Wealth inequality over the past 20 years has progressively become worse in Australia. The most common measure of the level of inequality (the Gini-coefficient) has increased since 2004, indicating that Australia’s wealth is now more unequally distributed than in the past. This paper examines the growth of Australian household wealth from 2002 to 2022 by asset and explores the contributing factors to growing wealth inequality. 

The average household’s wealth is dominated by three types of assets: the family home, superannuation and 'other property', which includes any residential property owned by the household, excluding the family home (most usually investment properties but also holiday homes).

Key findings

• Wealth inequality is being driven by the expansion of 'other property'. The majority (53%) of the increase in 'other property' over the 20 years has flowed to the wealthiest 10% of households, with just 7% going to the poorest half of households.
• The average Australian household’s biggest asset is the family home, which has historically reduced wealth inequality because of high home ownership rates. But over the past 20 years home ownership rates have been falling.
• Superannuation is, on average, the second largest asset held by households. Its growth over 20 years has been less equally distributed than the family home, but more equal than 'other property'.
• Large tax concessions are making the problem of wealth inequality worse by reducing the taxation of wealth and delivering benefits to the already very wealthy.
• The housing affordability crisis is also a wealth inequality crisis. Action to make housing less expensive will also reduce the increase in wealth inequality.
• Reducing the tax concessions on capital gains and negative gearing will reduce demand of investment properties by making them a less tax effective investment. This will make housing more affordable, increasing home ownership rates and distributing wealth more evenly. It will also rebalance the tax system by taxing wealth at higher rates.