HOUSEHOLD ECONOMIC RESOURCES


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INTRODUCTION

The economic wellbeing and material living standards of individuals and families is largely determined by their command over economic resources. People's income and reserves of wealth provide access to many of the goods and services consumed in daily life. This chapter provides indicators of the level and distribution of household economic resources.


HOUSEHOLD INCOME AND INCOME DISTRIBUTION

In November 2009 average weekly total earnings (trend series) for all persons in NSW were $968, slightly higher than the 2008 figure of $936. Average earnings for males were $1151 and for females the corresponding figure was $774. Some of this discrepancy may be explained by the higher incidence of women working part-time.

Household income and wealth are major determinants of household economic resources. A frequently used measure of income is equivalised disposable household income, which is disposable household income adjusted for household size and composition. This adjustment takes into account the greater income needs of larger households and the economies of scale achieved when people live together and therefore enables comparisons between households of different sizes and composition.

The mean equivalised disposable household income in NSW in 2007–08 was $821 per week while the median (the midpoint when all people have been ranked in ascending order of equivalised disposable household income) was somewhat lower at $676 per week. This difference in mean and median reflect that the distribution of income is skewed. A relatively small number of people have relatively very high household incomes while a large number of people have relatively low household incomes.

CHANGE IN HOUSEHOLD INCOME

Income distribution is also measured by comparing income between groups of people at different points in the income distribution. Low, middle and high income groups are formed by ranking people according to their equivalised disposable household income and then dividing them into ten equally sized groups or deciles. The low income group is then made up of people with equivalised disposable household incomes in the second and third deciles; the middle income group is people in the fifth and sixth deciles; and the high income group is people in the ninth and tenth deciles.

Based on 2007–08 dollars, the average equivalised disposable household income of the low and middle income groups increased by $111 (39%) and $181 (36%) between 1999–2000 and 2007–08. Over the same period the average income of the high income groups increased by $584 (52%).

ESTIMATES OF PERSONAL INCOME FOR SMALL AREAS

Analysing sources of personal income at small area level can provide valuable insight into the nature of regional economies and aspects of the economic wellbeing of the people who live there. Statistics for 2006-07 based on the Australian Taxation Office's Individual Income Tax Return Database show that the main sources of personal income for NSW people were Wages and salaries (with 78.7% contribution) followed by Investment income and Own Unincorporated Business (OUB) income (10.6% and 6.2%). Other sources comprised of Superannuation and annuity (3.4%) and Other income (1.2%). Income from Government pensions and allowances is excluded from this analysis.

Wages and salaries

In 2006–07, 79% of the personal income earned in NSW was from wages and salaries. The proportion of income earned from wages and salaries was highest in the Local Government Areas (LGAs) of Blacktown (95%), Bourke (94%), Campbelltown (94%) and Liverpool (92%). For the LGAs of Woollahra (49%), Hunter's Hill (57%), Mosman (57%) and Ku-ring-gai (58%) the share of income earned from wages and salaries was much lower than the NSW average.

The average income earned from wages and salaries in NSW was $44,850 per earner during 2006–07. There were 28 LGAs with a higher average income, most of which were located within the Sydney Statistical Division. The exception to this were LGAs within close proximity of mining centres or Australian Capital Territory. The highest average income from wages and salaries was found in the LGAs of Mosman ($106,400 per earner), Woollahra ($85,230) and Hunter's Hill ($77,800). The lowest average wage and salary incomes were found in Walcha ($28,160), Weddin ($28,440) and Guyra ($28,900).

Own Unincorporated Business income

Income from Own Unincorporated Business income (OUB) accounted for 6.2% of all personal income earned in NSW during 2006–07, with an average income of $17,890 per earner. LGAs where OUB income contributed a high share of overall income included Murrumbidgee (24%), Balranald (20%) and Central Darling (16%). 33 LGAs recorded a higher average OUB as compared to the NSW average. Greatest averages were found in Mosman ($67,450), Hunter's Hill ($57,750) and Woollahra ($56,240). There were 9 LGAs that recorded a loss from OUB.

Investment income

Some 10.6% of NSW personal income in 2006–07 was sourced from investments (on average $8,120 per earner). Again the LGAs of Woollahra (35% of investment income earned at an average of $57,810 per earner), Hunter's Hill (27% and $33,870) and Mosman (26% and $42,050) represented a concentration of wealth. In contrast, in the LGAs of Blacktown, Campbelltown, Liverpool and Fairfield less than 2% of all personal income was sourced from investments.

Superannuation and annuity

Superannuation and annuities were the source of 3.4% of all personal income in NSW in 2006–07 with the average earner receiving a dividend of $27,220. LGAs with a higher than usual proportion of income being sourced from superannuation and annuities included Eurobodalla (11.7%), Great Lakes (8.5%) and Shoalhaven (8.0%). However, the average superannuation and annuity income per earner in these areas was lower than the NSW average ($25,730 for Eurobodalla, $23,900 for Great Lakes and $24,220 for Shoalhaven). Average superannuation and annuities income was again highest in the LGAs of Woollahra ($67,650), Mosman ($54,270) and Hunter's Hill ($47,800). The LGAs with the lowest average were Balranald ($13,900), Cobar ($14,070) and Wakool ($16,190).


Data cubes with detailed statistics are available on the Downloads page.

DATA SOURCES

Australian National Accounts, State Accounts (cat. no. 5220.0)

Average Weekly Earnings, Australia (cat. no. 6302.0)

Consumer Price Index, Australia (cat. no. 6401.0)

Estimates of Personal Income for Small Areas, Time Series, 2003-04 to 2006-07 (cat. no. 6524.0.55.002)

Household Expenditure Survey, Australia: Summary of Results (cat. no. 6530.0)

Household Income and Income Distribution, Australia (cat. no. 6523.0)

Household Wealth and Wealth Distribution, Australia (cat. no. 6554.0)

Labour Price Index, Australia (cat. no. 6345.0)

Retirement and Retirement Intentions, Australia (cat. no. 6238.0)