Annual percentage increase in weekly income, before and after the GFC in 2008
The graphs breaks the average annual increases in household income into two periods, before and after the Global Financial Crisis (GFC) and then shows the increase in income over the entire period 1999-00 to 2017-18. [infogram id="_/aGQNjGt8yAoexdTqUrp0" prefix="Uzc" format="interactive" title="2017-18: Figure 10_Annual percentage increase in weekly income, before and after the GFC in 2008"] It shows that the average incomes (after inflation) of the highest 20% rose by an average of 5.0% per year during the boom years, and 0.6% afterwards. The incomes of the middle 20% rose more slowly, by an average of 4.1% per year during the boom and 0.5% afterwards. The incomes of the lowest 20% grew more slowly again, by 3.9% a year in the boom up to 2007, but just 0.4% from 2007 to 2017-18. Over the period as a whole, average annual income growth (after inflation) was 2.7% for the highest 20%, compared wtih 2.2% for the middle 20% and 2% for the lowest 20%. The overall increase in incomes over…
Changes in income shares before and after the GFC in 2008
This graph shows the changes in the share of household income to each income group before and after the Global Financial Crisis (GFC) and then shows the changes over the entire period 1999-00 to 2017-18. [infogram id="_/DvmKrR0aoXIOo5rQ3OCr" prefix="Sn0" format="interactive" title="2017-18: Figure 11_Changes in income shares (% of all income) before and after hte GFC in 2007-08"] Before the GFC, the share of the highest 20% group rose by 1.6%, while those of the middle and lowest 20% fell by 0.4% and 0.3% respectively. After the GFC, the share of the highest 20% fell by 0.5% while those of the middle and lowest 20% each rose by 0.1%. Over the whole period, the income share of the higest 20% increased by 1.1%, while that of the middle 20% and lowest 20%, whose shares fell by 0.3% and 0.2% respectively.
Trends in reliance on social security
[infogram id="_/0Kv0e4MppC9zd0Q2AnX1" prefix="Orm" format="interactive" title="Fig.7_Trends in reliance on income support (% of people in households receiving over 50% of income from pensions and allowances) 1999-2015"] The percentage of people in households relying mainly on social security for their income declined overall between 1999-00 and 2015-16, although the share of people of working age relying on these payments rose in 2007-08 due to the Global Financial Crisis. This long-term decline in social security reliance was due mainly to lower unemployment (before 2008), the closure of ‘pension’ payments for people between 50 and 64 years in the mid-1990s, ‘welfare to work’ policies that also restricted access to pension payments for people of working age (in 2007 and 2012), and growth in the private incomes of retirees (from superannuation, employment and other investments). You can find out more about changes in Australia’s income support system on our Causes and Solutions……
Trends in the single rate of Newstart Allowance (now JobSeeker), pensions and wages
[infogram id="_/oPpZqcAZ5xL6HtnhQS4R" prefix="HCT" format="interactive" title="Fig.33_Trends in social security payments compared with wages"] This contrasts changes in the maximum weekly rates of Newstart Allowance and Pensions for single adults with changes in full time wages (both median and average measures) between 1993 and 2019. The ‘real’ value of pensions rose from $283 per week to $437, an increase of 56%, while Newstart rose from $250 to $270 (largely due to ‘compensation’ for the GST, and the energy supplement compensating for higher energy prices), an increase of just 8%. The main reasons for this disparity were that, unlike pensions, Newstart Allowance is only indexed to consumer prices and not wage movements (and was not increased in ‘real terms’ since 1994), and that Allowance recipients missed out on the $32pw increase in the pension rate in 2009. Over this period the gap between the two payments increased from $33 to $171 per week. The graph also shows that the…
Reduction in inequality due to the social security and income tax systems
