Ken Ticehurst (Dobell, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer outline recent data on Australian private sector wealth? How has the government contributed to these improvements?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Dobell for his question. Figures released today by the Treasury and published through the Australian Bureau of Statistics show that Australia’s nominal private sector wealth is at a record high in nominal terms and in terms of the percentage of GDP. In the June quarter of 2006, Australia’s private sector wealth stood at $7.1 trillion, around 745 per cent of GDP. This has increased by $5.1 trillion since March of 1996 and risen from 400 per cent of GDP in March of 1996 to 745 per cent of GDP today. In other words, not only has private sector wealth increased but also private sector wealth growth has outstripped the growth of the economy and instead of being four times the level of GDP, it is now over seven times.

Private sector wealth grew 18.7 per cent over the year to the June quarter. This was led by business capital, which grew 38.8 per cent, and private business investment, which grew 16.2 per cent. Australia’s households benefit from this because 41 per cent of Australians own shares, so Australians have a part in that growth of wealth. Dwelling capital has also contributed to the growth in wealth over the last year. Not only has this been an extraordinarily high rate of growth of private wealth but also it has been distributed to all deciles of Australian income households.

You will quite often hear some people say that the rich get richer and the poor get poorer. Over the last eight years in Australia, the rich have got richer and the poor have got richer. In fact, the ABS reports that there has been no significant increase in inequality from the mid-nineties to 2003-04. ABS data shows that between 1995-96 and 2003-04, the equivalised real incomes of low-income households increased 22 per cent. What we see is that there has been a huge run-up in wealth in Australia and there has been a very significant increase in incomes for the lowest income earners in Australia. What has done that? Mr Speaker, you would have to observe that the decline in unemployment to 4.8 per cent has given the low-income earners in our society a better chance for a job—that has been No. 1. No. 2, tax and family benefits changes have delivered very direct benefits back to low-income earners including real increases in pensions, which the government has put in place because we fix pensions to MTAWE rather than to CPI. In addition, this government’s tax changes have reduced taxes for lower income earners and increased the low-income tax offset. We have lived through a period of extraordinary growth in business, employment and private sector wealth, a growth which, when it is assessed, will probably compare favourably to any other period of Australian economic history and which has been distributed right across the income scale in Australia.