Quantify Strategic Insights head of data and insights Angie Zigomanis said the richest 10 per cent were also more likely to have wealth built up in other assets.
“For plebs like me, you and the general public, most will be salary earners, and you can only make so much as a salary earner. The real wealth is where people make more and above that, whether they operate their own business or are in a situation where they make commissions or bonuses or something like that,” he said.
Australians with more than $3 million in wealth only have about a third of that wealth made up by their family home. Credit: Dion Georgopoulos
“To make the real bucks you have to make your own business and a lot of your wealth will be tied up in that business … If you have more wealth, a good financial adviser will tell you to diversify as well.”
Oliver agreed: “If you’re in the know, you might think, ‘I’ve got an exposure to property in the family home.’ So you might go to shares,” he said. “You could have a private wealth adviser who puts you into shares, or you could buy into a small business. As you get wealthier, your ability to diversify goes up.”
The top 10 per cent had the highest proportion of wealth made up of business interests (7.35 per cent) and the third-highest proportion of wealth was made up of financial assets, such as shares or savings in a bank account (18.53 per cent).
The Australia Institute chief economist Greg Jericho pointed out the top 10 per cent also had the largest portion of their wealth in equity in properties other than the family home, at 18.74 per cent. He said the concentration of property wealth in the hands of the richest Australians was a result of policies like capital gains tax discounts and negative gearing.
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“I have no problems with homeownership and people having homeownership as a source of wealth, but we have policies geared toward investment,” he said. “That’s the issue. You get a capital gains tax discount when you do other investments, but when I buy BHP shares it doesn’t take away the ability of someone else to buy BHP shares.”
Oliver said the widening gap between what Australians can afford to pay for property and what homes cost would lock people without generational wealth out of the housing market, and would deny them the ability to build wealth through their homes.
“Having a house is a stepping stone to building wealth. If it is now harder to get into the property market, which it is, it obviously makes it harder for younger generations to generate wealth, which is a problem,” he said. “You end up with what the US sees with social polarisation … it runs the risk of political instability. To remain a successful sustainable democracy, you need to put a limit on wealth inequality.”