The average wealth held by Australians has fallen 9.9% in the last 12 months to just over $230,000, according to analysis by economists from CommSec.
It is the biggest annual fall since economists started tracking the data in June 1960, and means the average Australian’s wealth has now fallen $19,000 since the peak of $250,300 in September 2007.
“The latest figures give more precedence to phrases such as ‘the worst global economic downturn since the great depression’,” CommSec economist Savanth Sebastian says.
According to figures from Federal Treasury, Australia’s total private sector wealth stood at $4.96 trillion at the end of September 2008, down 2% over the quarter, although CommSec is quick to point out that the average Australian’s real wealth has almost doubled over the last decade thanks to Australia’s booming economy.
That will provide many Australians with a buffer as we approach recession, but Sebastian expects the wealth data is likely to put more pressure on consumer spending.
CommSec wants the Federal Government to take action.
“The continued signs of a rapidly deteriorating global economy highlight the need for the Australian Government to shore up defences on a domestic front.
“CommSec believes that the tax cuts scheduled for June this year should be brought forward to March [and also] believes that the Government should give serious thought to a more radical proposal of temporarily cutting the consumption tax.”
New figures released this morning also confirmed the shocking performance of super funds during 2008, with the averaged balanced fund losing 19.67% last year.
The one positive is that returns over a five, seven and 10 year period remain just above compound 5%.