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Editors Note What a year for the rich. Never before have the BRW Rich 200 increased their combined fortune by so much in one year: $8.3 billion. Never before has their fortune been so great: $71.5 billion. And never before has the cut-off figure to join the Rich 200 been so high: $100 million. Without doubt, the gains are the highest in 22 years of the Rich 200. The moguls cleaned up. Kerry Packer had a vintage year, adding $1 billion to a fortune that stands well above all others, at $6.5 billion. Gerry Harvey regained his ticket to the billionaires' club, which had two new members this year, Multiplex’s John Roberts and property tycoon Stan Perron. Frank Lowy added $500 million to his net worth, Richard Pratt made an extra $400 million, as did Harry Triguboff. Only one of 11 billionaires, John Gandel, suffered a retreat in fortune. A few other entrepreneurs might well join the billionaires’ club by the end of the decade if their form continues. Aussie Home Loans' John Symond added $207 million to his fortune, Crazy John's John Ilhan became $100 million richer, and the Morgan & Banks team of Geoff Morgan and Andrew Banks galloped up the ranks from $126 million to $280 million. There are some obvious reasons for the surge in wealth: rising property prices, a rebound in world stockmarkets and booming corporate profits. Others are less obvious. Each year, BRW learns more about the Rich 200, and their business dealings give our wealth detectives new clues. Transport tycoons Lindsay Fox and Greg Poche are cases in point: the valuations of their fortunes have jumped because BRW underestimated their net wealth in previous years. Clearly this year's Rich 200, of all the Rich 200s over the years, should be a celebration of the skills of our top entrepreneurs and their extraordinary money-making talents. In a year of great economic and political uncertainty around the world, their form has rarely been better. This report should also recognise the stellar performance of the economy, and the conditions it provided for fortunes to flourish. But this year's report also asks as many questions as it answers. Two important questions concern the equality of wealth and whether the wealth surge can continue. As Professor Frank Stilwell, professor of political economy at the University of Sydney, notes on page 87, as a society, Australia seems "to be at a crossroads in our attitudes to wealth". Nearly everybody wants to be wealthier but the relationship between income and happiness is weakening. According to research Stilwell cites, more than one-fifth of the working population is 'downshifting', that is, opting out of the relentless competition for wealth accumulation. Reports in other issues of BRW support Stilwell's arguments. One of them, the annual Eye on Australia survey of consumer attitudes, which was reported in April, found that people no longer see themselves reflected in the corporate world and do not see enough companies upholding the values they hold dear. They are struggling to relate to the wealth their employers are creating. The growing concentration of wealth is also a concern. Average executive remuneration, for example, is 74 times average weekly earnings, up from 22 times 10 years ago, even though there is no clear link between executive pay and long-term company performance. And Australia's 300,000 net millionaire households, which make up less than 5% of all households, now own a quarter of all household wealth. As Stilwell notes: "There are always going to be some rich people and some poor people, but there are big variations between nations in their inequality. Australia is moving away from the middle towards a less egalitarian position on the international league table." So, as we celebrate the achievements of the super-rich, the question needs to be asked: what kind of society do we want? One where the rich get ever richer and the poor ever poorer? Even the Rich 200 who, it must be said, are becoming more philanthropic, would agree that this is not the Australia they want. The second question "can the wealth surge continue?" is easier to answer. No. A property downturn, rising interest rates and subdued stockmarkets in the next 12 months probably mean that the Rich 200's combined wealth has peaked. You can never write off the super-rich, but they will need all their powers to fly higher next year.
[EMAIL PROTECTED] www.milman.uniting.com.au Ph: 6862 5502 Mobile: 0427 625 502 14 Bushman St Parkes NSW 2870
'Comfort the afflicted and afflict the comfortable'. I prefer to die living than to live dying! "War is a poor chisel with which to carve out the future." - Martin Luther King, Jr
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