Middle-aged working households hold wealth
Wealth in Australia is mainly held by middle-aged working people who are saving for their retirement, according to a new major survey on wealth and income distribution.
The Minister for Family and Community Services, Senator Kay Patterson, today released the findings from the Household, Income and Labour Dynamics in Australia (HILDA) survey, which indicates that claims about the inequality of income and wealth distribution can be misleading.
“The research shows that wealthy households in the study are in fact middle-aged working households who have been saving for many years, including building up superannuation and other assets they can draw on in their retirement,” she said.
“The median wealth of a household headed by someone in their 50s is around $400,000, which is 10 times that of a household headed by someone in their 20s.
“This is not evidence of an unequal society – of the haves and the have-nots. It is a reflection of lifecycle patterns in savings and consumption.”
Senator Patterson said the HILDA survey also showed that Australia had a high degree of income mobility with 60% of people on the lowest income moving up the income scale in 2002.
“The survey shows that people’s income and their wealth change with time. Only 40 per cent of those households, which were in the bottom 10 per cent of the income distribution in 2001, were there in 2002,” she said.
“This was also seen at the top end of the income distribution where only half of those households in the top 10 per cent in 2001 were still there in 2002.
“Many reasons may lie behind these changes including changing employment, changing family structures and the way in which families report income.”
Senator Patterson said the survey showed that Australia provided people with the opportunity to work hard and reap the rewards of their own achievements.
“The survey highlights the importance of policies which create jobs and opportunities rather than punitive taxation and redistribution,” she said.
The HILDA survey, which commenced in 2001, is Australia’s first nationally representative household survey that gives an insight over time into people’s housing arrangements, income, wealth, workforce involvement, family relationships, health status and attitudes to work.
“By the end of the study we will have a better understanding of how people’s lives change and what factors impact on those changes,” Senator Patterson said.