In the ‘Sydney Morning Herald’ on October 21 a small (271 word) article entitled ‘Australians The World’s Wealthiest’ was tucked away, overwhelmed by the rest of the day’s sensationalist hoo ha. The report didn’t even rate a by-line, obviously not so momentous in terms of news worthiness. The article was about the Credit Suisse Global Wealth Report 2011 which measured the wealth of world’s 4.5 billion adults. It showed that, in terms of median wealth per adult, Australians were the wealthiest in the world.
‘The Australian’ newspaper apparently didn’t even think such news worthy of a mention – I couldn’t find anything about it in this publication thereby continuing the Oz’s philosophy of ‘only bad news is good news’. ‘The Daily Telegraph’ on October 22 in a lengthy 179 word article related to Australians expending more on restaurants and electricity bills gave it two sentences. WOW! Such a level of coverage by such august publications to a piece of substantially good news. One wonders how they would treat the coming of Christ! Headline: ‘End Of World Imminent – Government To Blame’.
The ABC’s, ‘Australia 2nd Best Place To Live: UN’, rated authorship (Bronwyn Herbert) and stretched to an almost healthy 331 words. The article explained that, according to the United Nations Human Development Index, we are second only to Norway as one of the best places to live. We can also snub our noses at the Netherlands (a poor third) and the other 184 ‘also ran’ countries.
The Credit Suisse Data generates some interesting graphics in terms of where Australia sits with regard to other countries, their people, and global wealth. And, ‘it ain’t half bad mum’!
We rank first (US$221,704) in terms of median wealth over the 27 countries listed in the report. The next closest being Italy (US$155,593), some 30% less than us. Who would think, given that their economy is a basket case based on profligacy The US ranks 18th at a mean US$52,752 per adult, some 76% less than us. So much for the world’s biggest economy Effectively half the population has less than the median value and half have more. In an Australia of 16.2 million adults that means that some 8.1 million adults have more than US$221,704 in wealth.
The mean and is below for comparison.
When it comes to GDP Australia is again up there with the best of them. Third (US$86,291) to Switzerland (US$95,958) and Norway (US$129,635). The US is sixth in the heap at (US$66,756), with a mean GDP some 23% lower than ours. Its interesting to note that our GDP is well in advance of a lot of countries that we would consider our peers (eg. Canada, Ireland, NZ, UK, USA).
That’s great as it goes and certainly a heart-warmer, but let’s look a little deeper. How is this wealth distributed and what do we owe?
Australia ranks sixth (US$175,200) in terms of financial wealth (eg. cash and equity holdings traded internationally). The US ranks second (US$208,988) but only exceeds Australia by US$33,788. And this is supposedly the world’s economic powerhouse?
So how about non-financial wealth (real estate, land etc)?
We rank second (US$323,672) to Norway (US$338,276) with the United States ranked at 16th with regard to non-financial wealth. So much of our wealth is held in tangible assets then. What a nice place to be in such times. And in terms of Gross Wealth per adult?
We are pretty crash hot at second place with a gross wealth of US$498,827 to Switzerland’s (US$671,355). So far, so good. We can be pretty chuffed about how we are doing compared to other countries, and we are consistently out-performing our peers.
In terms of the distribution of our wealth across the financial/non-financial divide we seem to be doing pretty well too.
Some 64.9% of our gross wealth is in non-financial assets leaving 35.1% in financial intangibles. Why do I say ‘intangible’? Think of what happens when the guts falls out of our dollar. Not exactly tangible wealth, eh?. Compare this with the US 32.1% non-financial and 67.9 financial, and the United Kingdom, 51.4% non-financial and 48.6% financial. In terms of the distribution I’m inclined to think that Australians would be fairly chuffed that a large proportion of their wealth is in non-financial assets given the current fractiousness of the financial sector. Compare that to the US where some 67.9% of their gross wealth is in financial assets. That US$ had better not decline in value! And when you think about it it’s only really being held up by the fact that there is not other currency (excluding gold) to run too in times of trouble.
And what about indebtedness?
Australia ranks 7th with an indebtedness per person of some 20.5% on our gross wealth. How does that figure in financial monetary terms?
That represents US$102,268 of personal debt per adult. Or, according to Credit Suisse, some US$102,126. But what’s US$142 between friends, eh? Just a bit of noise in the exchange rate. Australia ranks 4th in terms of the amount of debt per adult. That much personal debt, representing around 20% of our gross wealth, is a bit of a worry, especially if you are unable to repay it.
- Based on the information from Credit Suisse and the UN we should be pretty happy about ourselves and the fact that we are doing pretty well all round. So how come there’s no ‘banging of drums’ and ‘sounding of trumpets’ and general make merry in the populace when there’s such good news? Could it be because the newspapers are so engrossed in pushing bad news, bias and negativity that they can’t be bothered to give us the good news? Heaven’s above, that might lead Joe Public to think that things aren’t quite so bad after all!
- In terms of what we could consider as our peers (Canada, Ireland, NZ, UK and the US), those countries of predominantly Anglo origin, we are consistently ahead of the pack except in one instance where the US beats us with regard to financial wealth (US$209,988 to US$175,200). We still beat them in terms of gross wealth however. So why is it that? What’s special about Australian and Australians. Could it be that in God’s Own Country, we are happier and thereby more industrious? If so, then what are we complaining about?
- If GDP can be considered as a crude measure of productivity, then we are ahead of the pack and up with the best the world has to offer. So what’s all this complaining about falling productivity by the business sector and Phoney Tony Abbott’s “No!” party (aka the Coalition)? If productivity is Labour + Improved Technology + Business Acumen then maybe the last two factors of that particular equation need to be worked on. Mind you that doesn’t mean that labour (aka Unions) shouldn’t get their heads out of the sand and stop trying to maintain a 50’s status quo in a 21st century global economy. “Adapt or die” appears to be today’s catch-cry.
- If every adult Australian has an average debt of US$102.126 and wifey and I have a debt of about 5% of a combined US$204,232, and, there are a fairly large proportion of other who are in the same position, say 10%? Then there are a lot of adults around who are carrying substantial amounts of debt. Could it be that these are Australia’s ‘Unhappy Chappies’ focussed on by the media as the ‘downtrodden battlers’ struggling to meet their daily commitments? Could it be said that sitting in a debt mess of your own creation and ‘whingeing’ isn’t going to solve your problem? That’s YOUR problem, not everyone else’s And could it also be said that if the media focussed as much on the good as the bad then maybe people would feel a lot better than they do? So much for media balance, eh?
. . . . . . And that’s thought for food . . . . .