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1386.0 - What's New in Regional Statistics, Jun 2009  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 24/06/2009   
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ESTIMATES OF PERSONAL INCOME FOR SMALL AREAS


Personal Income in Australia

States and Territories - Income

States and Territories - Persons by Income Source


Estimates of income using data from the Australian Taxation Office were released in Estimates of Personal Income for Small Areas (cat. no. 6524.0.55.002) in December 2008. This release contained data for each year from 2001-02 to 2005-06, and included estimates for Local Government Areas and Statistical Local Areas.

These data have been released on the regional boundaries that applied in each year, and so caution should be exercised in making comparisons between years for regions where boundaries have changed. The following provides a summary of the data for Australia and the states and territories.


Personal Income in Australia

From 2001-02 to 2005-06, Australia experienced significant economic prosperity. Gross Domestic Product (GDP) in current price terms rose by 31.5%, from $735,714 million in 2001-02 to $967,454 million in 2005-06 (Australian System of National Accounts, cat. no. 5204.0). The real net national disposable income per capita grew by 4.2% per year (Australian System of National Accounts, cat. no. 5204.0). Further, the average annual national unemployment rate dropped from 6.4% in 2001 to 5.0% in 2006 (Australian Social Trends, 2008, cat. no. 4102.0).

This national economic prosperity is also reflected in the growth of personal income during this period. The sources of personal income included in these data are Wages and salaries, Own unincorporated business (OUB), Investment, Superannuation and annuities and Other, however the data do not include income from Government pensions and allowances. Australia's average annual growth rate for each income source is presented in Table 1. Over the five year period, income from Investments had the highest growth rate (13.2%) followed by Superannuation and annuities (11.3%). However, growth in OUB income was by far the lowest at 2.7%.

Table 1. ESTIMATED PERSONAL INCOME, Average Annual Growth Rate, 2001-02 to 2005-06

Wages & Salaries
Own
Unincorporated
Business
Investment
Superannuation &
Annuity
Other Income (a)
Total Income (a)
%
%
%
%
%
%

6.9
2.7
13.2
11.3
11.0
7.3

(a) excluding Government Pensions & Allowances


Despite the strong growth rate in Investment income, income from Wages and salaries and OUB together accounted for over 86% of income in each year (Table 2).

Table 2. PROPORTION OF TOTAL INCOME BY INCOME SOURCE, 2001-02 to 2005-06

Wages & Salaries
Own Unincorporated
Business
Investment
Superannuation &
Annuity
Other Income (a)
%
%
%
%
%

2001-02
80.3
8.2
7.9
2.8
0.8
2002-03
80.1
7.8
8.6
2.8
0.8
2003-04
79.8
7.7
8.9
2.8
0.8
2004-05
79.5
7.3
9.4
3.0
0.9
2005-06
79.2
6.9
9.8
3.2
0.9

(a) excluding Government Pensions & Allowances

While these data show a gradual decline in the proportion of total income from both Wages and salaries and OUB, it is useful to look at the relationship between these two sources of income, as they can both be thought of as 'earned' income. That is, an individual earns income either from employment (for which they earn a wage or salary) or they earn an income from working in their OUB.

Individuals reporting OUB income are generally operating as sole traders or in partnerships. OUB income includes:
  • net income (or loss) from business
  • distributions from partnerships
  • distributions from trusts (primary production)
  • net personal services income

OUB income does not include persons in their own incorporated business who tend to pay themselves a salary, as their income is counted under Wage and salary income.

Table 3 shows that over the period 2001-02 to 2005-06 there was a gradual shift away from income from OUB (as a proportion of total 'earned' income) towards income from Wages and salaries.

Table 3. PROPORTIONAL CHANGE IN SELECTED INCOME SOURCES, 2001-02 to 2005-06

W&S Income
OUB Income
W&S + OUB
W&S
OUB
$m
$m
$m
%
%

2001-02
272,378.8
27,773.7
300,152.6
90.7
9.3
2002-03
289,389.0
28,053.2
317,442.2
91.2
8.8
2003-04
310,248.8
29,765.7
340,014.5
91.2
8.8
2004-05
333,399.4
30,481.5
363,880.9
91.6
8.4
2005-06
355,868.0
30,937.3
386,805.4
92.0
8.0


The following sections of this article explore income from Wages and salaries and OUB in more detail, including which states/territories have experienced growth in Wage and salary income, and where income from OUB has decreased. Queensland and Western Australia are shown to have had strong growth in both sources of income, while South Australia has experienced declining income from OUB.
States and Territories - Income

From 2001-02 to 2005-06 income from Wages and salaries increased in all states and territories (Table 4). However there was considerable variation in the amount of growth. For example, in the Northern Territory income from Wages and salaries rose by $816.2 million, compared to New South Wales ($25,448.9 million) where the largest growth was recorded.

Table 4. WAGE AND SALARY INCOME ($m), 2001-02 to 2005-06 (a)

2001-02
2002-03
2003-04
2004-05
2005-06
Change 2001-02
to 2005-06
$m
$m
$m
$m
$m
$m

New South Wales
97,288.1
102,488.8
109,329.6
116,531.4
122,737.1
25,448.9
Victoria
69,324.5
73,468.5
77,875.5
82,975.1
87,743.4
18,418.9
Queensland
46,924.1
50,632.5
55,323.2
60,399.7
66,144.4
19,220.3
South Australia
18,729.1
19,903.5
21,241.6
22,608.2
23,868.1
5,139.0
Western Australia
25,840.9
27,719.9
30,194.7
33,246.4
36,749.0
10,908.1
Tasmania
5,305.9
5,644.2
6,073.7
6,497.0
6,935.9
1,629.9
Northern Territory
2,788.4
2,901.4
3,088.9
3,405.4
3,604.6
816.2
Australian Capital Territory
6,114.3
6,524.4
7,000.4
7,624.2
7,988.0
1,873.7

(a) excludes Other Territories and unknown postcodes


In terms of the rate of growth, income in all states grew, with Western Australia (9.2%) and Queensland (9.0%) exhibiting the strongest growth during the period (Figure 1). Despite its large growth in actual dollar terms, New South Wales experienced the lowest average annual growth rate at 6.0%. The national average was 6.9%.