[infogram id="_/GHRuc11fIziNCKG63Wzw" prefix="hTD" format="interactive" title="Fig.6_Reduction in inequality due to the social security and income tax systems"] This tracks the impact of the income support and income tax systems on household income inequality in Australia, using the Gini Coefficient. The bottom lines show the impact on inequality of the social security system – the difference between private income and gross income. The top lines show the impact on inequality of the income tax system – the difference between gross income and disposable income. Social security payments have a greater overall impact on inequality (ranging from a 9.4% to 11.6% reduction in the Gini for weekly income) than income tax does (ranging from a 4.3% to 5.8% reduction). The impact of social security on inequality decreased in the years before 2008 (represented by the rise in the bottom row), increased shortly afterwards (represented by the fall in the bottom row), then declined after 2011. The…
Overall trends in income inequality from 1999 to 2015
[infogram id="_/sfN2lfV06jGgu0YfuMcu" prefix="Qyv" format="interactive" title="Fig.2_Overall trends in income inequality from 1999-00 to 2015-16 (Gini coefficients for weekly & annual income)"]
Level of income inequality in OECD countries
These charts compare overall income inequality in OECD countries, using the Gini coefficient, for which a higher score represents greater inequality. [infogram id="_/zSlYrwklEeO2NV0TWy5e" prefix="bQJ" format="interactive" title="2023: International comparison of income inequality"] 2019-20: The chart shows that income inequality in Australia in 2021 or latest available date is close to the average level for wealthy nations, based on OECD data. 2017-18: The chart shows that income inequality in Australia in 2018 - the latest date for which comparative data is available - was close to the average level for wealthy nations. 2015-16: It shows that income inequality in Australia in 2015 – the latest date for which comparative data is available – was higher than the OECD average. Australia sits between other English-speaking countries, above Canada but below the United States and the United Kingdom; and alongside some countries with lower income levels, like Greece and Portugal. Most…
People in poverty & poverty gaps
This table shows the number and percentage of people who live below the 50% and 60% of median income poverty lines in 2022-23, the latest data available, as well as previously in 2019-20, 2017-18 and 2015-16. It also shows the ‘poverty gap’, a measure of the depth of poverty for those living below the poverty line (the average gap between the incomes of people in poverty and the poverty line). It is important to measure poverty gaps, because even if the rate of poverty is reduced, this could still leave many people living well below the poverty line. 2022-23: After taking account of housing costs, over one in seven people (14.2%) live below the 50% of median income poverty line. The poverty rate among children is higher, over one in six children (15.6%). There are 3,706,244 people living in poverty in Australia. This figure includes 756,734 children. The ‘poverty gap’ is 47% of the poverty line, or $390 a week. That is, people below the poverty line have incomes that are, on…
Trends in the poverty gap
[infogram id="_/GJCBZ2rBedXw2stcKEdp" prefix="YZv" format="interactive" title="Average poverty gap for all households in poverty"] This graph shows the average poverty gap for all people living below the poverty line, in dollars per week. These figures are indexed for inflation and are expressed in constant 2017-18 values. They are not adjusted for household size, so the average poverty gaps are boosted by the bigger gaps for larger households. It shows that average poverty gaps increased after 2007.
Trends in the poverty gap as a percentage of poverty line, 1999-00 to 2017-18
[infogram id="_/bBTK9obiKJ9ZQFca9x73" prefix="ZiW" format="interactive" title="Copy: Fig.3_ Average poverty gap for all households in poverty (% of the poverty line, after housing, 2017-18"] This graph measures the poverty gap (the average gap between the household incomes of those in poverty and the poverty line) as a percentage of the poverty line. It shows that the average gap between the household incomes of those in poverty and the poverty line rose from 34.3% of the poverty line in 1999-00 to 40.8% in 2003, fell in the boom years to 36.3% in 2007-08, then rose in sawtooth fashion to 44.2% in 2017-18. Broadly speaking, this is the opposite pattern to the trends in poverty rates. This reflects the changing composition of households below the poverty line. For example, a growing number of older people fell below the poverty line during the boom years from 2003 to 2007, but (relative to others in poverty such as people on Newstart Allowance) their average incomes were not as far…