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One in a million Australians a billionaire

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Economics Writer for The Sydney Morning Herald.
Jessica’s first book Zombies, Bananas and Why There Are No Economists in Heaven is available as an ebook and in hard copy

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The gloves are off. It's open season on billionaires.

Forbes magazine this week released its annual survey of billionaires, and, despite slumping share portfolios and asset prices, their number continues to grow.

The world minted 16 new billionaires during the past year. Out of the world's 200 or so countries, billionaires now call 58 home.

America retains its title as world-beating manufacturer of billionaires, producing 425 of the 1226 worldwide. One in every 731,000 Americans can lay claim to being worth a thousand million dollars or more.

Russia is home to the second biggest number of billionaires, producing 96 out of a total population of 142 million - that's one for every 1.5 million Russians. China comes in third with 95, although this represents a paltry one for every 14 million Chinese people.

Australia, however, is punching well above its weight - a rare bright spot on a wealth landscape marred by a moribund manufacturing sector. It contributed 18 billionaires to the tally - that's one for every million or so of us.

It's a pleasing symmetry with the $US18 billion ($16.9 billion) fortune of the richest Australian - the world's 29th richest person and fourth-richest woman - Gina Rinehart. Rinehart doubled her money in January thanks to a deal with South Korean steel giant Posco to take a 15 per cent stake in her Roy Hill iron ore mine.

Indeed, Australia's top three billionaires all derive their wealth from the rich reserves of minerals that lie underfoot. In second place, the South African-born, now Swiss resident chief executive of the mining company Glencore, Ivan Glasenberg, has $US7.3 billion . Mining upstart Andrew ''Twiggy'' Forrest also makes it into the world's top 200 with a net worth of $US5.8 billion.

The rest of Australia's billionaires made it big in gaming (James Packer $US4.7 billion), shopping malls (Frank Lowy $US4.4 billion, John Gandel $US3.2 billion), real estate (Harry Triguboff $US4 billion) finance, media, logistics, hospitals and retail. Retail giant Gerry Harvey, however, missed the cut this year thanks to more cautious consumers.

Such is the fascination with the excessive wealth of the ever-expanding fortunate few, the news service Bloomberg this week also launched a daily index of the world's top 20 billionaires.

Those of a jealous disposition can log in daily to check in with movements in Warren Buffett's $US44 billion fortune, or that of the world's richest man, Mexican telecommunications tycoon, Carlos Slim Helu, on $US69 billion.

Billionaires have been dragged out into the global spotlight, and they're not necessarily enjoying the attention.

At the heart of this billionaires fever is a concern to get to the bottom of what constitutes ''excessive wealth''. It's been a long time since anyone suggested resources should be evenly distributed across societies. A little bit of inequality can be a good thing, by providing the incentive to innovate and produce. Society owes much to the technological advances of some of these billionaires, such as Bill Gates, Facebook founder Mark Zuckerberg and the late Steve Jobs, who's $US9 billion fortune now passes to his wife and family.

Many's a woman who would welcome the entry of Sara Blakely - the founder of Spanx - into the club.

Behind the concern about billionaires is a concern about whether it's possible to generate such wealth by getting paid for creating value.

There are only two ways to make money - create value, or get it from someone else; grow the economic pie, or bite into someone else's piece. The first method is rightfully admired, the second - be it through inheritance, asset price inflation which forces others to pay more, or through exploiting weaknesses in the tax system - is the cause of much ire.

Billionaires might not like the scrutiny, but it's important we figure out which method is in the ascendancy.

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