5204.0.55.011 - Australian National Accounts: Distribution of Household Income, Consumption and Wealth, 2003-04 to 2017-18  
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CHAPTER 2 - ANALYSIS AND COMMENTS: INCOME AND WEALTH QUINTILES, 2017-18

This chapter presents graphs and tables with accompanying text for the distributions of the Australian System of National Accounts (ASNA) household income, consumption and wealth estimates by household distributional indicators, equivalised income and wealth quintiles. This chapter uses the ASNA term 'total household' throughout the text, total household has an equivalent term in the ABS micro publications, which is 'all households'. Included in this chapter are ratios of the total value of the highest to the lowest quintile, the ratios are a measure of the spread of income, consumption and wealth across the population. The ratios are a summary indicator of inequality.


INCOME

Table 2.1 below presents the 2017-18 values of the ASNA total household income components that are distributed into equivalised income and wealth quintiles. The income graphs below are based on the detail distributional information published in electronic tables 1, 2 and 11.


TABLE 2.1 ASNA TOTAL HOUSEHOLD INCOME (EXCLUDING NPISH), 2017-18

Income
$m

Compensation of employees
865 325
Gross mixed income
157 527
Gross operating surplus - dwellings owned by persons
136 158
Property income receivable
174 758
Social Assistance benefits
131 314
Interest payable
70 558
Income tax payable
217 612
Social transfers in kind
278 577
Superannuation benefits received (memorandum item)
112 009
Gross disposable income
1 165 320
Adjusted disposable income
1 443 897


(a) Compensation of Employees

The total remuneration, in cash or in kind, payable by an enterprise to an employee in return for work done by the employee during the accounting period. It is further classified into two sub-components; wages and salaries; and employers' social contributions (payments by employers which are intended to secure for their employees the entitlement to social benefits, such as employer superannuation contributions).

COMPENSATION OF EMPLOYEES - Share of total, 2017-18
Graph shows COMPENSATION OF EMPLOYEES - Share of total, 2017-18

In 2017-18, total household compensation of employees (COE) was $865,325m. COE for households in the highest income and net worth quintile was 46% and 24% of total household COE, by comparison for households in the lowest income and net worth quintile it was 3% and 11% of total household COE. There was an increase in the share of total household COE by households in each income quintile from the lowest to the highest. The ratio of the values of the highest to lowest quintiles was 16.0 and 2.1 for income and net worth for COE.

(b) Gross Mixed Income

Gross mixed income (GMI) is the surplus or deficit accruing from production by unincorporated enterprises. It includes elements of both compensation of employees and operating surplus (returns on capital inputs).

GROSS MIXED INCOME - Share of total, 2017-18
Graph shows GROSS MIXED INCOME - Share of total, 2017-18


In 2017-18, total household gross mixed income (GMI) was $157,527m. GMI for households in the highest income and net worth quintile was 60% and 53% of total household GMI, by comparison for households in the lowest income and net worth quintile it was 4% and 7% of total household GMI. There was an increase in the share of total household GMI by households in each income and net worth quintile from the lowest to the highest. The ratio of the values of the highest to lowest quintiles was 17.3 and 7.1 for income and net worth for GMI.

(c) Gross Operating Surplus - Dwellings Owned by Persons

Dwelling "GOS" is the surplus resulting from a deduction of intermediate inputs from output. Output is the sum of actual and imputed rent on dwellings owned by households. Intermediate inputs are the goods and services consumed in the process of production (for example maintenance costs and body corporate fees). These inputs exclude property income payments such as interest.

GROSS OPERATING SURPLUS - DWELLINGS OWNED BY PERSONS - Share of total, 2017-18
Graph shows GROSS OPERATING SURPLUS - DWELLINGS OWNED BY PERSONS - Share of total, 2017-18


In 2017-18, total household gross operating surplus, dwellings owned by persons (GOS Dwellings) was $136,158m. GOS Dwellings for households in the highest income and net worth quintile was 36% and 41% of total household GOS Dwellings, by comparison for households in the lowest income and net worth quintiles it was 8% and 9% of total household GOS dwellings. There was an increase in the share of total household GOS Dwellings by households in each income and net worth quintile from the lowest to the highest. The ratio of the values of the highest to lowest quintiles was 4.7 and 4.6 for income and net worth for GOS Dwellings.

(d) Property Income Receivable

Property income receivable is the income receivable by the owners of a financial asset or a tangible non-produced asset in return for providing funds. Household property income mainly consists of dividend and interest income earned directly and through superannuation and insurance reserves.

