Wizards of Oz
Number of Aussie billionaires rockets
Australia now has an astonishing 60 billionaires. The surging property market, a rebound in iron ore prices and strength in parts of the financial services and technology sectors have swelled the coffers of the ultra wealthy, according to data in the annual Financial Review Rich List.
Thirty years ago, Australia had just two billionaires — Kerry Packer with A$1.3 billion and Robert Holmes a Court with A$1.4b.
For those of us with salaries and mortgages, the figures are mindboggling.
In total, Australia’s richest 200 people and families are worth a record A$233b. Between them, these people have added about A$35b to their fortunes in the past 12 months.
The 10 wealthiest citizens have a combined wealth of A$75b.
The league table of wealth — who’s up, who’s down — makes for fascinating reading.
Taking out the top spot this year is Anthony Pratt, with A$12.6 billion, up from second place and A$10.3b last year. Who knew there was so much money in making cardboard boxes?
Pratt, 57, inherited the family business Visy from his father in 2009, when it was worth an estimated A$4.3b. He has tripled its value by betting big on the US economy.
His US paper and box business owns four paper mills and 68 boxmaking factories around America and has seen a huge upswing in demand for its recycled cardboard boxes. Amazon’s US customers unpack their goods from Pratt-made boxes. Americans moving home buy more than a million Pratt-made boxes from Home Depot each week, the Financial Review reports.
Pratt is one of three billionaires in the top 10 to have inherited their wealth.
James Packer inherited a magazine and TV business from his father, then sold it at a huge profit and moved into casinos. He is now worth A$4.75b, only enough to earn him ninth place on the list.
The other person who received a handy leg up in life is Gina Rinehart, who inherited mining rights to vast swathes of West Australia’s iron rich Pilbara region.
The 64 year-old’s wealth increased by more than A$4b to A$10.4b over the past 12 months thanks to a rebound in the price of iron ore.
Most of the others in the top 10 are self-made, often with rags-to-riches stories.
Harry Triguboff, the son of Russian Jews who fled the Communist revolution, ran taxis and delivered milk before turning his hand to building and property development. The 84-year-old is worth A$11.6b, up A$1b thanks to surging property prices.
Then there is Stan Perron, who has what might be described as a rag boxes-to-riches story. He left school at age 14 to sell hand-carved handkerchief boxes, then ran a fleet of taxis in Perth and built ice-skating rinks.
From there, he got into the two great sources of Australian wealth.
He invested £500 with Gina Rinehart’s father when he was prospecting for iron ore in WA in the
Many Rich Listers have followed the welltrodden path of making a fortune in one industry then pouring the proceeds into property to make an even bigger fortune.
late 1950s. This gave him a 15 per cent share of future royalties. To this day he continues to receive millions of dollars a year from the deal.
He also rode the property boom, buying office towers and shopping centres. In fact, many Rich Listers have followed the well-trodden path of making a fortune in one industry then pouring the proceeds into property to make an even bigger fortune.
Take engineer Ralph Sarich, who in the early 1970s invented the revolutionary orbital engine, which promised more power, fewer emissions and significant fuel economy. More than 40 years later technical problems have prevented the engine being widely used but he has made a lot of money from licensing parts of the technology.
But it is more than two decades since he has received any royalties from the engine or been involved with the invention. Much of his A$1.1b fortune was made from commercial property.
While property and resources underpin the wealth of many of the older established rich Australians, many of the young Rich Listers are taking a different path.
Mike Cannon-Brookes and Scott Farquahar are both 37 years old and both worth A$2.5b thanks to the float of their tech company Atlassian on the US Nasdaq in 2015.
Coming in at number 200 on the list is 33-year-old Owen Kerr, worth A$343 million, who co-founded online foreign exchange broker Pepperstone only seven years ago. Kerr and his business partner have combined tech and finance to make their fortunes.
The pair constructed their own hardware, software and fibre-optic cable network in New York to get trading information to and from their customers as fast as possible.
As the rest of the nation contemplates record low wage growth and a soft economy, the Rich List is a reminder that Australia is in the throes of a wealth boom.