Anything goes

According to a story in the Herald, based on what looks like it might be a bogus poll (press release), you need $5.3 million in Australia now to be considered rich.  If we assumed the number did actually measure something, how surprising would it be?

Before “Who wants to be a millionaire?” was a quiz show franchise, it was a Cole Porter song, from the  1956 movie “High Society”, so that seems a reasonable comparison period. The Australian CPI has gone up by a factor of 15.6 since 1956 (and while Australia didn’t have dollars until 1966, US and Australian dollars were roughly comparable then).

On top of pure currency conversion, though, Australia is richer now than in 1956.  Australia’s GDP in current purchasing-power adjusted dollars is nearly 8 times what it was in 1956. The population has gone from 9.4 million to 24.1 million, so real GDP per capita is up by a factor of about 3.5.

So, a 1956 million would be 15.6 current millions just from inflation, and over $50 million as a share of Australia’s economy: a millionaire in those days was not just rich, but Big Rich — as the song says: “flashy flunkies everywhere… a gigantic yacht… liveried chauffeur.”

We’re not given any real reason to believe the $5.3 million figure — there’s no reason you should rely on it more than your own guess. And ‘millionaire’ isn’t a useful comparison without a lot of additional qualification.