PROPERTY INCOME RECEIVABLE - Share of total, 2017-18
Graph shows PROPERTY INCOME RECEIVABLE - Share of total, 2017-18


In 2017-18, total household property income was $174,758m. Property income for households in the highest income and net worth quintile was 53% and 63% of total household property income, by comparison for households in the lowest income and net worth quintile it was 5% and 3% of total household property income. There was an increase in the share of total household property income by households in each quintile from the lowest to the highest for both income and net worth quintiles, with the increase being particularly steep from the fourth to the highest quintile. The ratio of the value of the highest to lowest quintiles was 10.0 and 24.4 for income and net worth quintiles for property income receivable.

(e) Social Assistance Benefits

Includes current transfers to persons from general government in return for which no services are rendered or goods supplied. Principal components include: scholarships; maternity, sickness and unemployment benefits; family allowances; and widows', age, invalid and repatriation pensions.

SOCIAL ASSISTANCE BENEFITS - Share of total, 2017-18
Graph shows SOCIAL ASSISTANCE BENEFITS - Share of total, 2017-18


In 2017-18, total household social assistance benefits were $131,314m. Social assistance benefits by households in the lowest income and net worth quintile was 34% and 30% of total household social assistance benefits, by comparison for households in the highest income and net worth quintile it was 5% and 11% of total household social assistance benefits. There was a decrease in the share of total household social assistance benefits received by households in each income quintile from the lowest to the highest, the pattern for the net worth quintiles is not as clear. For example, households in the lowest net worth quintile received the highest share of total household social assistance benefits and households in the third net worth quintile received the next highest share of the total at 21%. The ratio of the value of the highest to lowest quintiles was 0.2 and 0.4 for income and net worth quintiles for social assistance benefits.

(f) Interest Payable

Household interest payable mainly consists of interest payable on loans on dwellings (mortgages).

INTEREST PAYABLE- Share of total, 2017-18
Graph shows INTEREST PAYABLE- Share of total, 2017-18

In 2017-18, total household interest payable was $70,558m. Household interest payable in the highest income and net worth quintile was 52% and 42% of total household interest payable, by comparison for households in the lowest income and net worth quintile it was 6% and 7% of total household interest payable. There was an increase in the share of total household interest payable by households in each income and net worth quintile from the lowest to the highest. The ratio of the value of the highest to lowest quintiles was 8.1 and 6.1 for income and net worth quintiles for interest payable.

(g) Income Tax Payable

INCOME TAX PAYABLE - Share of total, 2017-18
Graph shows INCOME TAX PAYABLE - Share of total, 2017-18


In 2017-18, total household income tax payable was $217,612m. Household income tax payable in the highest income and net worth quintile was 59% and 35% of total household income tax payable, by comparison for households in the lowest income and net worth quintile it was 1% and 8% of total household income tax payable. There was an increase in the share of total household income tax payable by households in each income quintile from the lowest to the highest, with the increase being particularly steep from the fourth to the highest quintile. The pattern is not as clear for the net worth quintiles, for example households in the second, third and fourth net worth quintile each pay 19%. The ratio of the value of the highest to lowest quintiles was 42.3 and 4.1 for income and net worth quintiles for income tax payable.

(h) Social Transfers in Kind

Social transfers in kind are individual goods and services provided to individual households by general government units and non-profit institutions either free or at prices that are not economically significant, examples are education and health services.

SOCIAL TRANSFERS IN KIND - Share of total, 2017-18
Graph shows SOCIAL TRANSFERS IN KIND - Share of total, 2017-18


In 2017-18, total household social transfers in kind (STiK) were $278,577m. STiK for households in the lowest income and net worth quintile was 26% and 23% of total household STiK, by comparison for households in the highest income and net worth quintile it was 14% and 16% of total household STiK. There was a decrease in the share of total household STiK by households in each income quintile from the lowest to the highest, the pattern for the net worth quintiles is not as clear. For example, households in the lowest net worth quintile received the highest share of total household STiK and households in the third net worth quintiles received the next highest share of the total at 21%. The ratio of the value of the highest to lowest quintile was 0.5 and 0.7 for income and net worth quintiles for social transfers in kind.

(i) Superannuation Benefits Received (memorandum item)

Superannuation benefits received are recorded as a memorandum item of the household income account. Superannuation benefits received in the ASNA are treated as financial transactions of households and are not recorded as income; instead they are recorded in the financial account and balance sheet.

