MAIN FEATURES

Introduction
Trends in Average Wages and Salaries, 2003-04 to 2008-09
Regional Variations in Average Annual Growth Rates


INTRODUCTION

This article and the accompanying data are provided to support analyses of local economic conditions for regions throughout Australia. The data are produced by the ABS using personal income tax (PIT) information from the Australian Taxation Office (ATO).

Wage and salary statistics in this issue are presented for the years 2003-04 to 2008-09 on a range of geographic levels.

There has been a change in the occupational classification used for 2008-09, discussed further in the section 'Changes in Occupational Classification in 2008-09'. There are also breaks in series, discussed further in the section 'Series Breaks'.

Changes in taxation policy can occur in any income year and can, for example, influence whether an individual needs to lodge a tax return, and what is required to be reported on the tax form. Breaks in the ABS series associated with changes of this type can impact on some year-to-year comparisons, however there are still a range of regional analyses able to be undertaken, including:

• analysing the regional differences in Wage and salary earners and income in any given year;
• analysing the growth rate of Wage and salary income between years but not including any year affected by series breaks.

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:

• have average incomes from Wages and salaries increased over time, and if so by how much?
• which regions experienced higher growth in average Wages and salaries income compared to others?
• have average incomes from Wages and salaries increased at higher rates in capital city areas compared with regions outside capital cities?
• which regions with high average incomes from Wages and salaries also experienced high growth rates in Wages and salaries?
• which regions with low average incomes experienced high growth rates in Wages and salaries?

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.

Series Breaks

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.

In 2007-08, a one-off tax bonus was introduced as part of the Economic Stimulus Package in response to the Global Financial Crisis. The bonus was available to all individuals whose 2007-08 taxable income was $100,000 or less, whose adjusted tax liability was greater than zero and who had filed their 2007-08 tax return by 30 June 2009. The ATO has reported in their Taxation Statistics publication that there was a 7.1% increase in individual tax lodgements for the 2007-08 financial year, in part due to individual lodgements being brought forward to access the tax bonus. This was followed by a fall of 2.8% in individual tax lodgements in 2008-09.

In the ABS series, the number of Wage and salary earners increased by 8.1%, from 9.3 million in 2006-07 to 10.1 million in 2007-08, before falling 3.3% to 9.7 million in 2008-09. Income derived from Wages and salaries increased by 12.8% ($50.3 billion) between 2006-07 and 2007-08, but rose by only 2.6% ($11.3 billion) from 2007-08 to 2008-09.

This means there is a break in series between 2006-07 and 2007-08 and another break between 2007-08 and 2008-09.

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).

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.

	Average Wage and Salary Income						Average Annual Growth Rate
	2003-04	2004-05	2005-06	2006-07	2007-08	2008-09
	$	$	$	$	$	$	%
New South Wales	39 648	41 433	43 032	44 850	46 513	48 793	4.2
Sydney SD	42 811	44 799	46 425	48 428	50 136	52 325	4.1
Balance NSW	33 360	34 774	36 307	37 717	39 114	41 600	4.5
Victoria	36 882	38 421	39 861	41 260	42 782	45 246	4.2
Melbourne SD	38 762	40 368	41 840	43 302	44 837	47 351	4.1
Balance Vic	31 412	32 720	34 041	35 188	36 478	38 830	4.3
Queensland	33 965	35 655	37 680	39 735	41 687	44 501	5.6
Brisbane SD	35 775	37 461	39 597	41 720	43 893	46 814	5.5
Balance Qld	32 243	33 944	35 879	37 867	39 586	42 311	5.6
South Australia	33 623	35 061	36 357	37 830	39 492	41 896	4.5
Adelaide SD	34 728	36 229	37 521	38 936	40 546	43 056	4.4
Balance SA	30 357	31 586	32 894	34 534	36 302	38 418	4.8
Western Australia	36 048	38 219	40 575	43 226	46 199	50 438	6.9
Perth SD	36 523	38 712	41 095	43 785	46 804	51 125	7.0
Balance WA	34 553	36 679	38 932	41 428	44 266	48 238	6.9
Tasmania	31 358	32 467	33 903	35 288	36 874	39 398	4.7
Greater Hobart SD	33 021	34 118	35 660	37 065	38 563	41 435	4.6
Balance Tas	30 091	31 199	32 527	33 898	35 541	37 808	4.7
Northern Territory	37 665	40 016	41 589	43 027	45 216	48 049	5.0
Darwin SD	39 437	42 222	43 723	45 014	47 298	50 189	4.9
Balance NT	34 466	35 983	37 618	39 278	41 251	43 986	5.0
ACT	42 834	45 922	47 061	49 116	51 387	54 747	5.0
Canberra SD	42 841	45 932	47 071	49 122	51 393	54 756	5.0
Australia	36 889	38 607	40 276	42 081	43 921	46 599	4.8
All Capital Cities	39 112	40 939	42 620	44 495	46 397	49 111	4.7
Balance of Australia	32 452	33 963	35 615	37 259	38 902	41 532	5.1

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.



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:

• high income and high growth;
• high income and low growth;
• low income and high growth;
• low income and low growth;
• and all other regions.

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.





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.