Australia’s “ultra rich” population explodes, but the rest of us struggle

Asia’s huge appetite for resources has helped boost the number of ultra rich Australians – those with over $US30 million in assets and bank deposits (excluding the family home) – by 10% to 1224 people, according to a new report by Merrill Lynch and Capgem

Asia’s huge appetite for resources has helped boost the number of ultra rich Australians – those with over $US30 million in assets and bank deposits (excluding the family home) – by 10% to 1224 people, according to a new report by Merrill Lynch and Capgemini.

The report also found the number of people with more than $US1 million in investable assets increased 7.1% to 172,000 during 2007, well ahead of the global growth average.

The report also supports the idea that the Asia Pacific is the global economic growth region. The number of millionaires in India soared 22.7% in 2007, while China followed at 20.3%, in front of South Korea (18.9%), Indonesia (16.8%) and Singapore (15.3%).

While the rich get richer, the average Australian household went sharply backwards in 2008.

The Reserve Bank of Australia’s bi-annual Financial Stability Review shows that while household income is growing at broadly similar rates as the past few years, growing debt levels are eating into wealth.

The report shows household net worth as a percentage of household disposable income has fallen from 670% at the end of 2007 to 615% at the end of June – which means household wealth is now back at 2005 levels.

The RBA says that represents “a notable departure from households’ experience over the past decade, during which net worth grew by an average of around 10% per annum”.

In brighter news, the RBA’s review did find Australia’s financial system is holding up well under the strain of the problems on world markets.

“The Australian financial system has coped better with the recent turmoil than many other financial systems,” the RBA says.

“The banking system is soundly capitalised, it has only limited exposure to sub-prime related assets, and it continues to record strong profitability and has low levels of problem loans.”

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