A list published annually by the Australian Financial Review highlights Australia’s wealthiest individuals ranked in order of their net worth. The list itself has been in publication since 1984 and was known as the BRW Rich 200 until 2016. In 2017, the list was renamed as the Financial Rich List, by which it is still known today. The Rich List for 2023, which was published in May of this year, recorded the entry point for the list at a staggering six hundred and ninety million Australian dollars. When it was first published in 1984, the entry point had been A$10 million, which might seem like chump change compared to the A$690 million cut-off today.
Who are the two richest people in the country?
According to the list, the mining industry is still at the forefront of others in contributing to the riches of the wealthiest in Australia. The industry appears next to the names of 8 individuals among the richest 50 individuals in the country, whose combined wealth is over A$37 US$200 billion. Gina Rinehart, who is topping the list for the 4th consecutive year is one such mining tycoon. In a recent statement to news media, Gina Rinehart also reiterated her strong support of establishing nuclear power plants to fuel Australia’s development. This was a part of her ‘common sense’ recommendations to improve the Australian economy. All six of her recommendations demonstrate a keen awareness of the need to achieve environmental and climate protection goals. Interestingly, Rinehart had come under intense scrutiny by the public for attempting to convince schoolchildren that humans had had no role in global warming.
Valued at just a few billion dollars less than Rinehart, Andrew Forrest is the second wealthiest individual on the list. However, his shock split from his wife is expected to affect this rank considerably. The couple has also announced their intention of splitting their personal fortune built from the iron ore mine they had built, which would put Forrest in the 10th position on the Rich List and his wife Nicola Rich in the 8th. The continuous exit of top-level executives from Forrest’s mining company Fortescue had resulted in the devaluation of the mining empire – and can reasonably expected to have had an impact on his personal net worth as well.
Such changes in the Rich List are not uncommon, due to personal or external circumstances. There have even been instances where Australia’s wealthiest have protested being placed on the list at all, as in the case of Dick Smith, who is said to have divested A$20 million to avoid it.
The Rich List is not a complete reflection of Australia’s wealth
According to a report by global property consultancy Knight Frank, the amount of money required to be included in the top 1% in Australia has more than doubled since 2021. This puts Australia at the third highest among the countries covered in the report, after having been ranked 7th in 2021. The climb represents an increase from 2.8 million USD to 8.25 million USD in 2023. The increase is attributed to increasing property prices in Australia- which had increased the net worth of those holding the assets. According to a report by Credit Suisse, “the overall composition of assets or wealth has not changed a great deal in Australia since 2000”, which showed a preference for housing assets, even relative to other countries.
Although Australia is undergoing a period of steady growth, the economy is now registering lower levels of inflation, after reaching a record peak of 7.8% in December 2022. The inflation is primarily believed to have been due to the release of pent-up expenses post-pandemic, such as rising housing costs, higher transport costs, and postponed holidays. It is speculated that the decrease in inflation is due to the ease of these pent-up pressures. However, despite the surge in wealth in Australia’s richest described so far, almost a 70% jump among the top fifty, this is not reflective of Australia as a whole.
Billionaires skew data to hide wealth inequality in Australia
The most reliable way to measure how the wealth of a country is really distributed among its people is by comparing the median of individual income with the mean. Cottesloe, Perth, has the biggest difference between median and mean income in Australia. The mean income, which is the total income divided between the populace, equals A$369,687. The median income in the area on the other hand, which is the amount that divides a population into two groups that have an income above and below that amount, is A$76,983. The difference between the two figures is due to the fact that the few extremely high net-worth individuals skew the mean income in one direction. On the other hand, A$76,983 splits the population in the area neatly into two groups, the immensely privileged, and the ‘normal people’.
While the richest 10% of Cottesloe account for over 80% of the total wealth in the neighbourhood, their presence and property development projects also make housing extremely expensive for all residents in the area. However, it has to be noted that the inequality of wealth distribution is not as extreme in other areas of Australia. Another area in which income equality is particularly pronounced is in Victoria, in the Melbourne LGA (local government authority) of Boroondara. The mean income in the area is A$100,845, while the median is A$60,701. This clearly shows that the larger number of locals is causing the average income to decrease due to the fact that they make so little. In fact, there is a commonality in the LGAs with the highest income disparities: they are all mining towns.
According to the Australian Institute, ‘inequality in Australia has been on steroids over the last decade’. The top earners in the country account for 93% of the total wealth, while the bottom 90% only have access to 7%. The lack of resources experienced is attributed to an unfair tax system that benefits the wealthy, soaring corporate profits that are not redistributed, lack of career security, and wages that do not reflect inflation. This means that the larger number of people contributing to economic growth do not enjoy its benefits.
Rising inequality in wealth has the potential to ignite discontent and unrest on the social level. This in turn can lead to increased polarisation in society, fuelled by misdirected frustration at an unfair system. On a different level, it even has the potential to affect a person’s life expectancy and overall health. In addition to affecting their human rights, unequal access to resources effectively curtails society’s potential for self-actualisation.
(Theruni Liyanage)