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The first part of this article will provide an overview of average Wage and salary incomes from 2003-04 to 2006-07, highlighting changes in average annual growth rates between and within Australian states and territories. This section of the article will also identify those regions with either high or low average Wage and salary income (based on 2006-07 data) that experienced high average annual growth rates in average Wages and salaries over time.
The second part of the article will focus specifically on the regions in one state of Australia to illustrate how the data in this release can be used to explore the characteristics of regions at the small area level. Western Australia has been chosen as the focus for this article because it had the highest average annual growth rate in average Wage and salary income of all Australian states and territories, for the period 2003-04 to 2006-07. This analysis includes a brief look at the occupation of Wage and salary earners at the regional level. This section will also draw on additional data about regions from a range of other sources (e.g. ABS Census of Population and Housing, 2006; and Estimated Resident Population data, from Regional Population Growth, Australia, cat. no. 3218.0). Regional summary data from a wide range of sources can be found in the National Regional Profile.
This article illustrates only a few ways 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 attached to this article.
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.
TRENDS IN AVERAGE WAGES AND SALARIES, 2003-04 TO 2006-07
On average, Australians earned $42,081 in Wages and salaries in 2006-07; up from $40,276 in the previous year. Over the period 2003-04 to 2006-07, the average annual growth rate in average Wage and salary income in Australia was 4.5%. This was during a period of strong economic growth, with Gross Domestic Product increasing at an average rate of 8.6% per annum over the four year period (Australian National Accounts: National Income, Expenditure and Product, Sep 2009, cat. no. 5206.0) and the seasonally adjusted unemployment rate falling from 5.5% in June 2004 to 4.3% in June 2007 (Labour Force, Australia, Jan 2010, cat. no. 6202.0).
Table 1 shows that the Australian Capital Territory recorded the highest average annual income in each year between 2003-04 and 2006-07.
Western Australia recorded the highest growth in average annual Wages and salaries between 2003-04 and 2006-07 (6.2%), followed by Queensland (5.4%), and the Australian Capital Territory (4.7%). The high growth rate for Western Australia resulted in that state having the third highest average annual Wage and salary income in 2006-07, moving up from fifth highest in 2003-04. For all 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.
Within each state and territory there is some variation in the rates of growth across small areas, such as Statistical Local Areas (SLAs). The degree of variation in rates of growth across these areas can be assessed statistically by looking at the standard deviation of growth rates of average annual wage and salary income. Standard deviation is a measure of the variation of data points around the mean of those data points. In a normally distributed set of data, approximately 68% of data points will fall within one standard deviation of the mean.
Table 2 shows that Western Australia (Balance of State) had an average annual growth rate in average Wage and salary income of 6.2%, with a standard deviation of 2.8%. That is, around 68% of Statistical Local Areas outside the capital city of Perth had an average annual growth rate of Wages and salaries between 3.4% and 9.0% (6.2% +/- 2.8%). While Perth SD also experienced a 6.2% average annual growth rate in Wages and salaries, variations in growth rates between SLAs in the capital were less pronounced than the rest of the state, as shown by a standard deviation of 0.9%
In contrast, Sydney SD, with an average annual growth rate of 4.2% - equal to that of New South Wales (Balance of State) - had a larger variation in growth rates as shown by a higher standard deviation (1.5%, compared with 0.8% for the rest of the state).
REGIONAL VARIATIONS IN AVERAGE ANNUAL GROWTH RATES
Which Statistical Local Areas experienced the highest growth in average Wage and Salary income between 2003-04 and 2006-07? Map 1 shows significant variations in average annual growth rates across Australia.
