Duty of care: Meeting the aged care workforce challenge
Read CEDA's report on Australia's aged care workforce challenge.
For all the media reports that Australians may not feel as well off as they used to be, including CEDA's Community pulse 2018 survey, our annual compendium of global household wealth paints a very different picture of our prosperity when we compare ourselves with other nations.
In 2018, Australia claimed the top place in terms of global median wealth per adult (US$191,453), edging out Switzerland, according to the Credit Suisse Research Institute’s 2018 Global Wealth Report. Australia’s average wealth per adult of US$411,060 is also the second highest in the world after Switzerland.
While the composition of household wealth in Australia is heavily skewed towards non-financial assets, particularly real estate, which averaged US$304,500 and forms 60 per cent of gross household assets, the definition of wealth also includes our superannuation pool (minus public pension liabilities) and other financial assets less debt.
Australia is also one of the countries with the most equitable distributions of wealth compared with other developed nations, such as the UK and the USA. Only six per cent of Australians have net worth under US$10,000, compared to 18 per cent in the UK and 28 per cent in the USA.
The conclusion we can draw is that we are fortunate to live in a country where median wealth per adult and average wealth per adult are the world’s first and second highest, proving that collectively as a nation we are not just very wealthy, but also that our wealth inequality is much lower than other developed countries. This indicates that the economic and policy fundamentals in Australia are very strong.
Australia’s high standing in the 2018 report can be attributed to a number of factors, including our superannuation system, an unprecedented quarter of a century and more of continuous economic growth, high real estate prices, a stable currency, population growth and plentiful natural resources. These elements have underpinned the continued growth of Australian household wealth and have been a consistent driver of economic success.
While there is a tendency to attribute this situation to our position as the Lucky Country, the reality is that it’s a combination of sound economic management, good public policy, a growing population (through a sensible immigration policy aimed at skilled workers), and a lot of hard work from entrepreneurs and businesses both small and large, striving for success.
per adult (USD)
per adult (USD)
Source: James Davies, Rodrigo Lluberas and Anthony Shorrocks, Credit Suisse Global Wealth Databook 2018
Our report’s findings are also echoed by the influential Economist magazine’s latest edition, which includes a front cover and a special report on Australia. The front cover denoting: Aussie Rules – What Australia can teach the World and a special report on The Wonder Down Under and how we are the envy of the OECD for our remarkable and consistent economic performance.
Importantly, our high standing in the wealth hierarchy does not seem to be any position we are in danger of relinquishing soon. The rate of wealth growth in Australia is not expected to stop, with the number of millionaires forecast to rise by 41 per cent over the next five years to include 1.8 million people, the third highest growth in the Asia-Pacific region, which by comparison will only grow by 34 per cent over the same period.
While we could and should do more to continue to drive down wealth inequality as a nation, our position as one of the world’s richest nations per capita is something from which we should draw immense pride.