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by IANS |
Canberra, Aug 13 (IANS) Wealth inequality in Australia has grown to record levels, a new report published by independent think tank the Australia Institute has found.
According to the report, which was published on Tuesday, the wealth of Australia's richest 200 people as a share of the Gross Domestic Product (GDP) has almost tripled over the last 20 years, reports Xinhua news agency.
It found that the combined wealth of the members of the Australian Financial Review's annual list of the 200 richest Australians rose from 8.4 per cent of the country's GDP in 2004 to 23.7 per cent of GDP in 2024.
Ranked according to wealth, the top fifth of Australian households are 146 times better off than the bottom fifth, the report said.
"Australia is getting more unequal. Wealth inequality is growing rapidly," David Richardson, senior research fellow at the Australia Institute and co-author of the report, said in a media release.
"Growing economic inequality is making life worse for millions of Australians and holding our country back."
The International Monetary Fund (IMF) warns that excessive inequality can erode social cohesion, lead to political polarisation and lower economic growth.
The report calls for a more comprehensive capital gains tax (an annual wealth tax) and the introduction of a wealth transfer tax on inheritance to address the growing wealth inequality in Australia.
It identified capital gains - which refers to the increase in the value of an asset - as the main driver of rising wealth inequality in Australia. The report found that capital gains exceeded all other types of income combined in 2020-21.
The federal government in 1999 halved the rate of capital gains tax for individuals selling assets they held for at least one year.The Australia Institute report estimated that the failure to fully tax realized capital gains cost the government 19 billion Australian dollars (US $12.5 billion) in revenue in the financial year 2023-24 alone.
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