MAP 1. GROWTH OF AVERAGE INCOME FROM WAGES AND SALARIES, Statistical Local Areas, Australia, 2003-04 to 2006-07
The vast majority of SLAs with the highest average annual growth rate of average Wage and salary income between 2003-04 and 2006-07 were located in Western Australia and Queensland. In Western Australia, these included over twenty 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, Boddington and Dandaragan) and also the remote mining area of Ravensthorpe in the state's south east. 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 and Barcoo in the state's south-west). 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, whilst the SLA of Kojonup (in Western Australia's wheatbelt) experienced a 8.6% average annual increase in average Wage and salary income between 2003-04 and 2006-07, by the end of the period the average annual income in the area was just $29,552 (well below the national average of $42,081). 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. Table 3 presents a selection of SLAs that fall into each of these four categories. SLAs were grouped according to whether their average annual incomes in 2006-07 fell in the top or bottom 20% of SLAs and whether their average annual growth rate in average Wages and salaries was above or below the Australian rate of 4.5%.
High income/high growth regions included Mt Isa (C), in north-west Queensland. Mt Isa had an average income of $52,416 in 2006-07, and an average annual growth rate in average income of 7.5%.
Stonnington (C) - Malvern SLA, in Melbourne's south-east, is an example of a high income/low growth region, with an average annual income of $59,188 in 2006-07, but an average annual growth rate of just 3.9%.
Some regions recorded high growth rates, while remaining low income regions. Denmark SLA (in Western Australia's south-west), is an example of a low income/high growth region, recording an income of $29,822 in 2006-07 following an average annual growth rate of 7.4%.
Other regions recorded both low income and low growth rates in this period. For example, Loddon - North (in north-west Victoria) was a low income/low growth region, with an average income of $25,800 in 2006-07 and an average annual growth rate of 2.9%.
Map 2 shows the geographical distribution of all SLAs in Australia according to the four income/growth categories in Table 3. Regions with high average annual incomes and high average annual growth rates include SLAs in 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: the Far North and central Queensland; SLAs north-west and south-west of Perth; SLAs in western Victoria; parts of the Murray-Darling region of New South Wales; and SLAs in the mid-north and west coast of South Australia.
WESTERN AUSTRALIA: A REGIONAL ANALYSIS
As shown in this article, Western Australia recorded the highest growth in average annual Wage and salary income of all states and territories between 2003-04 and 2006-07. Also during this period:
In this section, variations in average annual growth rates will be explored in greater detail at the small area level, specifically in relation to Statistical Divisions (SDs) and Statistical Local Areas (SLAs) in Western Australia.
Table 4 shows that average annual growth rates between 2003-04 and 2006-07 were relatively high for all regions in Western Australia, ranging from 5.8% for South Eastern SD (a vast, mostly desert or semi-desert region incorporating mining centres such as Kalgoorlie and the coastal port of Esperance) to 6.6% for the SD of Midlands (traditionally an agricultural region that is becoming increasingly attractive for people seeking a rural lifestyle with close proximity to Perth).
However, there were substantial variations in growth rates within SDs, as shown by the standard deviations for each region. The South Eastern SD recorded the greatest variation in average annual growth rates: from 2.9% for the SLA of Menzies (a former gold mining area) to 24.2% for Ravensthorpe, where the establishment of a nickel mine in 2005 coincided with a significant increase in average annual income from Wages and salaries (from $25,999 in 2003-04 to $49,083 in 2006-07).
Map 3 shows variations in average annual growth rates between SLAs in Western Australia. Regions that recorded average annual growth rates above 8% between 2003-04 and 2006-07 included: the SLAs of Dandaragan, Irwin, Yalgoo and Murchison north of Perth; the SLAs of Boddington, Wandering, Cuballing and Kojonup in the state's south-east; and Mosman Park SLA in Perth.
Map 3. GROWTH AND AVERAGE INCOME FROM WAGES AND SALARIES, Statistical Local Areas, Western Australia, 2003-04 to 2006-07
To demonstrate how these data can be used to further explore regional variations in Wage and salary income, this article will now focus on the Statistical Division of South West. This region includes major urban centres such as Mandurah and Bunbury, and has a diverse economic base, incorporating a wide range of agricultural, mining, processing, manufacturing, tourist and service activities.
