Recent survey data shows that there are significant inequalities in key wealth indicators such as savings, equity investments, home equity and pensions in Australia. This imbalance in the distribution of finances is not only reflected between genders, but also reveals deeper social structural problems. As the global economy faces challenges, Australia's wealth gap is becoming more prominent.
According to a report by the Daily Mail on September 20, 2023, there are significant inequalities in the wealth of ordinary Australians in terms of savings, stocks, home equity and superannuation. A survey conducted by Finder in July showed that the average Australian had cash savings of $36,298.
When this data is broken down by gender, the disparities are clear. The average Australian man has a whopping $50,479 in cash savings, while women save less than half as much as men, at $22,091.
Not only that, but men also save far more than women each month, with men saving an average of $809 per month compared to $578 for women.
A similar situation exists when it comes to stock holdings and pension assets. Australian men invest almost twice as much in stocks as women, with $72,980 for men and $38,123 for women.
The average Australian has a personal superannuation fund balance of $176,221, with the average for men being $240,613 and women only $113,359.
Sarah Megginson, a personal finance expert at Finder, was "shocked" by the result. She noted that men save more than twice as much on average than women, a clear indication of deeper systemic inequalities. "It's not just a matter of men being better at saving, it's more about the financial and social barriers that women are more likely to face in their lifetimes."
However, the results are not all bad news. There is a greater gender balance in terms of the value of home ownership. The average home equity is $486,940 for men and $484,979 for women.
A previous Finder study, the Equal Pay Day Report, found that 23% of Australians, or about 4.8 million people, were not concerned about the gender pay gap. The report also shows that 23% of women say childbearing has a negative impact on their earning capacity, compared to only 6% of men.
Megginson advises Australian women to "really get involved" to make a difference to their finances, stressing that "a few small but simple habits that are formed now can make a huge difference." ”
Earlier this year, another survey by the Financial Products Comparison Agency found that almost one in two Australians had less than $1,000 in the bank. The survey, which was conducted between January and March with a sample of 3,214 Australians, showed that 45 per cent of consumers had less than $1,000 in savings. Even more worrying is the fact that one in five Australians, or 4.2 million people, have zero bank balances.
In terms of the economic outlook, Australia is also in a new uncertainty zone.
United States stocks were volatile after the Fed announced a rate cut, with the Dow Jones closing down 103 points or 0.25% at 41,503. The move sparked mixed reactions in the market as concerns about United States economic growth grew.
Kyle Rodda, senior financial markets analyst at Capital, warned that the slowdown in the United States economy will affect Australia. "This could mean that the Fed sees risks to United States growth, and if those risks materialize, the United States economy slows and weakens the global economy, then the Australian economy will suffer," he explained. ”
He also noted that "this could mean that the Reserve Bank of Australia will also follow the Fed in cutting interest rates, but the current data does not support this as our inflation rate is relatively slightly higher." ”
The ASX 200 was up at the open, jumping 25 pips within minutes of opening. "The market may now be lifting expectations of equivalent easing, which is taking a hit to asset valuations and pushing the dollar higher," Rodda said. ”
"In the short term, this may not have anything to do with the real economy, but more with valuation," he said. This could be a negative signal to the United States economy, or it could be that the Fed is not aggressive enough because the market has set the bar too high for the Fed to surpass. ”
The Reserve Bank of Australia's board of directors will meet next week and Australia's cash rate is currently at 4.35%, up sharply from 0.1% in May 2022. Rodda said the Fed's rate cut would not affect next week's meeting, warning that the United States and Australia were "dealing with different issues" and that there were "unique" factors in Australia's inflation.
"This could force the Reserve Bank of Australia (RBA) to come closer to cutting interest rates, number one, because it suggests a slowdown in economic growth, which will eventually affect Australia, and the RBA will have to react to the weakness of the economy, so that will be an indirect impact. But in Australia, where things get complicated is that if you listen to the RBA's comments over the past few weeks, you'll see that they're not worried about current demand. ”
"What they're worried about is the supply side of the economy, which is a stand-alone thing or it doesn't have much to do with economic growth, it's more about productivity and the ability of the economy to keep up with the weak demand that we're seeing right now. That's why inflation is high. The inflationary pressures they see are coming from supply-side headwinds. ”
Treasury Minister Jim Chalmers said on Thursday morning's "Today" episode that the global economy is now in a "very uncertain position."
"In the United States, their job market is softening, and there are some problems, and there are concerns about a slowdown in the United States. In addition, we are also seeing a slowdown in China's economy, and I will be traveling there next weekend. The global economy is in a very uncertain position, and this is one of the reasons why we are seeing rate cuts in countries like the United States. ”
It is reported that the Commonwealth Bank expects the RBA to start cutting interest rates later this year, but Rodda said that the market expects the rate cut to come in 2025.