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5673.0.55.003 - Wage and Salary Earner Statistics for Small Areas, Time Series, 2003-04 to 2008-09 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 12/08/2011   
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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).


Graph 1 - NUMBER OF PERSONS WITH WAGE AND SALARY INCOME - Australia (a)
Graph showing series breaks in the number of persons with Wage and salary incomes
(a) Breaks in series between 2006-07 and 2007-08 and between 2007-08 and 2008-09


Graph 2 - TOTAL WAGE AND SALARY INCOME - Australia (a)
Graph showing series breaks in the total Wage and salary income
(a) Breaks in series between 2006-07 and 2007-08 and between 2007-08 and 2008-09


Graph 3 - AVERAGE WAGE AND SALARY INCOME - Australia (a)
Graph showing no series breaks in average Wage and salary income



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.

Table 1. AVERAGE ANNUAL WAGES AND SALARIES - By State and Territory, 2003-04 to 2008-09


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.

Map 1. GROWTH OF AVERAGE INCOME FROM WAGES AND SALARIES - By Statistical Local Areas, Australia, 2003-04 to 2008-09
Map showing average annual growth rates in Wages and salaries by SLA between 2003-04 and 2008-09


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.


Map 2. STATISTICAL LOCAL AREAS BY AVERAGE WAGE AND SALARY INCOME 2008-09 AND GROWTH RATES
Map showing variations in average annual growth rates in Wages and salaries and Average Wage and salary income



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.
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