By Sarah Burden, Australian Bureau of Statistics, November 14, 2018The income gap between rich and poor Australians is at its widest since the Great Depression, but it is not as large as it used to be, according to new research by the Australian Bureau, which found that between 2007 and 2020, average household incomes fell by 4 per cent.

The gap between top and bottom earners widened by 7 per cent between the same periods.

It also showed the income of the super-rich increased by a staggering £20 billion a year between 2006 and 2020.

The ABC has teamed up with the Australian Institute of Health and Welfare to investigate how income inequality has affected Australians.

The data shows that between the years 2007 and 2019, the average super-wealthy household was earning an average of £846,000 a year.

While that was not a big jump from the previous year, it is the most since at least 1985, when the gap was around £1.4 billion.

“We see an erosion of middle class families in terms of incomes,” said Andrew Bolt, professor of economics at the Australian National University and a leading expert on income inequality.

In a statement, the ABS said it was concerned by the findings.

It said there was no single explanation for the widening income gap.

Instead, the report suggested it could be the result of a combination of rising inequality, poor planning, a shift to private renting and rising housing costs.

But it said the main culprit was rising housing prices, with a typical home worth around £250,000 having risen by almost 10 per cent over the last five years.

This has led to people becoming more dependent on government subsidies, which can also be used to reduce their real income.

Professor Bolt said there were two main factors contributing to the widening of the income gap, one being the financialisation of Australia, with the wealthy increasingly taking control of financial markets and the other was the increased concentration of wealth in the hands of the top 10 per of 1,000 Australians.

He said there is a real risk of another financial crisis in the years ahead.

A report from the US Federal Reserve this week said the median household income in Australia was $72,000, up from $59,000 in the previous financial year.

This meant the gap between the top 1 per cent and the bottom 90 per cent had grown to nearly $2,000.

Professor Bolt, who has also published a report on the rise in inequality in the US, said it seemed that this was an outlier compared with other developed countries, such as the UK and Canada.

He said Australia was far from being a free market, and there was a growing perception that we were not doing enough to tackle inequality.

“If we really wanted to change the economic system, the only way to do it is to reform the system,” he said.

“We can do it if we do something about the way wealth is distributed.”

Topics:economics-and-finance,government-and/or-politics,income-tax,wealth-loss,april-20,canberra-2600More stories from New South Wales

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