Recently released IMF estimates show that Australians are the fifth richest people in the world, behind only those living in Luxembourg, Qatar, Norway and Switzerland (see http://tiny.cc/v6k0g ).
In the last couple of years, Australians have not only overtaken those living in the United Arab Emirates, Sweden, the Netherlands, Canada and the US, but have roared past as we become richer and richer and richer.
The per capita GDP data (in US dollar terms) shows just how powerfully strong the terms of trade boom has been in delivering what is probably a once in a century boost to incomes, wealth and living standards.
In US dollar terms, Australia’s per capita GDP is:
- 6% higher than Denmark;
- 10% higher than Sweden;
- 31% higher than Canada;
- 32% higher than Singapore;
- 39% higher than the US;
- 50% higher than Germany;
- 69% higher than the UK;
- 75% higher than New Zealand;
- 101% higher than Spain;
- 140% higher than Greece; and
- 1,192% higher than China.
Of course the best comparison of per capita GDP should be on a purchasing power parity (PPP) basis and not US dollar terms. This is because the PPP estimates take account of differences in the relative cost of living among other things. The next update from the IMF of GDP per capita on a PPP basis is due to be released in the next month or so, but even on that measure, it is likely that Australia will be comfortably in the top 7 or 8 higher per capita income earners in the world.
We are clearly very well off which makes it curious how dominant the "doing it tough" message "for working families" type rubbish is. Imagine how tough things would be if per capita GDP fell to levels prevailing in Germany? How's about a 50% haircut on Australia's output in US dollar terms? That might well justify some of the "doing it tough" messages going around at the moment. For now, we are rolling in wealth.
Of course, these figures do not take account of income and wealth distribution, and as always, there are about as many people below average are there are above.
That said, there is no doubt it is better to being an average Australian than it is to be an average Canadian, American, French or New Zealander, at least in financial terms.
That said, there is no doubt it is better to being an average Australian than it is to be an average Canadian, American, French or New Zealander, at least in financial terms.
I don't think GDP per capita is a great way of measuring wealth, but one thing we can be certain of is our comparative wealth, apparently the average Australian is 55 times richer than the average human being and has the highest mean wealth of any people at about $220,000 per person
ReplyDeleteI find these statistics fascinating, although I am rather skeptical.
ReplyDeleteHowever, there is one thing I did find clearly mistaken: "there are about as many people below average are there are above".
Not really. Median income is considerably lower than average income (which would somewhat relate to GDP/capita), because income distribution is not symmetrical around the average.
What's the difference between this and the Credit Suisse report that showed we were the richest or second richest by median/mean wealth (see link below)...
ReplyDeleteCredit Suisse - Australians are world's Wealthiest People!
Are they measuring wealth differently?
Anders, the difference between median wealth per capita versus total GDP per capita can be huge. Obviously one uses the median to get an idea of how the largest number of a country's population are faring. Australia still has a relatively flat distribution of income/wealth (though it got a lot worse in the Howard years) so it rates extremely well on this measure while the US is terrible because the top 10% owns 84% of the wealth and the top 20% a stunning 95% (and the stunning inverse, the bottom 40% own 0.3%; no typo, that is three thousandths! ie. the square root of stuff all).
DeleteThe American distribution can be seen in graphics here:
http://www.pbs.org/newshour/rundown/2011/08/wealth-how-does-the-us-slice-the-pie.html
I should have added that the Australian media (about $220k per adult) is four times the US median. So this is a graphic and clear outcome for those neolib economists (like Judith Sloan on tonight's QandA) who would like us to be more like the US.
DeleteOn the other hand a lot of our wealth is based on our property ownership (which is a lot higher than the US and many other countries) and our sky-high property prices. This means we should be cautious about our apparently dominant position on this measure--it could be more fragile than we think, especially with so many Australians with huge mortgages.