SOCIAL TRENDS - INCOME AND HOUSING
CHANGES TO INCOME MEASURES - SALARY SACRIFICE
The following analysis reports on the income received by Western Australian households in the form of wages and salaries, profits (losses) from own unincorporated business, investment income (eg. interest, rents, dividends), government pensions and allowances, and private cash transfers (eg. superannuation). Wages and salaries estimates for 2003-04 and 2005-06 now include all benefits received through salary sacrifice arrangements, where previously only some salary sacrificed amounts were included. Therefore some caution should be taken when interpreting changes in incomes before and after 2003-04.
HOUSEHOLD INCOME
Equivalised household income is an indicator of the economic resources available to a standardised household in terms of size and composition. In 2006, the mean equivalised disposable income for all households in Western Australia was $658 per week, slightly higher than the national average of $644 per week. Between 1995-96 and 2005-06, the mean equivalised disposable income of low income households increased 39% ($254-$354 per week), greater than the rises of 36% for middle income households ($426-$581 per week) and 35% for high income households ($927-$1,255 per week).
Between 2004-05 and 2005-06, the mean equivalised disposable income of low income households in Western Australia rose 10%, from $321 to $354 per week. Over the same period, the mean equivalised disposable income of middle income households rose 13% ($512-$581 per week) and 18% for high income households ($1,061-$1,255 per week).
INCOME DISTRIBUTION
In 2005-06, Western Australia's median equivalised household disposable income was $581 per week, lower than the mean household income of $658 per week - median income is the level of income which divides the units in a group into two equal parts, one half having incomes above the median and the other half having incomes below the median. The difference between the median and mean can be explained by a relatively small number of people with very high household incomes and a large number of people with relatively lower household incomes.
Percentile ratios are another measure of the spread of incomes across the population. They summarise the relative distance between extreme points on the income distribution. The P80/P20 ratio is a measure of income distribution which compares the relative income level of the bottom 80% of the population from the top 20% (P80), with the bottom 20% of the population from the remainder (P20). Based on this measure, generally, the distribution of income in Western Australia has increased over the last decade. In 2005-06, P80 was $886 per week and P20 was $355 per week, giving a P80/P20 ratio of 2.5 - lower than the ratios of 2.8 in 1995-96 and 2.6 in 2003-04, although slightly higher than in 2004-05 (2.4). A lower P80/P20 ratio means a greater share of income goes to the bottom 20% of income earners (low income earners) relative to the majority of the population (80%). A measure of income distribution is also provided by the income shares going to groups of people at different points in the income distribution. In 2005-06, 38% of total equivalised disposable household income went to people in the 'high income' group (i.e. the 20% of the population in the second and third income deciles) and 11% went to people in the 'low income' group (i.e. the 20% of the population in the ninth and tenth deciles).
The Gini coefficient is a single statistic that lies between 0-1 and summarises the degree of inequality, with values closer to 0 representing a lesser degree of inequality and values closer to 1 representing greater inequality. In 2005-06, the Gini coefficient increased to 0.303 from 0.287 in 2004-05.
SOURCE OF INCOME
In 2005-06, wages and salaries were the main source of income for most Western Australian households (61%). Almost one-quarter (24%) of households relied on government pensions and allowances as their main source of income. The vast majority of 'lone person aged 65+' households (80%) and 'couple only aged 65+' households (70%) received government pensions and allowances as their main source of income. Almost half of 'one parent with dependent children' households (45%) also relied on government pensions and allowances as their main source of income.
HOUSING
In 2005-06, there were 803,700 occupied private dwellings in Western Australia, 23% more than in 1995-96. There were 21,600 new dwellings built and completed in 2005-06, the most since 1996-97. The average number of persons per household (2.4) and the average number of bedrooms per dwelling (3.2) remained relatively unchanged since 1996-97.
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