For many, inheritances are a symbol of an ever-widening wealth gap that sees the rich get richer and the poor get poorer, but new research shows they may actually reduce inequality.
The amount of wealth transferred through inheritances and gifts to Australia has more than doubled since 2002, with a change of hands of $ 1.5 trillion, according to the federal government’s Productivity Commission.
Its report, the first comprehensive look at wealth transfers in Australia, predicts they could quadruple by 2050, as household wealth increases and the population ages.
But Productivity Commissioner Catherine de Fontenay said inheritances reduce some measures of relative wealth inequality across the country.
“The wealthiest people receive more heirlooms and gifts on a dollar-for-dollar basis, but less as a percentage of their existing wealth,” she said.
âCompared to the amount of wealth they already have, those with less wealth receive on average a much larger boost from inheritances, about 50 times more for the poorest 20 percent than for the 20 percent. richest hundred. “
This tends to reduce the share of wealth held by the richest Australians, a trend that is expected to continue.
“This may surprise some, but it was found in all the other countries studied,” said Ms. de Fontenay.
Children tend to enjoy a situation of relative wealth similar to that of their parents, according to the report, but only about a third of the persistence of intergenerational wealth is due to inherited wealth.
“The rest comes from all the other things parents give their children – education, networks, values ââand other opportunities,” said Productivity Commissioner Lisa Gropp.
Growth in asset prices – especially for housing – has a much larger impact on wealth inequality, according to the report.
Associated Australian Press