If you found 2020 a tough year, you’re obviously not rich enough.
It’s been a good pandemic for Australia’s richest people, and The Weekend Australian (of all places) has now revealed just how good: the total wealth of the richest 250 Australians is up about 25%. That’s a jump from $377 billion to $470 billion.
Rich lists in Australia’s media (the AFR has one too) are a 1980s hangover designed to draw in luxury advertisers in a celebration of wealth and the cult of the entrepreneur. Born in a gaudier time, they’re now a sharp reminder of the policy slogan popularised by US Representative Alexandria Ocasio-Cortez: every billionaire is a policy failure.
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They’re the failures of tax and regulatory policy made manifest in deepening economic inequality.
Gina Rinehart ($36.28 billion) and Andrew Forrest ($29.61 billion) — the top two on Australia’s list — both more than doubled their wealth off the back of digging up Australian resources and shipping them to China. Rinehart’s four children also make the cut-off at numbers 32 to 35 with US$2.73 billion each, along with three of the heirs of her father’s business partner Peter Wright.
The boost in Disney shares has entrenched seven members of the Murdoch clan in the US-level billionaire class, between Rupert and his six children. In the family’s own paper, only two count as Australians: eldest son Lachlan (number 21 with $3.62 billion) who’s visiting the colony this week, and eldest daughter Prudence McLeod (number 49 at $2.33 billion).
The 250 are not the wealthiest 1%, they’re the richest 0.001%. The collective $470 billion they own is equivalent to about a quarter of Australia’s total GDP, up from about one-fifth a year ago.
The List identifies 122 billionaires in Australian dollars. About 87 are billionaires in US dollars. And the increased money is spread around that group, with more than 60 of the 87 US-level billionaires wealthier than they were a year ago.
It’s hard — just about impossible — to lose money when you’re that rich. Even after his horror year with Crown, James Packer sits at number 18 with $4 billion — a lazy $250 million down on the previous year.
Others in the list who’ve dropped the old $100 million or so over the past year will almost certainly bounce back as property and other assets are revalued after the recession.
This is the inequality formula of French economist Thomas Picketty in action: because the return on wealth is greater than the growth of the economy, the take of the rich grows, leaving less for everyone else.
Few on the rich list seem to have made their money out of actually making things (although a handful of Australia’s own tech unicorn billionaires make the cut). It seems very Australian to see that the largest group (60 of the 250) make their wealth out of property ownership and speculation.
There’s another 52 who make their money out of investment and financial services (a sector that itself covers a multitude of policy failures). Only 13 make their money out of manufacturing.
The List is discreet about where much of the money really came from: rich parents. Even rich-listers like James Packer and Lachlan Murdoch seem, on the basis of the write-up in The List, to have got a go by having a go.
But the names make it impossible to hide. No wonder Clive Palmer (number 8 with $9.76 billion) campaigned so actively against the wholly imaginary but conceptually threatening estate tax in the 2019 election.
The List also highlights the tax-deductible philanthropic generosity of the wealthy (US writer Anand Giridharadas calls this “the elite charade of changing the world”), but their wealth has grown so quickly that it’s not actually costing them money. All but the most generous are wealthier than they were a few years ago.
Here’s an idea: maybe Australia would be better off taxing wealth rather than relying on the kindness of the billionaire rich-listers.