The gap between those with the most and those with the least has blown out over the past two decades in Australia, with the average wealth of the highest 20% growing at four times the rate of the lowest, this research by ACOSS and UNSW Sydney shows.

This report shows that wealth inequality has increased strongly over the past two decades. From 2003 to 2022, the average wealth of the highest 20% rose by 82% and that of the highest 5% rose by 86%, leaving behind the middle 20% (with a 61% increase) and the lowest 20% (with a 20% increase).

The overall increase in wealth inequality over the period was mainly driven by superannuation, which grew by 155% in value due to compulsory savings property investment.

Contrary to the public image of ‘mum and dad’ property investors, investment housing is very unequally shared: the wealthiest 20% hold 82% of all investment property by value.

The report also shows that the government’s timely pandemic response reduced income inequality, but only temporarily.

• In 2020-21, the average income of the lowest 20% income group grew by 5.3% compared with 2% for the middle 20% and 2.4% for the highest 20%, predominantly due to the introduction of COVID income supports.
• However, during 2021-22, the removal of these income supports largely reversed those trends, restoring income inequality close to its pre-COVID level.
• Incomes fell generally, but more so for those with the least. The average income of the lowest 20% fell by 3.5% compared with 0.5% for the middle 20% and 0.1% for the highest 20%.