SUPERANNUATION BENEFITS RECEIVED (Memorandum Item) - Share of total, 2017-18
Graph shows SUPERANNUATION BENEFITS RECEIVED (Memorandum Item) - Share of total, 2017-18



In 2017-18, total household superannuation benefits received was $112,009m. Households in the highest income and net worth quintile received 47% and 74% of total household superannuation benefits, by comparison households in the lowest income and net worth quintile received 3% and 2% of total household superannuation benefits. There was an increase in the share of total household superannuation benefits received by households in each quintile from the lowest to the highest for both income and net worth quintiles, with the increase being particularly steep from the fourth to the highest net worth quintiles. The ratio of the value of the highest to lowest quintiles was 15.5 and 45.7 for income and net worth quintiles for superannuation benefits received.

(j) Disposable Income

GROSS & ADJUSTED DISPOSABLE INCOME - Share of total, income quintiles, 2017-18
Graph shows GROSS & ADJUSTED DISPOSABLE INCOME - Share of total, income quintiles, 2017-18


In 2017-18, total household gross and adjustable disposable income was $1,165,320m and $1,443,897m respectively. The difference between the two income measures is that adjustable disposable income includes social transfers in kind and gross disposable income excludes these transfers. Gross and adjustable disposable income in the highest income quintile was 41% and 35% of total household gross and adjustable disposable income respectively, by comparison for households in the lowest income quintile it was 8% and 11% of the total household gross and adjustable disposable income. There was an increase in the share of total household gross and adjustable disposable income by households in each income quintile from the lowest to the highest quintiles. The ratio of the value of the highest to lowest income quintiles was 5.4 and 3.2 for gross and adjustable disposable income respectively.

GROSS & ADJUSTED DISPOSABLE INCOME - Share of total, net worth quintiles, 2017-18
Graph shows GROSS & ADJUSTED DISPOSABLE INCOME - Share of total, net worth quintiles, 2017-18


Gross and adjusted disposable income in the highest net worth quintile was 31% and 28% of total household gross and adjusted disposable income respectively, by comparison for households in the lowest net worth quintile it was 12% and 14% of the total household gross and adjusted disposable income. There was an increase in the share of total household gross and adjusted disposable income by households from the lowest to the highest quintile, with the growth remaining constant in the second, third and fourth quintile. The ratio of the value of the highest to lowest net worth quintile was 2.5 and 2.0 for gross and adjusted disposable income respectively.

(k) Impact of the redistribution by government and non-profit institution serving household (NPISH)

Table 2.2 and the graph below presents total household gross disposable income (GDI) and the share of total household GDI in a step by step format, each step includes an income receivable or payable component that illustrate the impact of the redistribution of income by government and NPISH. The graphs below are based on the detail information published in electronic table 11.
  • Step 1: gross disposable income (GDI) before the addition of income from government social assistance benefits (cash) and the payment of income tax;
  • Step 2: step 1 GDI less income taxes payable;
  • Step 3: step 2 GDI plus income from government social assistance benefits (cash);
  • Step 4: step 3 GDI plus government and NPISH payments to household from social transfers in kind (STiK).

TABLE 2.2 ASNA TOTAL HOUSEHOLD GROSS DISPOSABLE INCOME, IMPACT OF GOVERNMENT AND NPISH REDISTRIBUTION - 2017-18

Steps
$m

GDI (before tax and social assistance benefits)
1 251 618
GDI (after tax and before social assistance benefits)
1 034 006
GDI (after tax and social assistance benefits)
1 165 320
GDI (after tax, social assistance benefits and social transfers in kind)
1 443 897


IMPACT OF REDISTRIBUTION MEASURES BY GOVERNMENT AND NPISH - Share of total household income, income quintiles, 2017-18
Graph shows IMPACT OF REDISTRIBUTION MEASURES BY GOVERNMENT AND NPISH - Share of total household income, income quintiles, 2017-18


For households in the lowest, second and third income quintiles the share of total household income increased with each step. For households in the fourth income quintile, the share of total household income increased by step 2 (payment of income taxes), and declined in step 3 and 4 (transfer payments in cash and kind). For households in the highest income quintile, the share of total household income declined in each step.

IMPACT OF REDISTRIBUTION MEASURES BY GOVERNMENT AND NPISH - Share of total household income, net worth quintiles, 2017-18
Graph shows IMPACT OF REDISTRIBUTION MEASURES BY GOVERNMENT AND NPISH - Share of total household income, net worth quintiles, 2017-18


For households in the lowest net worth quintile, the share of total household income increased with each step. For households in the highest net worth quintile, the share of total household income declined in each step. For households in the fourth net worth quintile, the redistributive measures do not change the share of total household income, while households in the second and third net worth quintile, marginally increase their share of household income by step 4.


