Australia is witnessing a stark divergence in socio-economic fortunes.

Last year, 45,000 individuals in Australia ascended to the coveted ranks of the “established affluent”. 

This upward mobility is attributed to robust market returns and surging property valuations. Investment Trends, a prominent research consultancy, defines those with over $1 million in assets (excluding the family home and superannuation) as “high net worth”. 

Within this category, individuals possessing $2.5 million to $10 million are classified as the “established affluent”. 

According to the 2023 Investment Trends/Praemium High Net Worth Investor Report, the number of affluent investors nationwide has surged to 635,000, collectively holding $3 trillion in investable assets. 

This substantial influx of 45,000 individuals into the “established affluent” category has drawn attention.

The surge in this category's growth is attributed to heavy investments in equities and property, which delivered strong performances in the preceding year.

However, the outlook for the coming year is decidedly less optimistic.
A report based on a survey of 6,000 investors reveals that many affluent investors are apprehensive about rising inflation, the potential return of Donald Trump to the White House, and uncertainties surrounding the Chinese economy.

The report notes a significant shift in investor preferences toward generating a sustainable income stream, with 38 per cent of high net worth investors now prioritising this over capital growth, up from 33 per cent in previous years. 

Even the ultra-high net worth individuals, of which 90 per cent have self-managed superannuation funds, have shifted their focus to income generation, signalling a profound change in investment strategies.

The impending tax increase on superannuation assets above $3 million from 15 per cent to 30 per cent, slated for 2025, is causing concern among respondents, reflecting heightened apprehension about “regulatory change”.

In stark contrast to the upward mobility of the affluent, low-income households in Australia are grappling with a hidden burden known as the “poverty premium”. 

Anglicare Australia's new report, titled ‘Poverty Premium: The high cost of poverty in Australia’, identifies six critical areas where low-income households are penalised for their financial constraints: food and groceries, transport, energy, credit and finance, data and communications, and home and car insurance.

This “poverty premium” manifests as higher living costs for low-income families, who often lack the ability to make bulk purchases, pay annual expenses, or upgrade to fuel-efficient vehicles. 

Examples cited in the report include low-income households spending 93 per cent more on groceries, 20 per cent more on energy, 23 per cent more on public transport, and 142 per cent more on phone data.

To address the “poverty premium” and alleviate the financial hardships faced by low-income individuals, Anglicare's executive director, Kasy Chambers, advocates for raising Centrelink payments above the poverty line. 

The report also calls for the minimum wage to become a living wage, expanded solar and energy efficiency programs for public and community housing, and more telecommunications options tailored to low-income customers.