Policy for One: The New Class Divide in Australia

In the wake of recent data showing that the top 10% of Australian households now control 44% of the nation's wealth, Hugh Kermond's timely analysis explores how Australia's growing wealth inequality is reshaping both its democracy and generational prospects. As housing affordability reaches crisis levels - with Sydney's median house price at $1.4 million and not a single rental property affordable for single parents on support payments- this piece examines how the traditional narrative of generational divide masks a deeper class struggle. Hugh's analysis is particularly relevant given Labor's recent attempts to address housing accessibility and the ongoing national debate about economic mobility. Through comprehensive data and sharp analysis, he demonstrates how policy choices have created two distinct economic realities for Australians, challenging the nation's self-image as a land of opportunity.

Now that the dust has settled on the federal election, one thing remains clear: younger Australians are still living in an economic reality vastly different from the one that shaped the policies they’re expected to vote on.

With Millennials and Gen Z now the largest voting bloc, parties like the LNP that failed to appeal to a younger audience have ultimately been punished at the ballot box. While some pundits predicted a generational drift away from the major parties, this election showed a more complicated picture. Millennials largely voted Labor, while Gen Z leaned toward minor parties like the Greens. Despite differences in party preference, there’s still a growing sense that politics has little to offer those without access to intergenerational wealth.

Labor’s success came with the promise of being the “Party of Aspiration”, and it was backed strongly by young voters. However, it now faces a key challenge: younger Australians are navigating an economy that no longer delivers the same opportunities their parents once had. In short, they are living in a different economic reality. Rising rents, insecure work, climate crisis, student debt and increasing rates of gender-based violence continue to sit on the periphery of national policy discussions. Instead, too many policies are still designed not to upset the comfort of the two car household with a growing property portfolio.

While often framed as a generational divide, what we’re really seeing is a deepening class divide across generational lines. It’s not your age that determines your future anymore. It’s whether you or your parents own property. In that sense, we’re inching closer to creating a 21 st century landed gentry.

A Tale of Two Economies

Australia once prided itself on being a land of upward social and economic mobility. Yet over the past two decades, wealth inequality has widened dramatically. The top 10% of households now hold 44% of the nation’s wealth, while those without intergenerational wealth are increasingly locked out of the country’s prosperity. Nearly half of all wealth gains from 2003 to 2023 flowed to the top 10%. This doesn’t just widen inequality- it reshapes democracy.

Housing is the clearest example of this shift. In the 1980s, more than 60% of 25-34 year olds owned a home. Today that figure has dropped to 36%. Meanwhile, Sydney’s median house sits around $1.4 million, and rents have also jumped 7.6% in the past year alone. What was once a rite of passage has become a luxury.

Policies like negative gearing and the capital gains discount funnel wealth upward, rewarding property speculation over accessibility. These tax arrangements inflate housing prices and allow those who already own assets to accumulate more wealth at the expense of renters and first home buyers. In effect, wealth begets more wealth. These policies remain politically untouchable, embedded in a culture that normalises the financialisaton of everyday life. In Australia, landlords have been rebranded with the “Everyman” image which helps to paint them as just regular ‘mum and dad investors’, providing housing. This political valorisation allows what are really profit extracting practices seem harmless and familiar. In reality, these practices entrench inequality and protect existing economic advantage.

So if young voters now form the majority, why aren’t their interests being championed? Why isn’t policy shifting? One answer is that the parties crafting housing policy are themselves deeply invested financially and ideologically in the current system. They don’t reflect the economic reality of young Australians, renters or the growing cohort of lower- and middle income earners shut out of the housing market.

Work Hard, Stay Broke

Wage stagnation has become a defining feature of the past decade. Between 2012 and 2022, labour productivity consistently outpaced the growth in real wages. This indicates gains of economic growth have been siphoned upward. From 2022-2024 we have seen a different pattern emerge. An increase in the hours worked across Australia but a decrease in productivity. This paints a picture in which we are working more hours on work that adds little value, just to afford the basics because our wages are not keeping up.

