The latest two-year survey of household incomes and wealth from the Australian Bureau of Statistics has revealed that over the past two years inequality has increased. The wealthiest 25% of Australians have increased their income by nearly double that of median income households, while the wealth holdings of the poorest 20% of households has actually declined.

The passing of the recent tax package – including stage three, which overwhelmingly benefits those earning over $120,000, has effectively ensured inequality is going to grow over the next decade.

Whether or not the ALP was correct to support the package, it is clear the cause of equality is not helped by Anthony Albanese saying that he does not “regard someone who’s earning $200,000 dollars a year as being from the top end of town”.

The latest Survey of Housing and Income, released by the ABS today, shows that belief is complete bollocks.

Not only are individuals on $200,000 very much at the top but even households earning that much are.

If we just look at all households in Australia we find that the median annual income in 2017-18 was $88,764:

But that doesn’t tell us very much about standards of living. Clearly, if you are an individual on $88,000 your standard of living is very much better than if you are a family of four getting by on that same amount.

That is why the ABS calculates the equivalised disposable income. This sets each household at a single-person level and allows us to compare the standard of living of different sized households on a like for like basis.

On this basis the median equivalised disposable income for a single person in 2017-18 was $46,748, and the 90th percentile (the point at which you earn more than 89% of households) was $92,404.

To compare household sizes we use an international standard of adding 50% for each adult and 30% for each child under 15.

This means the median standard of living for a family of four is $98,171, and similar sized household with an income of $194,048 is in the top 10%:

But that amount is disposable income – after tax. It is a bit tricky to work out what this means for gross income, but if we assume the standard 70:30 split of household incomes it means that a median income family of four would have the primary earner on $89,300 and the secondary earner on $31,500.

This also highlights that a family of four with total income above $200,000 is in the top 20% and that, should the primary earner in that household be earning more than $200,000, they are most likely in the top 10%.

Now, maybe the top 10% is not the top end of town, but if it is not, then we really are being rather dismissive of those getting by on much less. That seems to me to be a rather extraordinary position for the leader of a progressive party to be taking.

The survey also shows that over the past two years the incomes of the richest 25% have increased by the most of any income quintile. Their 2.8% growth is well ahead of the 1.6% increase of the median quintile:

It means that the Gini coefficient, which measures inequality, has risen since 2015-16. While the level is below the peak achieved at the height of the mining boom, it remains well above the level in place during the 1990s:

The top 25% now have a greater share of national income than at any time prior to 2007-08:

The survey also reveals that fewer Australian households are relying on government welfare than ever this century. Fifty six per cent of households receive 0 to less than 1% of their income from government benefits – well above the 45% in 2000:

It is pretty clear that talk of welfare bludgers is as silly as saying $200,000 is not rich.

The survey also highlights that wealth remains very much unequal in Australia.

The top 25% saw their wealth increase in the two years to 2017-18 by 17.7% to $1.8m compared to a 15% increase by median households to $320,200. Wealth for the bottom 20% actually went backwards:

One area where we are seeing changes in wealth is home ownership.

The figures highlight the growing number of people still paying off a mortgage and the decline of those who own their house outright:

Thirty two per cent of households are now renters, compared with 27% at the turn of the century.

And what we are seeing is that homeownership is declining for median to low-income households, while staying steady for the richest.

In 2000-01, 73% of median income households either owned a home outright or were paying a mortgage– now it is just 65%:

This remains the major issue for Australia’s economy, given how much of our retirement system assumes home ownership.

The survey reveals inequality remains a key problem across both income and wealth. And while income inequality gets most of the coverage, wealth inequality is where the biggest divergences are occurring.

Right now politicians are getting away with stupid statements about what incomes constitute the top end of town. Let us hope we don’t soon see equally dumb statements about $1m being median wealth.

Because unless we are able to acknowledge reality – regardless of the political blowback – we will never be able to solve the problems of inequality that are only going to get worse due to the government’s tax policy.

You might have noticed some commentary around this report that “we are a nation of millionaires” becase the average wealth of households is now over $1m.

The graph of wealth I have shown above is the equivalised wealth – which like for equivalised income – treats all households as an individual and allows us to compare like for like.

Using this measure, were a family of four to have $1m of wealth they would be in roughly the top 65%. The median wealth for a family of 4 is $731,000.

The $1m average comes from the average of every household not accouting for size of those households.

It is a rather pointless statistic as it is massively skewed by the wealthiest. Yes if you totalled up all our wealth and divided it by the number of housholds the average (or mean) would be $1.022m, but only 30% of all households in Australia have more than $1m in wealth.

But if you had a room with seven people with wealth of $100,000 and 3 people with $4m each in wealth you would not say it was a room of millionaires even if the average was $1.27m

The median household wealth is just $558,900.

As many households have less than $223,500 in wealth as do have over $1m, but I suspect we won’t see any headlines saying we are a nation of quarter millionaires.

• Greg Jericho is a Guardian Australia columnist