Generational Wealth Gap Widens in Australia
Younger Australians Struggle to Build Wealth
Australia’s generational wealth gap continues to widen, making it harder for younger citizens to build assets. Meanwhile, older Australians benefit from favorable housing and tax policies. Independent economist Saul Eslake warns that the divide is deepening due to structural flaws in the housing market.
Real Estate Drives Inequality
Former Treasury officials have voiced concern. Ken Henry said young workers are being “robbed” by current tax structures, while Tim Pallas called the gap a “national tragedy.” Eslake points to real estate as the core issue, noting it accounts for nearly two-thirds of household assets.
Data Highlights the Divide
According to the Australian Bureau of Statistics:
- Households aged 65+ increased their wealth share by 10.8% between 2003/04 and 2019/20.
- Younger groups (15–34 and 35–44) saw declines of 1.7% and 5.9%, respectively.
- Home ownership among 25–34-year-olds dropped below 45% in 2021, levels not seen since 1947.
- Older Australians maintained ownership rates between 75% and 85%.
Reform Faces Political Resistance
Eslake argues that political incentives have stalled reform. Policies meant to help first-home buyers often benefit existing homeowners instead. He suggests several solutions:
- Replace stamp duty with broad-based land taxes
- Adjust superannuation concessions
- Reform planning and zoning rules
- Reintroduce inheritance taxes (common in other OECD countries)
Urgent Need for Structural Change
Treasurer Jim Chalmers has affirmed the government’s commitment to intergenerational fairness. However, Eslake stresses that meaningful change requires political courage and long-term reform. Without action, the generational wealth gap will continue to grow, leaving younger Australians increasingly disadvantaged.
A Call for Fairer Opportunities
The widening gap underscores the need for housing and tax reform. Australia must create fairer pathways for younger generations to access property and build financial security.
