REGIONAL VARIATIONS IN INCOME (OVERVIEW)
The information in this release has been sourced from the Australian Tax Office (ATO). It presents regional data on the number of income earners and amounts they received in the 2012-13 financial year for the following categories; employee income, own unincorporated business income, investment income, superannuation and annuities, other income (excluding Government pensions and allowances) and total income.
These statistics enable users to analyse the level, composition and distribution of personal income in regions. They provide insights into the nature of regional economies and the economic well-being of the people who live there. Questions such as 'What is the median total income in my area?' or 'How does my region compare with a neighbouring area?' can be answered by using these data. Further analysis of regional income data can be undertaken by accessing the spreadsheets (or data cubes) attached to this article.
Information is presented for a variety of geographies, including Local Government Areas (LGAs), Statistical Area Level 2s (SA2) and Greater Capital City Statistical Areas (GCCSA), reflecting regions from the Australian Statistical Geography Standard (ASGS).
The Australian Bureau of Statistics (ABS) wishes to acknowledge the invaluable support of the ATO in compiling these statistics.
When interpreting these results, it should be noted that some low income earners, for example those receiving Government pensions and allowances, or those who earned below the tax free threshold, may not be present in the data, as they may not be required to lodge personal tax forms. More regional information on the number of people receiving Government pensions and allowances can be obtained from Data by Region.
Persons with income which was completely tax free or completely tax exempt are also excluded from the data. For example, a change to legislation relating to superannuation, taking effect from 1 July 2007, meant that people aged 60 years and over who receive superannuation income in the form of a lump sum or income stream (such as a pension) from a taxed source, receive that income tax free. If a person has no other income, or their total income is below the tax-free threshold, or any tax payable is mitigated by a tax offset, then this person may not be required to lodge a tax return. As a result the national estimate of superannuation and annuities income ($10.3b) is understated. An alternative data source with fuller data coverage, the ABS Survey of Income and Housing, estimates a level of $28.1b for superannuation pension stream income (excluding lump sum superannuation payments). For more information, please view the data cubes in Survey of Income and Housing, User Guide, Australia, 2013-14.
The ABS is currently investigating ways of achieving a fuller personal income account for regions, by incorporating other administrative data sources and statistical techniques. However, after taking into account the current limitations of the data, there is no doubt that the data set provides a rich source of relevant statistical information about personal income for regions across Australia. The ABS looks forward to further enhancing this data set in future editions.
Total income (from all sources excluding Government pensions and allowances) for persons who submitted a tax return for the 2012-13 financial year was $739.0 billion, with employee income contributing 77.9% of total income, followed by investment income (12.4%) and own unincorporated business income (7.5%).
As Table 1 shows the median total income for Australia in 2012-13 was $44,940, while the mean was somewhat higher at $58,389. The medians for employee, own unincorportated business, investment, superannuation & annuities, other and total income are all less than their means, reflecting positively skewed earnings distributions; that is, the income values tend to cluster towards the lower end of the scale - with a small number of high (or very high) incomes at the upper end of the scale. The median (i.e. the midpoint when all people are ranked in ascending order of income) is used throughout this section, as it is less impacted by extreme values and therefore more reflective of typical incomes.
Table 1. SOURCES OF INCOME, 2012-13 - Australia
|Sources of Income|
Number of earners
Median age of earners
Median income per earner (b)
per earner (b)
Source of income
as % of
|Own unincorporated business|
|Superannuation & annuities (c)|
|Total income (d) (e)|
|(a) Persons may have more than one source of income.|
(b) Means and medians are calculated using non-zero income earners for each source of income. See Explanatory Notes paragraphs 20 and 31 for more information.
(c) Data for Superannuation and annuities are understated. See Explanatory Notes, paragraphs 38 and 39, for more information.
(d) Excludes Government pensions and allowances.
(e) Totals may not exactly match the sum of components due to rounding.
There are many ways to describe the income distribution of individuals across Australia. A selection of income indicators is presented below as well as in the data cubes attached to this publication. It is important to note that the story of income distribution provided may be imperfect for those regions with higher levels of low income earners, superannuated retirees or people living on pension benefits; these people may not be required to report part of their income or lodge tax returns at all. Hence their details may be excluded from the estimates. While there are limitations in the data presented, the data is unique in providing small area data and indicative estimates of the way personal income is distributed across Australia. For more information, please see the Explanatory Notes.
Percentile ratios provide one way of describing the spread of incomes. For Australia in 2012–13, the personal income of individuals at the top of the 80th percentile was 4.80 times higher than that of individuals at the top of the 20th percentile. This statistic varied in size across the states and territories, for example from 3.84 in the Northern Territory to 4.99 in Western Australia.
