

Though the market is often described as a 'natural force', the report points out the housing boom was created by policy settings such as assistance for first-home buyers, negative gearing for property investors, and low interest rates.

The boom is also unlikely to be repeated, meaning young Australians who eventually buy a house shouldn't look forward to big capital gains.

The report states: "Even if tight supply continues to keep house prices high, 20 years of average annual growth of 5 per cent above inflation is unlikely to be repeated. Most observers believe prices are unlikely to grow as quickly in future because income growth is likely to be slower, and official interest rates can't fall much further."

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At the same time, tax changes introduced over the past three decades (tax-free superannuation income in retirement, special tax offsets for seniors, and the notorious franking credits) have reduced the contributions from older households.

We now ask older Australians to pay a lot less income tax they we once did, the report says.

According to the report, an older household on $100,000 pays the same amount of tax as a working-age household on around $50,000.

Meanwhile, younger Australians are paying more to support older Australians in retirement and the figure is going to skyrocket as the Boomers retire - a young person in 1989 contributed about $2000 to support older Australians, while today a young person contributes about $3000.

That's not a huge difference, maybe, but consider this: when that young person is middle-aged, they can expect to be paying $12,000 (again, this is adjusted for inflation) - about four times more than a middle-age person in 1989.

This is partly due to demographic bad luck: "Baby Boomers won the demographic lottery: the sheer number of Boomers meant their average contribution to support older generations was relatively small. And while it is fair and appropriate to make sure Baby Boomers are assisted in the same way as they age, Generation Xers and particularly Millennials and Gen Z will need to shoulder a greater burden per person to do so."

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But it's also due to those darned old policy changes, namely more spending on health and higher pension payments.

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And while few would begrudge the government spending more on pensions, benefits for unemployed working-age Australians have stagnated: Newstart has barely moved in real terms in more than 20 years.

What was the turning point?

The report highlights two key moments: the late 90s, when the housing boom began, and the Global Financial Crisis of the late noughties.

Median equivalised disposable income for 15-24 year olds was rising steeply to the GFC, and since then has steadily tracked down.

Other age groups have stayed about even or gone sharply up, with the 55-74 year olds the greatest beneficiaries.

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The mining investment boom cushioned some of the impact of the GFC on wages, but since the collapse of the boom, wage growth has stagnated.

This could be a natural cycle, or it could be the 'new normal', the report says.

"If low wage growth is simply a hangover from the mining boom then we would expect wages to bounce back on their own, or with the support of monetary policy. But several years on, poor wage growth persists and interest rates can't go much lower.

"Slower wage growth particularly hurts young people.

"If low wage growth and fewer working hours is the 'new normal', then we could have a generation emerge from young adulthood with lower incomes than the one before it.

"This has already happened in the US and UK.

"The economic future of Millennials, Gen Z and subsequent generations will depend on the future course of productivity and income growth.

"Strong per-person economic growth almost inevitably leaves a generation better off than the one that came before it.

"But continued high levels of growth are not guaranteed. There are real fears that lower growth may be the 'new normal' for the rich world, including Australia."