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Millionaires are on the increase

AUSTRALIA is producing an average of 47 new millionaires every day - the fourth-fastest rate in the world - according to an international analysis of the super rich by global financial services providers Merrill Lynch and Capgemini.

The 2005 World Wealth Report calculates the total number of Australian millionaires last year at 134,000, up from 117,000 the year before.

The 14.8 per cent increase is topped only by Singapore (22.4 per cent), South Africa (21.6 per cent) and Hong Kong (18.8 per cent).

The annual survey defines a millionaire as someone with assets worth more than $US1 million ($1.3 million) but not including the value of their primary place of residence.

Capgemini's head of wealth management in Sydney, Gregory Smith, said Australia's surging millionaire numbers came on the back of last year's 23 per cent growth in the stock market, robust GDP, high consumer confidence and buoyancy in the real estate market.

Low interest rates and the budget's tax cuts would help nullify the negative effect of slowing growth in China, which was expected to bring about a commensurate reduction in the pace of wealth creation that would be reflected in next year's figures for 2005.

"Australia may not get 14.8 per cent next year but we would expect the rate to remain healthy," Mr Smith said.

But when it comes to being filthy rich, Australia's wealthy fall short of the mark.

The report says the average Australian millionaire is worth just $US3.1 million, compared with the global average of $US3.7 million.

Globally, there were 600,000 new millionaires created last year, bringing the estimated world total to 8.3 million.

Their net worth is estimated at $US30.2 trillion, up 8.2 per cent on 2003.

Releasing the report in New York, Merrill Lynch executive vice-president James Gorman said the two main drivers of personal wealth creation - economic growth and market capitalisation - had worked together "to generate the strongest growth in high-net-worth wealth seen in more than three years".

But he said growth had lagged in Europe, with only Britain and Spain showing growth comparable to the world average.