Research Reveals Inequality Within Generations
New research by the e61 Institute reveals that the intergenerational divide in Australia is more complex than previously thought. Younger Australians face fiscal pressures and potential inequality due to a looming inheritance boom.
The report finds that despite concerns over rising living costs and housing prices, young Australians are unlikely to end up worse off than their parents. However, Australia’s fiscal system burdens them early in their careers, affecting their financial stability.
The e61 Institute highlights that income growth has slowed partly due to extended education periods. Younger Australians are set to accumulate wealth similarly to previous generations and are expected to receive significant inheritances. This could increase inequality within their generation.
In 2023, the average inflation-adjusted income for a 35-year-old was approximately $90,000, nearly 80% higher than that of their counterparts in the late 1980s. The median household wealth for a 35-year-old was about $380,000, comparable to earlier generations.
“Intergenerational equity is one of the key themes of this year’s federal Budget,” stated e61 Principal Economist Jack Buckley. He emphasised that the narrative of generational winners and losers is overly simplistic.
The report stresses that the fiscal system frontloads costs onto younger Australians during critical financial periods. The repayment of large HELP debts and compulsory super contributions significantly impact their ability to save.
According to Buckley, the impending inheritance boom is likely to exacerbate inequality within the younger generation. Wealth accumulated by older Australians from rising asset prices will be passed down unevenly, creating disparities.
Fiscal Pressures and Policy Suggestions
The report criticises the current fiscal system for frontloading costs through large HELP debts and compulsory super contributions. This affects young Australians’ ability to save for homes and families. It also points out the uneven distribution of wealth from inheritances within the generation.
Potential policy solutions such as inheritance tax face political and administrative challenges. Instead, an increase in GST is proposed as a practical option to address wealth disparities while providing support through tax relief and benefits for low-income households.
“An increase in the GST would capture this windfall as it is spent down, without requiring complex new wealth assessment infrastructure,” added Buckley.
The research underscores the need for a pro-growth agenda to support younger Australians amidst slower productivity growth than in previous decades.
Educational attainment has significantly increased, with tertiary education rates more than doubling compared to their parents’ generation. This investment in education is expected to yield stronger earnings growth later in life.
Last updated: 29 June 2026, 12:18 pm
