Kim Day has got word that her mother-in-law is dying. At last. It’s good news for one half of Kath and Kim, the noughties comedy series that delighted international audiences with its satirisation-cum-celebration of the comforts, proclivities and aspirations of middle Australia. By series three, Kim (Gina Riley) is struggling; she has a new baby and is living in her mother Kath’s (Jane Turner) house in Fountain Lakes – a mottled-brick, wide-lawned every-suburb. But her mother-in-law on the Gold Coast is rich. She has a luxe flat, stuffed with valuable goods. Kim is gleeful.
As they wait at a bus stop for a tour bus to take them to factory outlets, her “second-best friend”, Sharon (Magda Szubanksi), asks: “So, do you think you’re going to get the penthouse, Kim?”
Kim nods. She’s banking on it.
And in her ferocious nodding Kim reveals herself to be a lazy, grasping fool. Her desperation for an inheritance, crass. Comical. Her naivety and greed are on full show, as much as in one of her famous malapropisms: “I want to be effluent, Mum. Effluent!”
Two decades later, the subject of inheritance is no longer a satirical plotline. The explosion of house prices since Kath and Kim’s Sitting on a Pile episode aired in 2004 means that, for many younger Australians, an inheritance has become a lifeline to securing their own futures; of maybe getting to own a home, or possibly even paying it off before they retire. It has, for others, become a pathway to their own accumulation of wealth. And many, like Kim, are banking on it.
In the next 20 years, some $5,400,000,000,000 is expected to change hands in Australia. That is $5.4tn that’s estimated to slip from the houses, superannuation funds, bank accounts and investments of baby boomers, “the richest generation to have ever lived”, into the hands of their beneficiaries. And economists are warning that this great intergenerational wealth transfer presents one of the biggest challenges the country will face over the coming decades – threatening social mobility, economic equality, faith in the fair go and even, potentially, faith in democracy itself.
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‘It’s going to be very unequal’
Guy Debelle, a former deputy governor of the Reserve Bank of Australia, has called the intergenerational wealth transfer one of the biggest challenges the country will face in the near future. Australia now has the second-highest median wealth in the world and nearly 2 million millionaires – in US dollar terms. More than half of personal wealth in the country is tied up in property.
“So it matters whether you have a parent with an expensive house or not,” Debelle says. “If you’re renting and your parents are renting, then you’re not going to get that wealth transfer from housing.”
Sign up: AU Breaking News emailThat wealth will come in greatest volume in inheritances, though a small but increasing number of Australians are receiving intergenerational wealth transfers from living parents or grandparents, officially called “inter vivo gifts”. Less officially: “the bank of mum and dad”.
In 2002, says University of Melbourne applied economist Dr Melek Cigdem-Bayram, about 5% of the Australian population received an inter vivo gift worth, on average, about $6,500. By 2022 that had increased to 7% of the population, and a gift worth on average $10,300. They’re also becoming more unequal – about half of cash gifts received are worth $1,000 or less but the top quarter are worth an average of more than $40,000, a potentially life-altering amount of money if invested early, enabling the accumulation of yet more wealth.
It is in inheritances that the real shift will occur, she says, particularly as baby boomers age. For some people an inheritance will simply mean being able to pay off their family home, for others it will mean investments, new properties and funnelling and accumulating more wealth down their family lines. “That’s when I think we will start to see the full-blown implications on wealth and equality.”
Inheritances significantly increase the likelihood of a person entering home ownership, she says – even though they are typically received when a person is 50 or 60. “We’ve seen that inheritance is being used as this sort of vehicle to build wealth and, because [inheritance and gifts] are unequally distributed, there is this fear that they might lead to future further inequalities.”
A former head of the federal Treasury, Dr Ken Henry, says: “This wealth transfer, I think, is going to be very visible. We’ve already been living through a period in which wealth has become increasingly concentrated.”
Over the course of the 21st century so far, Henry says, those at the top end of the wealth spectrum have managed to accumulate most of the increase in national wealth.
The increased unevenness in wealth is particularly pronounced among younger people. A 2024 study by the University of New South Wales and the Australian Council of Social Service found that the top 10% of under-35-year-old households hold almost half the wealth of that entire age cohort – a greater concentration of wealth than in any other age bracket. The growth in wealth for that top 10% was also fastest than in any other age group or income bracket.
“So there’s been a big change in wealth distribution,” says Bruce Bradbury, an associate professor at UNSW’s Social Policy Research Centre, who worked on the 2024 paper. “Wealth inequalities increased in Australia and most dramatically for the young.”
While the popular debate has often pitted wealthy baby boomers against impoverished gen z and millennials, the growing gap within younger generations, Bradbury says, is “an issue people need to pay more attention to”.
“It’s a bit more complicated than the gaps between young and old.”
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‘All you needed was to work hard’
When Ken Henry was growing up, all the houses around him were owned by the Housing Commission. Fibro houses all around. There were five children in the Henry home and his father, a timber worker, was on the lowest award rate of pay. The Henry house wasn’t social housing, though. “I don’t know why the hell it wasn’t,” Henry says. “[My father] must have just not known how to apply for a Housing Commission house. That’s all I can think of.”
But there were schools nearby. “It was all about education. And we did believe: you get a decent education, you’ll get ahead. You’ll be able to – no question – afford a good house, have a good life. We just took it for granted.”
