Normal text size Larger text size Very large text size More than two-thirds of the $2.3 trillion in household wealth generated in Australia in the first half of this decade went to those aged 55 or older. The net worth of an average Australian household almost doubled from $468,000 in 2003-04 to $929,400 in 2015-16, analysis of the ABS’s Household Income and Wealth report shows. Net worth is the value of all your assets, including superannuation, minus your debts. But the spoils have not been spread evenly among generations. Older generations have always had more wealth than younger, as they have had a lifetime to accrue it, but the gap is growing. In 2003-04, people aged 55 and over owned 48 per cent of Australian household wealth, a figure that has jumped to 56 per cent. Part of that is down to the ageing population increasing the number of older households, but the individual wealth of older households has still increased significantly faster than younger counterparts.


In 2003, for every $100 held by a household led by a 70-year-old, a 30-year-old’s household had $33. By 2016 that was down to $24. The house wins This decade has been particularly kind to retirees thus far. Those aged 65-plus enjoyed almost half the total gains in wealth from FY10 to FY16, compared to a quarter from FY04-10. The later period coincided with the end of the global financial crisis and a large housing boom in Australia’s major cities. While property made up the largest component of older Australians’ gains to 2016, which may have fallen now the market has turned, they also saw significant gains in financial assets and superannuation.


In a 2014 report titled The Wealth of Generations, the Grattan Institute found that declining rates of home ownership among younger Australians were driving the growth in inequality. It said the tipping point was the unprecedented growth in house prices relative to wages since the mid-1990s. And while prices have since come off the boil in the past year, it’s still a minor blip compared to the overall trend. "The rise in housing prices generated windfall gains for those who owned property before 1995," the report says. "These could be considered unearned gains – the result of policy and economic factors rather than productive activities or as compensation for taking an investment risk."


While some retirees likely bristle at the idea of "unearned gains", Roger Wilkins, a professorial research fellow at the University of Melbourne, said such people were showing "wilful ignorance" when it came to acknowledging their run of luck. "It’s a human trait. If you have success in life you tend to put that down to your hard work but not consider the role that luck played in that. As in, plenty of other people worked hard but didn’t enjoy the same luck. "Perhaps what some older Australians don’t sufficiently acknowledge is that plenty of young people work hard but aren’t making they same economic progress as the Baby Boomers did." But National Seniors Australia Interim CEO, Professor John McCallum said the framing of the debate as one of old versus young was "a bit muddled". "People feel like whatever bad happens to young people happens because of older Australians. It’s not that simple," Prof McCallum said. "Life stages are different now. People are having children later, living longer, giving their inheritances to children in Sydney and Melbourne to help them buy a house. "Society has changed, basically."


Prof McCallum said having researched aged care issues for several decades, he could remember similar arguments about how Baby Boomers’ parents had it so much better. "This sort of argument is perennial. It hasn’t just come about." He acknowledged that house price booms had advantaged older people and left substantial policy challenges. "But what we must resist is that casting of things as young against old which is unreal. "There is a third dimension, which is that this is an inequality, class division, not just a young versus old debate." Professor Wilkins helps run the longitudinal Household, Income and Labour Dynamics in Australia survey, which has also studied the growth in generational inequality.

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