Figure 1. Personal Income from Wages and Salary, Average Annual Growth Rate, 2001-02 to 2005-06
Graph: Figure 1. Personal Income from Wages and Salary, Average Annual Growth Rate, 2001-02 to 2005-06


Table 5 shows changes in OUB income between 2001-02 and 2005-06 for each state and territory. Unlike in Wages and salaries, there was a decline in OUB in one state.

While OUB income was higher in 2005-06 than 2001-02 in all states and territories except South Australia, there was some year to year variation in several other states. In South Australia, OUB income fell during the period by -$398 million (Table 5).
Table 5. OWN UNINCORPORATED BUSINESS INCOME ($m), 2001-02 to 2005-06 (a)

2001-02
2002-03
2003-04
2004-05
2005-06
Change 2001-02
to 2005-06
$m
$m
$m
$m
$m
$m

New South Wales
9,244.7
9,315.9
9,961.6
9,989.3
10,021.2
776.5
Victoria
6,529.5
6,119.7
6,548.3
6,775.3
6,816.0
286.5
Queensland
4,945.5
5,096.5
5,684.5
5,988.3
6,305.7
1,360.2
South Australia
2,758.3
2,790.1
2,589.6
2,485.1
2,360.2
-398.0
Western Australia
3,145.8
3,532.3
3,713.3
3,937.4
4,139.4
993.6
Tasmania
624.7
636.8
681.4
706.1
664.5
39.9
Northern Territory
157.1
159.6
172.1
190.5
196.3
39.2
Australian Capital Territory
363.9
395.2
409.3
405.2
429.3
65.4

(a) excludes Other Territories and unknown postcodes


Figure 2 shows that the fastest growing states in OUB income were Queensland and Western Australia, with average annual growth rates of 6.3% and 7.1% respectively. In contrast, South Australia's growth rate was -3.8%.

Figure 2. Own Unincorporated Business Income, Average Annual Growth Rate, 2001-02 to 2005-06
Graph: Figure 2. Own Unincorporated Business Income, Average Annual Growth Rate, 2001-02 to 2005-06


States and Territories - Persons by Income Source

It has already been identified that there has been a shift in the proportion of income received from OUB to Wages and salaries. One of the advantages of these data are that we can examine the number of persons reporting each source of income. This can help us to determine if the shift is also evident in the labour force.

Table 6 shows that the states recording large increases in the value of Wage and salary income also had strong growth in the number of persons reporting income from Wages and salaries (Queensland 3.9% and Western Australia 3.5%).

Table 6. PERSONS REPORTING INCOME FROM WAGES AND SALARIES, 2001-02 to 2005-06 (a)

2001-02
2002-03
2003-04
2004-05
2005-06
Change 2001-02
to 2005-06
Average annual
growth rate
psns
psns
psns
psns
psns
psns
%

New South Wales
2,693,112
2,736,316
2,795,862
2,850,850
2,889,743
196,631
1.8
Victoria
2,051,940
2,097,823
2,136,804
2,184,505
2,230,569
178,629
2.1
Queensland
1,521,601
1,574,888
1,644,951
1,711,519
1,772,041
250,440
3.9
South Australia
612,747
625,354
638,050
651,329
663,196
50,449
2.0
Western Australia
796,977
816,887
845,608
878,270
913,953
116,976
3.5
Tasmania
184,575
189,164
195,235
201,578
205,904
21,329
2.8
Northern Territory
81,364
81,246
82,531
85,765
87,628
6,264
1.9
Australian Capital Territory
158,054
161,368
165,300
168,228
172,566
14,512
2.2

(a) excludes Other Territories and unknown postcodes


On the other hand, South Australia (which had a negative growth rate in OUB income) had a significant fall in the number of persons receiving income from OUB (Table 7).

Table 7. PERSONS REPORTING INCOME FROM OWN UNINCORPORATED BUSINESS,
2001-02 to 2005-06 (a)

2001-02
2002-03
2003-04
2004-05
2005-06
Change 2001-02
to 2005-06
Average annual
growth rate
psns
psns
psns
psns
psns
psns
%

New South Wales
437,535
439,079
448,657
444,188
440,839
3,304
0.2
Victoria
324,712
322,882
331,012
330,469
330,626
5,914
0.5
Queensland
271,475
273,920
283,396
284,205
283,100
11,625
1.1
South Australia
115,840
115,846
116,035
112,486
109,763
-6,077
-1.3
Western Australia
151,700
154,357
156,499
155,164
155,499
3,799
0.6
Tasmania
33,007
33,136
34,284
33,772
32,974
-33
0.0
Northern Territory
9,536
9,377
9,542
9,578
9,606
70
0.2
Australian Capital Territory
17,098
17,390
17,405
16,899
16,954
-144
-0.2

(a) excludes Other Territories and unknown postcodes

Data from the Labour Force Survey showed a loss of Own account workers (workers who operate their own economic enterprise and hire no employees) in South Australia during this period, most of whom were employed in the agriculture industry. The number of Own account workers in the agricultural industry in South Australia fell from 17,400 in 2001-02 to 9,500 in 2005-06 (Labour Force, Australia, Detailed, Quarterly, cat. no. 6291.0.55.003).


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