Young Australians entering the workforce are significantly more likely than previous generations to be find themselves in causal, part time, or contract roles. In industries like retail, hospitality, care and education, insecure employment is now the norm. As of 2024, 2.7 million Australians are casually employed and nearly two thirds of workers under 25 fall into this category. These jobs often come without paid leave, predictable hours or career progression. Yet the cost of housing, food and education continues to assume a stable full-time income. For young people who need support, Jobseeker remains well below the poverty line. It seems that young people are working in a different economic reality to that of the policy makers.

Even higher education no longer guarantees financial security. HECS-HELP debts have ballooned, with the average debt now sitting at $27,600. While recent reforms have reduced indexation, the average repayment period has stretched to nearly 10 years. Many current politicians paid nothing for their university education - a stark reminder that they came of age in a different economy. For them, a degree was free or low-cost, led to stable well-paying jobs and opened the door to home ownership. It laid the foundation for upward mobility and secure retirement. Today, that pathway is increasingly out of reach for young people, and in particular those without access to intergenerational wealth who are navigating a system

clearly not designed for them.

A Shrinking Middle and A Growing Divide

The pressures facing younger Australians aren’t happening in a vacuum. They reflect a broader trend of wealth and power becoming increasingly concentrated. 60% of the global population experiences economic insecurity with 1% holding more wealth than 95% of humanity. Put simply, globally we’re seeing the economic risks like unaffordable housing, insecure work and rising debt being pushed onto individuals and communities, while the financial rewards remain privatised.

Australia has now become one of the most asset-dependent economies in the world. Superannuation and real estate account for nearly three quarters of household wealth. Yet much of this wealth is inaccessible for those who live in their homes. Owning a highly valued property does little for families unless they sell or pass it on. Home ownership is becoming unattainable, wages have stagnated and the social safety net is under strain. Middle class Australia is being hollowed out bringing with it a broader decline in living standards and a shift in voting patterns. Lower income households, the real ‘Aussie battlers’ are being left behind. The evidence is clear: single parents, people with disabilities and renters on income support are living in persistent economic stress. In 2024, not a single rental listing in the country was affordable for someone a single parent on parenting payment.

Political Disconnect

Politicians want youth engagement, but not youth empowerment. It’s no surprise that trust in government among younger Australians is collapsing. Just 39% of voters aged 18-29 believe politicians work in the public’s interest. Despite their growing share of the electorate, young Australians remain underrepresented in positions of power and underserved by policy.

Support is rising for independents, minor parties, and even far-right populists. Despite record-low unemployment, nearly half of Australians report experiencing financial stress. This isn’t mere cynicism, it’s a rational response to economic disenfranchisement and the widespread belief that policy isn’t designed for you. Young people are disillusioned with a housing system that treats shelter as an investment vehicle, a labour market built on precarity, and a political class more concerned with protecting wealth or maintain the status quo than delivering meaningful change. If the current Labor government hopes to avoid the same fate as the recently fractured coalition, it must realign its agenda to meaningfully support lower-income and younger Australians.

These conditions aren’t inevitable. They’re the result of political decisions. Just as policy helped create this crisis, it can help fix it. If we want a fairer and more equitable economy for society, we need more than surface level tweaks. We need structural reform.

Where to from here?

Policy is about priorities and inaction is as much a political choice as action. If we’re serious about reversing the decline in economic standards and rebuilding trust in our institutions, we need policy that reflects the realities people face: housing that’s affordable, a fairer tax system, wages that rise with the cost of living, and access to education without a lifetime of debt. Real change begins with policies shaped by real world conditions, not conservative economic theory. Australians need a system that reflects its economic reality.

Author: Hugh Kermond. Hugh is a student at the University of Sydney

Content moderator: Brianna Delahunty