Table 5 shows that, in 2006-07, average annual incomes in the South West SD ranged from $31,424 in the SLA of Manjimup (comprising a national park/state forest, timber mills and an extensive fruit and vegetable industry) to $49,064 in Boddington SLA (a 90 minute drive from Perth, with a strong agricultural base, an increasing number of lifestyle/hobby farms and - most recently - expansion of gold mining activity in the region). Boddington also recorded the highest average annual growth rate in average Wage and salary income - 9.2% - in the South West SD.
This article is accompanied by a range of data on age, sex, occupation and income for those deriving income from Wages and salaries for the years 2003-04 to 2006-07. These data can be used to explore, for example, variations across different occupational and income groups at the regional level.
Figure 1 compares the proportion of Wage and salary earners in Australia, Western Australia and the South West SD that fall into the 2006 Census categories of Lower (less than $20,800 average annual income), Medium ($20,800-$52,000) and Higher (over $52,000) Incomes (A Picture of the Nation: the Statistician's Report on the 2006 Census, 2006, cat. no. 2070.0) (Note: the Higher Income category has been further divided into those earning average annual incomes above and below $83,200). For Australia, Western Australia and South West SD, the proportion of those in the lower and medium income groups fell between 2003-04 and 2006-07. Over the same period, the proportion of Wage and salary earners in the higher (including very high) income brackets has increased. This has particularly been the case for those earning more than $83,200; the proportion of Wage and salary earners in this category increased from 5.6% in 2003-04 to 10.6% in 2006-07 for Western Australia, and from 4.2% to 10.1% for the South West SD.
Figure 1. Proportion of Wage and salary earners by Income range: Australia, Western Australia and South West Statistical Division, 2003-04 and 2006-07
Table 6 shows that this increase in the number of high income earners has occurred in all Statistical Subdivisions (SSDs) within the South West SD, with the largest increases in the SSDs of Mandurah and Preston.
Table 7 presents similar data at the Statistical Local Area (SLA) level, and shows the proportion of Wage and salary earners with average annual incomes over $83,200 has increased in all SLAs within the Mandurah and Preston SSDs. This article will focus on the more populated SLAs of Mandurah and Collie.
Both SLAs of Mandurah and Collie experienced a significant increase in the number and proportion of Wage and salary earners with average annual incomes greater than $83,200 between 2003-04 and 2006-07. Almost 20% of Wage and salary earners in Collie and 13% of those in Mandurah now fall into this income group. Mandurah is a rapidly growing coastal city located 74km south of Perth. It is the most populous centre in the South West region, with an estimated resident population of 61,624 in June 2007; an increase of 3.9 per cent from the previous year (Regional Population Growth, Australia, 2007-08, cat. no. 3218.0). The area features a marina and man-made canals, and serves as a commuter town for people working at the Aluminium Refinery in Pinjarra, in the heavy industry at Kwinana, and those making the daily commute north to Perth. Collie is home to two major coal mining companies, a power station and bauxite refinery. The area is currently undergoing further industrial expansion, although during the period 2004-07, Collie's population was relatively stable.
A closer examination of the incomes earned by these occupational groups (and how they have changed over time) reveal significant regional variations.
Table 8 shows that, when compared to Wage and salary earners across Australia, a higher proportion of people employed as Intermediate production and transport workers and Tradespersons in Western Australia receive average annual incomes greater than $83,200. The proportion was even higher for Wage and salary earners living in the South West SD, and especially in the SLAs of Mandurah and Collie. For example, almost 44% of people employed as Intermediate Production and Transport workers in Collie earned more than $83,200 in Wages and salaries in 2006-07 (this increased from 22% in 2003-04). Over 34% of Tradespersons in Collie also fell into this group (up from 18% in 2003-04). Although the proportions are not as high, a similar pattern can be also detected in the SLA of Mandurah. This is likely indicative of the high Wages and salaries offered to those working in the mining and resource sectors in many regions of Western Australia during this period.
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