The wealth of Australia's richest 200 people nearly tripled as a share of GDP over the last two decades, as inequality grew to new record levels in the country, the Australia Institute has shown.
Key Points:
- Inequalities of incomes and wealth in Australia have grown in recent decades and the tax system is making the situation worse.
- The wealth of those on the Rich 200 list rose from the equivalent of 8.4% of the nation's GDP in 2004 to 23.7% of GDP in 2024.
- In 2020-21, capital gains exceeded all other types of income combined.
- The estimated revenue forgone through the failure to fully tax realised capital gains in 2023-24 is estimated to be $19 billion.
- Three types of tax reform could restrain the growth of wealth inequality in Australia:
- more comprehensive taxation of capital gains,
- the introduction of an annual tax on wealth above a specified threshold, and
- the introduction of a wealth transfer tax.
- Any one of these would make a big difference; all three would be transformational.
"Australia is getting more unequal. Wealth inequality is growing rapidly, and the tax system is making it worse. Australia needs new ideas and new policies to fix it," said David Richardson, Senior Research Fellow at the Australia Institute.
"Growing economic inequality is making life worse for millions of Australians and holding our country back. The International Monetary Fund and others have shown how economic inequality tends to reduce a nation's economic growth.
"It's harder to realise our collective potential and grow the economic pie when millions of Australians are being forced to fight for crumbs that fall from the tables of the wealthy.
"Failing to appropriately tax wealth and capital gains has neither an ethical nor an economic justification. Bold policy actions are required to counter our ever-increasing inequality and raise the billions of dollars in public revenue that are currently being foregone."
