Despite the economic impacts of the pandemic in the 2020 - a "short sharp recession", on dip in house prices, and the share market bear market during the first half of the year, the growth in household wealth has actually boomed during past past decade. This has been largely due to a booming housing market and strong share market growth, as wage growth as been negligible.
Australian net household wealth (dwelling and financial assets minus liabilities) has increased from around 550% of annual household disposable income, to now be 825% of annual household disposable income. This increased level of household wealth should result in strong economic growth in coming years due to the psychological 'wealth effect' (people are more willing to spend a greater portion of their disposable income as their perceived wealth increases). This may also be boosted by a real increase in wages in Australia, due to the impact of the pandemic on our usual level of immigration flowing on to produce some labour shortages and hence competition for staff.
Of course this rise in wealth has not been uniform across all socio-economic segments - those who rent do benefit from rising house prices, and the bottom quartile of the population (with negative or low net worth) do not benefit from the rise in value of financial assets. Some of the increased household wealth nationwide will be redistributed via the progressive income tax scale (incomes over $180,000 have a marginal income tax rate of 47% plus 2% medicare levy, while low incomes (below$23,227) effectively have no income tax liability due to the LITO and LMITO tax offsets) but growth in average household incomes generally results in some increase wealth inequality. On the other hand, everyone benefits from stronger economic growth, as it reduces unemployment and supports real increases in minimum wage and provides governments with the budget capability to provide real increases in welfare support.
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