Another perspective is provided by considering the income share held at the top of the income distribution. For Australia, the per cent of total income held by the top 1% of earners was 9.3%, while the income held by the top 5% of earners was 22.6% and the top 10% held 33.7%. This also varied across the states and territories, for example from 6.4% held in the top 1% in the ACT, to 10.5% held by the top 1% in NSW.
There are other useful summary indicators which can reflect the distribution of income across the population. For example, the Gini coefficient summarises the distribution of total income in a single number which lies between 0 and 1, where values closer to 1 represent greater inequality. For this publication, the Gini coefficient has been calculated on gross individual income for people who submitted a tax return; the resultant value for Australia in 2012-13 was 0.480. For the states and territories the Gini coefficient ranged from 0.411 in the Northern Territory, up to 0.491 in New South Wales. Readers should note that the coefficients included in this publication are indicative only; they should be interpreted with care due to under-coverage issues associated with some types of income, for example superannuation. Also Government pensions and allowances data are excluded. See the Explanatory Notes, paragraphs 15 and 16, for more details.
MEDIAN INCOME - STATE AND TERRITORY
Table 2. SELECTED INCOME DISTRIBUTION INDICATORS, Gross individual income
|Percentage share of total income received by persons in |
|Top 1%||% |
|Top 5%||% |
|Top 10%||% |
|Ratio of incomes at top of selected income percentiles |
|P80/P20 ||ratio |
|P80/P50 ||ratio |
| P20/P50 ||ratio |
|P10/P50 ||ratio |
|Gini coefficient ||no. |
The Australian Capital Territory recorded the highest median total income of all states and territories ($58,613), followed by the Northern Territory ($53,707) and Western Australia ($51,465).
In 2012-13, median employee incomes were highest in the Australian Capital Territory ($61,846), the Northern Territory ($54,445) and Western Australia ($53,446) and lowest in Tasmania ($43,524).
Median individual income from own unincorporated businesses was highest in Western Australia ($13,625), followed by the Northern Territory ($11,283) and New South Wales ($10,981) and lowest in Tasmania ($7,781).
Victoria recorded the highest median investment income ($437) in 2012-13, followed by New South Wales ($413) and South Australia ($348).
GREATER CAPITAL CITY AND REST OF STATE REGIONS
Generally, across all income types, the greater capital city regions recorded higher median incomes than the rest of each state or territory in 2012-13. Some exceptions to this pattern: slightly higher median investment income was recorded by the rest of Victoria, Queensland and South Australia; and other income (excluding pensions and allowances) was slightly higher in the rest of Northern Territory (outside of Greater Darwin).
Table 3. MEDIAN INCOME BY SOURCE (a) - Greater Capital City Statistical Areas and Rest of State/Territory, 2012-13
STATISTICAL AREA LEVEL 4
Own unincorporated business
Superannuation & annuities
Other Income (excl. Govt pensions & allowances)
Total income from all sources (excl. Govt pensions & allowances)
|New South Wales|
|Rest of NSW|
|Rest of Victoria|
|Rest of Queensland|
|Rest of South Australia|
|Rest of WA|
|Rest of Tasmania|
|Rest of NT|
|Australian Capital Territory (b)|
|Australia (c) |
|(a) Medians are calculated using non-zero income earners for each source of income. See Explanatory Notes paragraphs 20 and 31 for more information.|
(b) The whole of the Australian Capital Territory is one GCCSA.
(c) Australia totals include data for the Other Territories and regions unknown or not stated.
SA4 regions usually contain populations of between 100,000-300,000 people, tending towards the lower limit in rural and regional areas.
On the Australian mainland, the SA4s of Inner Perth, the Australian Capital Territory and Western Australia - Outback recorded the highest medians for total income, with values of $59,846, $58,675 and $57,471 respectively. In contrast, the SA4 regions of Mid North Coast and Coffs Harbour - Grafton (both in NSW) had the lowest medians at $34,586 and $35,014 respectively. The map below provides the Australia wide distributions for SA4s.
Map 1. MEDIAN TOTAL INCOME, by STATISTICAL AREA LEVEL 4, 2012-13
In median total income terms, the SA4s which most resembled Australia (which recorded a median total income of $44,940) were Ipswich in Queensland with a value of $45,009, followed by the Hunter Valley (excluding Newcastle) with $44,847.
From another perspective, two sets of SA4 regions resembled each other quite closely, namely the Riverina (with a median total income of $41,598) and the Central West ($41,594), both in NSW. Also similar in median total income terms were Cairns ($41,368) in Queensland and the Far West and Orana ($41,364) in NSW.