The ranks of the billionaires are swelling. In the 2005 BRW Rich 200 there are six new billionaires, bringing the total to 17. There is also a billionaire debutante on the list. The Brisbane retailer and property investor John Van Lieshout appears for the first time on the Rich 200 (valued at $1 billion) and is Queensland's first billionaire.
Kerry Packer remains Australia's richest person, valued this year at $6.9 billion, an increase of $400 million in the past 12 months. There has been some change in the rankings just under Packer. In 2004, the shopping centre magnate Frank Lowy and cardboard king Richard Pratt were equal second, both valued at $4.2 billion. This year, Lowy takes second place by increasing his wealth by $600 million, compared with Pratt's increase of $500 million.
In addition to Van Lieshout, new billionaires include the gaming entrepreneur Len Ainsworth, whose fortune has risen from $962 million to $1.6 billion. The biggest shareholders in Rural Press, John and Tim Fairfax, increased their fortunes to $1 billion from $750 million due to the increase in the media company's share price. The property developer Lang Walker has also had a good year; his wealth increased from $759 million in 2004 to $1.16 billion. Another billionaire is Bruce Gordon, whose WIN television empire contributes to his $1.3-billion fortune. His wealth has risen from $660 million due to the success of the company and BRW's better understanding of his business.
In the family section of the Rich 200, there is also a new billionaire family. Melbourne's Wilsons, who are now worth $1.07 billion, have benefited from the strength of the building and construction industry. The share price of their plumbing supply company, Reece, has skyrocketed in the past 12 months. Their wealth has increased from $650 million in 2004. There are now four billionaire families in Australia - the Smorgons, Libermans, Besens and Wilsons.
The 2004 version of the Rich 200 was dubbed "The richest list of all" due to the success of those on the list and the substantial increase in wealth from previous years. The 2005 list dwarfs last year's record of wealth. The minimum amount to get on the Rich 200 increases from $100 million to $110 million. The total wealth held by those on the Rich 200 this year is $83.37 billion, an increase of 16.57% from 2004. The average fortune in 2005 is $417 million, up from $357 million in 2004.
Almost whatever way the 2005 Rich 200 is examined, the rich have done well. Seventy-two per cent of those on the list increased their wealth, and fortunes rose regardless of industry or region.
Even though the bar has been raised for entry to the Rich 200, plenty of entrepreneurs make their debuts this year. There are 21 new entrants. Most of them have made their fortunes through property development or in the resources sector. New entrants include Tony Perich, a big landholder in western Sydney, who is benefiting from the rezoning of his property for residential use. He is the second-highest debut on the list, worth an estimated $515 million. Another property-related new entrant is Tony Lennon. The 63-year-old Perth real estate agent seems unaffected by his $200-million fortune, which he made through the listing of the real estate business Peet & Company.
The recent resources boom has had a big effect on the Rich 200. Despite the erratic share price of Fortescue Metals Group, its biggest shareholder, Andrew Forrest, debuts on the list at $340 million. As Forrest makes his wealth from iron ore, coal miners are also raking it in. The three principals of Excel Coal, Tony Haggarty, Chris Ellis and Roger Massy-Greene, debut on the list with fortunes of $190 million, $150 million and $110 million respectively.
Most of those on the Rich 200 have increased their wealth, but there are some standouts. The biggest proportional rise in wealth in the past 12 months is by Queenslander Ken Talbot, whose wealth is derived from his shareholding in Macarthur Coal. In 2004, his wealth was a respectable $130 million; this year it has risen nearly 290% to $506 million.
Another big resources-related wealth increase came from Gina Rinehart, whose fortune increased by 125% from $400 million to $900 million. The increase in demand and price for iron ore has boosted her fortune, based on the minerals royalty established by her father, Lang Hancock. Not only does this income stream fuel her wealth, but Rinehart is on the cusp of establishing her own mining venture, Hope Downs, which could lift her fortune even further.
A substantial wealth increase was also achieved by John Grill, whose fortune rose by more than 100%, to $234 million. Grill, who has spent his entire professional life as an engineer, is not your typical brash entrepreneur. Through his share ownership of the engineering consultancy WorleyParsons, his wealth is substantial, and he has a reputation for being hands-on in the company's projects, which include work on pipelines, mines and in the petrochemical sector.
Back to earth
To reinforce the fact that the wealthy have had a good year, even some of the falls in wealth are not as bad as they might seem. The biggest fall was that of Gordon Fu. His valuation fell 30% from $583 million to $407 million. But this is more of a revision than a loss, due to BRW having a better understanding of the debt position of Australia's biggest private shopping-centre owner.
One group of people on the list that have experienced a genuine deterioration in their financial position are the founders of Flight Centre. Geoff Harris, Bill James, Jim Goldburg and Graham Turner have created a remarkable company and established substantial fortunes. But due to the fall in the share price, their valuations have dropped 10-15%. Harris goes from $350 million to $300 million; James from $281 million to $246 million; Goldburg from $145 million to $127 million; and Turner from $330 million to $295 million. These falls are a small reduction in the fortunes of a group of entrepreneurs whose wealth growth looked unstoppable. The Flight Centre share price rose from $1.21 at the beginning of 1995 to a high of $28.46 in mid-2002. Until the beginning of 2005, the price was about $19, but during the year it has fallen below $14.