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In 2008-09, around 9.7 million Australians derived income from Wages and salaries. Over $453 billion - over 80% of all income earned by Australian taxpayers - was earned from Wages and salaries in 2008-09. As the economic well-being of most Australians is largely determined by the amount of income they receive, analysing geographical variations in Wages and salaries - and how these change over time - can provide valuable information about relative advantage and disadvantage in regions and the nature of regional economies in general. Wealth is also an important contributor to economic well-being; some people on low incomes may have property and business assets to draw on, whilst others on high incomes may also have high levels of debt.
The data presented in this article can be used to explore questions such as:
This article illustrates ways that Wage and salary data can be used to explore regional variations in income. Further analysis of regional incomes can be undertaken using the data contained in the spreadsheets in the Downloads tab of this release.
The statistics have been compiled using aggregated individual income tax data from the Australian Taxation Office (ATO). The Australian Bureau of Statistics (ABS) wishes to acknowledge the invaluable support of the ATO in compiling these statistics.
There are two breaks in series, which means that some of the data is not able to be compared over time for some selected years.
Impacts of Series Breaks on Data Analysis
Analysis of the change in the number of individuals and in total Wage and salary income can be made between any year in the series except for 2007-08. However, average Wage and salary income in 2007-08 can be used for analysis, although some care should be exercised when doing so. If the changes in Wage and salary income and the number of individuals associated with a particular event are in similar proportions, then the average is not materially affected. Data for Australia shows that from 2003-04 to 2007-08 income from Wages and salaries grew by a larger proportion each year than the number of Wage and salary earners, leading to a rise in average income from Wages and salaries in this period. In 2008-09, Wage and salary income rose by a small proportion, but the number of Wage and salary earners fell, resulting in a further increase in average Wage and salary income. Users should exercise some caution in analysing average Wage and salary incomes for regions in 2007-08, however, as the changes associated with the tax bonus may not be equally distributed across areas (for example, different effects may be seen in regions with large numbers of low income earners).
The impacts of breaks in series are illustrated in the following graphs. Graphs 1 and 2 show series breaks in persons and total income for Wages and salaries. There has not been a series break in average Wage and salary income in 2007-08 (Graph 3).
Graph 1 - NUMBER OF PERSONS WITH WAGE AND SALARY INCOME - Australia (a)
(a) Breaks in series between 2006-07 and 2007-08 and between 2007-08 and 2008-09
Graph 2 - TOTAL WAGE AND SALARY INCOME - Australia (a)
(a) Breaks in series between 2006-07 and 2007-08 and between 2007-08 and 2008-09
Graph 3 - AVERAGE WAGE AND SALARY INCOME - Australia (a)
Changes in Occupation Classification in 2008-09
In addition to the breaks in series associated with the one-off tax bonus, there has been a change in the classification used by the ATO to code occupation data. In 2009 the ATO moved from using the Australian Standard Classification of Occupations (ASCO) to the Australian and New Zealand Standard of Occupations (ANZSCO). The occupation categories for 2008-09 presented in this issue are not therefore comparable to those featured for 2003-04 to 2007-08 in previous issues of this product.
TRENDS IN AVERAGE WAGES AND SALARIES, 2003-04 TO 2008-09
On average, Australians earned $46,599 in Wages and salaries in 2008-09; up from $43,921 in the previous year. Table 1 shows that the Australian Capital Territory had the highest average annual income from Wages and salaries in each year between 2003-04 and 2008-09, recording $54,747 in 2008-09.
From 2003-04 to 2008-09, the average annual growth rate in average Wage and salary income in Australia was 4.8%.
Western Australia recorded the highest growth rate of average annual Wages and salaries between 2003-04 and 2008-09 (6.9%), followed by Queensland (5.6%). The high growth rate for Western Australia resulted in that state having the second highest average annual Wage and salary income in 2008-09 ($50,438), moving up from fifth highest in 2003-04 (overtaking New South Wales, which had held second place up until 2007-08).
For most States and Territories, and for Australia as a whole, average annual growth rates for regions outside of capital cities either matched or were slightly higher than those for capital city statistical divisions (SDs), although average annual incomes were considerably higher in capital city SDs.
Table 1. AVERAGE ANNUAL WAGES AND SALARIES - By State and Territory, 2003-04 to 2008-09
REGIONAL VARIATIONS IN AVERAGE ANNUAL GROWTH RATES
Which Statistical Local Areas (SLA) experienced the highest growth in average Wage and Salary income between 2003-04 and 2008-09? Map 1 shows considerable variation in average annual growth rates across Australia.
Map 1. GROWTH OF AVERAGE INCOME FROM WAGES AND SALARIES - By Statistical Local Areas, Australia, 2003-04 to 2008-09
The majority of SLAs with the highest average annual growth rate of average Wage and salary income between 2003-04 and 2008-09 were located in Western Australia and Queensland. In Western Australia, these included inland and coastal SLAs surrounding Perth that offered semi-rural or rural lifestyles within 2-3 hours drive of the city (e.g. the SLAs of Wandering, Cuballing and Boddington) and also the remote mining area of Ravensthorpe in the state's south east. However, the number of Wage and salary earners in Ravensthorpe fell 26% between 2007-08 and 2008-09 (down from 835 to 617), while average Wage and salary income dropped by over 8% over the same period. This coincided with the closure of the Ravensthorpe nickel mine in 2009.
In Queensland, many of the areas of highest growth were associated with emerging energy resource sectors (e.g. Dalby-Chinchilla in the state's Western Downs region). Other SLAs with high growth rates were located in Queensland's Central Highlands and in Mackay (which contains much of the region's engineering, manufacturing and mining services industries).
However, high growth rates do not necessarily equate to high incomes. For example, while the SLA of Kojonup (in Western Australia's wheatbelt) experienced an 8% average annual increase in average Wage and salary income between 2003-04 and 2008-09, by the end of the period the average annual income in the area was just $33,852 (well below the national average of $46,599). Some SLAs with high average Wage and salary incomes experienced low average annual growth rates, while other regions recorded both low incomes and low growth rates in average Wages and salaries.
Map 2 presents a geographical distribution of all SLAs in Australia that fall into each of the following five categories:
SLAs were grouped according to whether their average annual incomes in 2008-09 fell in the top or bottom 20% of SLAs (i.e. were above $50,979 or below $35,966) and whether their average annual growth rate in average Wages and salaries was above or below the Australian rate of 4.8% between 2003-04 and 2008-09.
Map 2. STATISTICAL LOCAL AREAS BY AVERAGE WAGE AND SALARY INCOME 2008-09 AND GROWTH RATES
Regions with high average annual incomes and high average annual growth rates include SLAs in most capital cities (particularly the metropolitan areas of Brisbane, Perth and Sydney) and remote mining areas in Western Australia and Queensland. Regions with low average annual incomes and high average annual growth rates include: Far North Queensland; SLAs north-east and south-east of Perth; and SLAs in the mid-north and west coast of South Australia.
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