CONSUMPTION AND SAVING

Table 2.3 below presents the 2017-18 values of the ASNA income and consumption components, and gross saving, by income and net worth quintiles, to assist the interpretability of the equivalised income and net worth quintile graphs presented below. The consumption and gross saving graphs below are based on the detail distributional information published in electronic tables 1, 2 and 5

TABLE 2.3 ASNA HOUSEHOLD INCOME AND CONSUMPTION (EXCLUDING NPISH) - 2017-18

Income and Consumption, $m
Lowest
Second
Third
Fourth
Highest
Total

Income quintiles
Gross disposable income
86 832
145 862
200 212
260 607
471 808
1 165 320
Household final consumption expenditure
118 774
140 270
178 561
218 219
332 391
988 215
Health
8 563
7 365
10 919
10 009
16 985
53 841
Social transfers in kind
71 108
67 592
56 615
45 310
37 953
278 577
Health
26 060
29 970
25 983
22 749
21 511
126 274
Adjusted disposable income
157 939
213 454
256 826
305 917
509 761
1 443 897
Gross saving
-31 942
5 592
21 650
42 388
139 417
177 105
Net worth quintiles
Gross disposable income
142 903
217 072
218 956
224 418
361 971
1 165 320
Household final consumption expenditure
123 695
172 149
185 739
207 678
298 956
988 215
Health
5 594
9 491
9 025
12 557
17 174
53 841
Social transfers in kind
65 108
56 904
58 167
52 621
45 776
278 577
Health
21 165
22 444
27 254
27 880
27 530
126 274
Adjusted disposable income
208 011
273 977
277 123
277 039
407 748
1 443 897
Gross saving
19 208
44 924
33 217
16 741
63 016
177 105


(a) Consumption

FINAL CONSUMPTION EXPENDITURE - Share of total, 2017-18
Graph shows FINAL CONSUMPTION EXPENDITURE - Share of total, 2017-18


In 2017-18, total household final consumption expenditure (HFCE) was $988,215m. HFCE for households in the highest income and net worth quintile was 34% and 30% of total HFCE, by comparison for households in the lowest income and net worth quintile it was 12% and 13% of total HFCE. There was an increase in the share of total HFCE by households in each quintile from the lowest to the highest for both income and net worth quintiles. The ratio of the value of the highest to lowest quintiles was 2.8 and 2.4 for income and net worth quintiles for HFCE.


SELECTED FINAL CONSUMPTION EXPENDITURE - Share of gross disposable income, 2017-18
Graph shows SELECTED FINAL CONSUMPTION EXPENDITURE - Share of gross disposable income, 2017-18


In 2017-18, gross disposable income (GDI) of households in the lowest and highest income quintile was $86,832m and $471,808m respectively. Households in the lowest income quintile consumed approximately 63% or $54,968m of their GDI on key expenditure components, while households in the highest income quintile consumed 27% or $129,175m, of their GDI on the same key expenditure components. The key expenditure components included: rent and other dwelling services, 31% and 15%, food 18% and 5%, and transport 14% and 8%, respectively, for the lowest and highest income quintiles.


HEALTH CONSUMPTION - Share of adjusted disposable income, income quintiles, 2017-18
Graph shows HEALTH CONSUMPTION - Share of adjusted disposable income, income quintiles, 2017-18


In 2017-18, adjusted disposable income (ADI) of households in the lowest and highest income quintile was $157,939m and $509,761m respectively. Households in the lowest income quintile consumed 22% of their ADI in health services, of this 5% was in direct payments and 17% in transfers in kind. In comparison, households in the highest income quintile consumed 8% of their ADI in health services, of this 3% was in direct payments and 4% in transfers in kind. There was a decrease in the consumption of health plus STiK health as a share of ADI by households in each income quintile from the lowest to the highest.

HEALTH CONSUMPTION - Share of adjusted disposable income, net worth quintiles, 2017-18
Graph shows HEALTH CONSUMPTION - Share of adjusted disposable income, net worth quintiles, 2017-18


In 2017-18, adjusted disposable income (ADI) of households in the lowest and highest net worth quintile was $208,011m and $407,748m respectively. Households in the lowest net worth quintile consumed 13% of their ADI in health services, of this 3% was in direct payments and 10% in transfers in kind. In comparison, households in the highest net worth quintile consumed 11% of their ADI in health services, of this 4% was in direct payments and 7% in transfers in kind. The pattern on health services consumption in the net worth quintiles is not clear, for example households in the fourth net worth quintile consumed largest share of health plus STiK health, 15% of ADI, followed by households in the lowest and third net worth quintiles consuming equal proportions at 13% of ADI.