Henry made use of that education, climbing the ranks of the civil service and, like many of his generation, managed to buy a home. He was able to jump from the working class to the middle class: a promise of social mobility that many Australians have held fast to.
If there were a young Ken Henry today, growing up in a similar community, his prospects for building his own wealth – his own good life – might be different. “Much, much, much different,” Henry says.
In September 2024 the chair of the Productivity Commission, Danielle Wood, declared “good news for the fair go” when research found that Australia was one of the most mobile countries in terms of income in the world – just behind Switzerland, and doing better than some of the Nordic countries.
That means that in Australia, in general, there is a good chance you may earn more than your parents did.
But the research found that wealth levels “persisted” between generations within families, particularly among those in the top 10%. Some of this was put down to the fact that wealthier parents can invest more in benefits like their children’s education, which allows them to earn wealth of their own accord. But Wood said: “Increasingly, too, direct wealth transfers through gifts, ‘bank of mum and dad’ support for property purchases and inheritances feed into wealth persistence.”
Given the trillions soon to be transferred between generations by the middle of this century (in 2024 the commission gave an estimate of $3.5tn; the economists JBWere have since put it at $5.4tn), she said: “It is likely that wealth persistence in the future will look more pronounced.”
The last mini-generation to have had a good shot at improving their standing in terms of wealth were the xennials – those in their mid-40s who straddle the X and millennial generations. “The xennials reached mid-adulthood with greater mobility tailwinds than those who have come after them,” Wood said. “There’s no guarantee the winds will be as favourable for the next generation.”
In Cigdem-Bayram’s research, the trends are concerning. The wealth gap between middle-wealth and high-wealth households is widening while the gap between middle and poor is getting smaller, she says. “This ‘middle’ is starting to hollow out.”
The middle is important, she says, because it’s the section of society that is usually highly productive and creates income for the country. It has also been the section where home ownership rates used to be high. Now, Cigdem-Bayram says, an increasing percentage of this middle is becoming reliant on their parents, stalling home ownership or waiting for inheritances or gifts to get a foothold in housing.
“This dream that I think Australians had had for many years – what was achievable – was that everybody was capable of being a homeowner,” she says. “All you needed was to work hard, and that was doable for everyone. And we’re seeing that that’s not the case any more.”
She says this inequality can snowball. “It doesn’t just end at housing or acquiring wealth or building wealth in this generation but it can carry over to future generations,” she says. “It limits social mobility for those who are starting off with low levels of wealth.”
Cigdem-Bayram is cautious of painting a bleak picture but says: “It does change the fabric of society.”
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‘It’s going to really affect the social compact’
“One of the major concerns about growing inequality is declining social cohesion, declining trust, as well as the concentration of political influence by the most wealthy and most powerful,” says University of Technology Sydney applied microeconomist Prof Peter Siminski. “There is a clear link between inequality and all sorts of social cohesion and trust issues.”
Siminski researches inequality and intergenerational economic mobility. He cautions against being overly pessimistic about inequality and mobility in Australia today – it is still fairly equal in comparison with many countries. “But it’s obvious we’re not headed in the right direction,” he says.
And, he warns: “The larger inheritances are, the more compromised equality of opportunity becomes.”
Ken Henry is long on the record for saying that the idea of an egalitarian society in Australia is a myth. “But,” he says, “it’s incredibly important that we believe that we are. Or, at least, that we value a fair go.”
The intergenerational wealth transfer, he says, will challenge both that belief in ourselves but also social cohesion more broadly: “It’s going to really test the social compact in Australia.
“Those who are not beneficiaries of the intergenerational wealth transfer stand to be somewhat disaffected by the fact that it’s getting harder – or it seems to be getting harder – to accumulate wealth from your own effort.”
The impact of that inequality and disaffection, Henry says, could be significant. On one hand, economies rely on large middle classes building wealth because that’s what generates social income. On the other, it has been linked to an erosion of loyalty to democracy. “So what it means in the first instance, I think, is that people lose faith or lose confidence in government. They lose confidence in the democratic system.”
We have seen this play out in other parts of the world, Henry says: leaders with autocratic tendencies being voted into power by disaffected electorates. Growing inequality can increase disaffection with democratic institutions. “And if [people] lose that confidence, if they lose that faith, then what tends to happen is that the democracies throw up people who really are not interested in the welfare of the majority of citizens – and things just get worse and worse.
“We have seen that these things can end up in very ugly places.”
Henry does not want to overdramatise. There is a chance, he says, that “people wake up to themselves” and the pendulum swings back away from increasing inequality.
“I would like to see us focusing with much greater energy on that question of what it means to provide a fair go to all. Are we really a community that seeks to ensure that everybody has the ability to access a good life, a life that we would all agree they have reason to value?
“I think it’s an incredibly important challenge.”
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Kath Day-Knight would be about 70 now. The house in the show – that instantly recognisable proxy for the accessible, comfortable, nothing-flash Australian every-house – sold for $190,000 in 1997, five years before Kath and Kim went to air. It sold for nearly $1.5m in 2016, nine years after the show wrapped. Kath was a stay-at-home mother. Her house now, a decade on, would be out of reach for a pair of highly educated, professional first home buyers working full-time.
Unless, of course, they got some help.
