Gross income less income tax, the Medicare levy and the Medicare levy surcharge i.e. remaining income after taxes are deducted, which is available to support consumption and/or saving. Income tax, Medicare levy and the Medicare levy surcharge are imputed based on each person's income and other characteristics as reported in the survey. Disposable income is sometimes referred to as net income.
Equivalised disposable household income
Disposable household income adjusted using an equivalence scale. For a lone person household it is equal to disposable household income. For a household comprising more than one person, it is an indicator of the disposable household income that would need to be received by a lone person household to enjoy the same level of economic wellbeing as the household in question.
Estimated resident population (ERP)
The estimated resident population (ERP) is the official measure of the population of Australia. It is based on the concept of usual residence. For the purpose of ERP, a person is regarded as a usual resident if they have been (or are expected to be) residing in Australia for a period of 12 months or more. As such, it refers to all people, regardless of nationality, citizenship or legal status who usually live in Australia, with the exception of foreign diplomatic personnel and their families.
Gross domestic product (GDP)
Is the total market value of goods and services produced in Australia within a given period after deducting the cost of goods and services used up in the process of production but before deducting allowances for the consumption of fixed capital. Thus gross domestic product, as here defined, is 'at market prices'. It is equivalent to gross national expenditure plus exports of goods and services less imports of goods and services. Farm product is that part of gross domestic product which arises from production in agriculture and services to agriculture. It is equivalent to the value added of ANZSIC 06 subdivision 01 'Agriculture' plus taxes less subsidies on products primary to this subdivision. Non-farm product arises from production in all other industries.
The estimated market rent that a dwelling would attract if it were to be commercially rented. The addition of net imputed rent allows for more meaningful comparison of the income circumstances of people living in different tenure types. Including imputed rent as part of household income and expenditure conceptually treats owner-occupiers as if they were renting their home from themselves, thus simultaneously incurring rental expenditure and earning rental income. Imputed rent is included in income on a net basis i.e. the imputed value of the services received less the value of the housing costs incurred by the household in their role as landlord. For further information, ABS Household Income and Income Distribution, Australia, 2011-12 (cat. no. 6523.0).
Income consists of all current receipts, whether monetary or in kind, that are received by the household or by individual members of the household, and which are available for, or intended to support, current consumption.
Income includes receipts from:
- wages and salaries and other receipts from employment (whether from an employer or own incorporated enterprise), including income provided as part of salary sacrificed and/or salary package arrangements;
- profit/loss from own unincorporated business (including partnerships);
- net investment income (interest, rent, dividends, royalties);
- government pensions and allowances; and
- private transfers (e.g. superannuation, workers' compensation, income from annuities, child support, and financial support received from family members not living in the same household).
Gross income is the sum of the income from all these sources before income tax, the Medicare levy and the Medicare levy surcharge are deducted. Other measures of income are Disposable income and Equivalised disposable household income.
Note that child support and other transfers from other households are not deducted from the incomes of the households making the transfers.
When all households or persons in the population are ranked from the lowest to the highest on the basis of some characteristic such as their household income, they can then be divided into equal sized groups. Division into 100 groups gives percentiles. The highest value of the characteristic in the tenth percentile is denoted P10. The median or the top of the 50th percentile is denoted P50. P20, P80 and P90 denote the highest values in the 20th, 80th and 90th percentiles. Ratios of values at the top of selected percentiles, such as P90/P10, are often called percentile ratios. See Appendix 1 in ABS Household Income and Income Distribution, Australia, 2011-12 (cat. no. 6523.0) for information on the use of percentile ratios in analysing distributions.
Ratio of income received by high income households relative to low income households
Used here to describe the p90/p10 ratio of households using equivalised disposable household income. See 'Percentiles' for further information.
Real incomes payable and receivable are calculated by dividing the nominal (current) income flows by the implicit price deflator for gross national expenditure.
Real net national disposable income (RNNDI)
- taking real gross domestic income;
- deducting real incomes payable to the rest of the world;
- adding real incomes receivable from the rest of the world; and
- deducting the volume measure of consumption of fixed capital.
Real incomes payable and receivable are calculated by dividing the nominal income flows by the implicit price deflator for gross national expenditure. In the derivation of the aggregate, all of the adjustments are made using the chain volume aggregation method used to derive all of the ABS chain volume estimates.
Real net national disposable income (RNNDI) per capita
The ratio of RNNDI to the estimated resident population (ERP) of Australia. Population estimates use data published in the quarterly publication ABS Australian Demographic Statistics (cat. no. 3101.0). See 'Real net national disposable income (RNNDI)'.
Used here to refer to institutional units (e.g. households, corporations, non-profit institutions, government units) that maintain a centre of economic interest in Australia's domestic economic territory. For a more detailed explanation, see Section 4.36 in Australian System of National Accounts: Concepts, Sources and Methods, Edition 3 (cat. no. 5216.0).
Resident taxation rate
- Taxes on production and imports;
- plus Secondary income receivable - Total current taxes;
- minus Secondary income payable - Current taxes on income, wealth, etc from non-residents (external account);
- divided by (Gross disposable income; and
- minus Net secondary income from non-residents - Current taxes on income, wealth, etc).
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This page first published 14 November 2013, last updated 8 May 2014