(b) Gross Saving

GROSS SAVING- Percentage share of total, 2017-18
Graph shows GROSS SAVING- Percentage share of total, 2017-18


In 2017-18, total household gross saving was $177,105m. Gross saving for households in the highest income and net worth quintile was 79% and 36% of total household gross saving. The share of the aggregate of households in the second, third and fourth income quintiles was 39% of total household gross saving, in terms of net worth, the aggregate of households in the second, third and fourth quintiles saved 54% of total household gross saving. By comparison, households in the lowest income quintile were dis-savers, with -18% of total household gross saving, and households in the lowest net worth quintile saved 11% of total household gross saving.


WEALTH

Table 2.4 below presents the 2017-18 values of the ASNA total household wealth components that are distributed into equivalised income and wealth quintiles. The wealth graphs below are based on the detail distributional information published in electronic tables 1 and 2.

TABLE 2.4 ASNA TOTAL HOUSEHOLD WEALTH (EXCLUDING NPISH) - 2017-18

Wealth
$m

Dwellings and residential land
6 922 044
Financial assets
5 154 688
Currency and deposits
1 079 930
Shares and other equity
965 911
Superannuation and insurance reserves
3 000 454
Loan liabilities
2 217 061
Net Worth
10 300 060


(a) Dwellings and Residential Land

DWELLINGS & RESIDENTIAL LAND - Share of total, 2017-18
Graph shows DWELLINGS & RESIDENTIAL LAND - Share of total, 2017-18


In 2017-18, the value of total household dwellings and residential land was $6,922,044m. The share of total household dwellings and residential land held by households in the highest income and net worth quintile was 40% and 48%, by comparison 9% and 1% of total household dwellings and residential land was held by households in the lowest income and net worth quintile. There was an increase in the share of total household dwellings and residential land held by households in each quintile from the lowest to the highest for both income and net worth quintiles. The ratio of the value of the highest to lowest quintiles was 4.6 for income quintiles and 55.3 for net worth quintiles for dwellings and residential land.

(b) Financial Assets- Currency and Deposits, Shares and Other Equity, and Superannuation and Insurance Reserves


FINANCIAL ASSETS - Share of total, income quintiles, 2017-18
Graph shows FINANCIAL ASSETS - Share of total, income quintiles, 2017-18


FINANCIAL ASSETS - Share of total, net worth quintiles, 2017-18
Graph shows FINANCIAL ASSETS - Share of total, net worth quintiles, 2017-18



In 2017-18, total financial assets held by households were, currency and deposits ($1,079,930m), shares and other equity was ($965,911m), and superannuation and insurance reserve ($3,000,454m). These financial assets accounted for 98% of total household financial assets. Households in the highest income and net worth quintile held 39% and 57% of total household currency and deposits, 65% and 86% of total household shares and other equity, and 49% and 58% of total household superannuation and insurance reserves, respectively. Households in the lowest income and net worth quintile held 9% and 3% of total household currency and deposits, 5% and 1% of total household shares and other equity, and 5% and 2% of total household superannuation and insurance reserves, respectively. The ratio of the value of the highest to lowest quintiles was 7.8 for income quintiles and 30.0 for net worth quintiles for total financial assets.

(c) Liabilities - Loans
LIABILITIES - LOANS - Share of total, 2017-18
Graph shows LIABILITIES - LOANS - Share of total, 2017-18


In 2017-18, total household loan liabilities was $2,217,061m. Loan liabilities of households in the highest income and net worth quintile was 41% and 27% of total household loan liabilities, by comparison loan liabilities of households in the lowest income and net worth quintile was 9% and 5% of total household loan liabilities. The ratio of the value of the highest to lowest quintiles was 4.5 for income quintiles and 5.1 for net worth quintiles for loan liabilities.

(d) Net Worth
NET WORTH - Share of total, 2017-18
Graph shows NET WORTH - Share of total, 2017-18


In 2017-18, total household net worth was $10,300,060m. Net worth for households in the highest income and net worth quintile was 44% and 61% of total household net worth, by comparison for households in the lowest income and net worth quintile it was 8% and 1% of total household net worth. There was an increase in the share of total household net worth by households in each quintile from the lowest to the highest for both income and net worth quintiles. The ratio of the value of the highest to lowest quintiles was 5.7 for income quintiles and 117.1 for net worth quintiles for net worth.