Baby boomers have been struggling for decades to make ends meet, but a new report has revealed that despite a growing economy and more disposable income, there is still a lot of inequality in the economy.
The report released today by the Institute of Public Affairs, or IPA, finds that while there has been a lot more social mobility in the workforce, the richest 20 per cent have seen their incomes increase by an average of 3.6 per cent over the past 15 years.
The report, entitled Baby Boomers Are Still Tough on the Budget, also found that the richest Australians now pay more in taxes than they do in social services.
The Institute’s research shows that the top 20 per in the income distribution pay an average tax rate of 29.6 percent, the second highest among all countries.
While the report found that inequality in income has fallen in Australia, the Institute’s director of research, John Van Reenen, said the findings showed that it was still not a good time to be a baby boomer.
“Baby boom and the baby boomers we know are still really struggling, and that’s despite the fact that they’re getting older and the benefits of that, from increased health and wellbeing to a lot less need for work, they’re still struggling,” he said.
He said that while the report showed that the boomers had enjoyed more social and financial stability, it also revealed a big gap between the average and the top.
Mr Van Reenten said the report highlighted that inequality had fallen for all generations.
‘It’s the richest generation that’s really going through the toughest times’ The baby boom was a period of economic growth, which began around the mid-1960s and continued until about 1990.
By 2010, Australia had surpassed the United States and Canada as the world’s biggest economy.
But Mr Van Reeden said inequality had risen in the past decade, especially for the top one per cent.
In the period that he looked at, the top 1 per cent had increased their income by an extra $11.4 billion.
That figure was higher than that of the top 0.1 per cent of Australians, who have also seen their pay rise by $2.4billion.
At the same time, the bottom 60 per cent were making less than they did 20 years ago, while the bottom 20 per of the income scale have seen an average annual pay drop by more than $1,000.
And while the top five per cent saw their income grow by about $4.2billion over the decade, the gap between them and the rest of the economy widened to $5.2 billion, the report says.
When it comes to household income, Mr Van Reinen said while there was a lot that was still to be done to tackle inequality, there was also a lot to be optimistic about.
This year the top 10 per cent in the country had grown by $1.2bn, while that of people earning below $20,000 had grown an additional $2billion.
Inequality has also been on the rise for the lowest income households.