More young people are abandoning hopes of home ownership amid increasing generational inequality, according to a new report.
Anglicare's Falling Behind report, released on Tuesday, found home ownership among 25-34 year olds has fallen to an 80-year low — highlighting intergenerational inequality from tax settings that favoured housing investment.
Young Australians are facing a future where working hard does not guarantee security, Anglicare Australia executive director Kasy Chambers said after the report's release.
"The economic foundations underneath them have shifted," she said.
Ms Chambers said there was a perfect storm that led to inequality between the generations.
"What we can see is that we've got young people coming into a workforce that is more insecure, we can see that we've got increased costs," she said.
"People are studying longer. We know that it takes much longer to save a deposit for a house in terms of the annual average income versus the deposit."
Investment tax breaks fuelling the generational divide
Anglicare's report found older Australians "appear insulated" from today's economic pressures, having earned wages during a stable period in the job market and amassed wealth from investments which are taxed less severely than wages.
The report found that while older Australians' wealth has significantly increased over time, their share of income tax has not.
It said young people are "absorbing the impact" with lower wages proportional to house prices and cost of living — affording less opportunity to amass wealth.
The Albanese government this year introduced tax changes on investments including shares, investment properties and the sale of businesses.
Treasurer Jim Chalmers unveiled the sweeping changes in the May budget, describing them as the "most important and ambitious" reforms in decades, which would make the system "fairer and stronger for workers, businesses, first home buyers and future generations".
Ms Chambers welcomed the federal government's efforts to remove tax breaks for investment income, but said more measures were needed from the federal government to even the playing field.
"We need to look at taxing wealth the same way as income, because otherwise, what we're seeing is that the wealth gets concentrated," she told reporters in Canberra.
"Once it gets concentrated, it's very difficult to share that again ... one dollar is one dollar in taxation terms."
Low welfare payments prevent youth from catching up
The Anglicare head also called for a shake-up to the Youth Allowance payment, citing the report's findings that young Australians are eligible for less support from Centrelink despite facing the same costs as older people.
The maximum payment amount for a single person with no children on Youth Allowance is $677.20 a fortnight.
The rate is below the poverty line, JobSeeker and the aged pension, which Ms Chambers said is contributing to generational inequality.
"We have a social security system that literally says a young person needs less money to live on simply because of their age," Ms Chambers said.
"Rent isn't cheaper when you're 23. Groceries aren't cheaper. Electricity isn't cheaper. Yet young people are expected to survive on the lowest payment in the system."
The report also highlighted that a single person on JobSeeker falls behind by $251 a week after paying for rent, food and transport — while a single parent on parenting payment falls behind by $174 a week and a couple with two children on JobSeeker falls behind by $428 a week.
It found nearly half of all low-income renters aged under 35 are experiencing rental stress, and not a single rental property across the country was affordable for a single person on the support payment.
