In 1999-00 there were approximately nine million income units living in private dwellings in Australia. While their mean gross weekly income was $726, the median (i.e. the midpoint when all units are ranked in ascending order of income) was considerably lower at $535. This difference reflects the typically asymmetric distribution of income where a large number in the population have relatively low incomes and a smaller number of units have relatively very high incomes.
The degree of inequality in the income distribution of all income units - as measured by each income quintile's share of income - remained almost unchanged between 1994-95 and 1999-00, with no significant change in the shares of total income received by the income quintile groups over the six years. The Gini-coefficient in 1999-00 was 0.448 and it was also not significantly different from that of the previous years.
PERCENTAGE INCOME SHARE FOR INCOME QUINTILES
|  |
| | | | | | |
| Gross weekly income quintile | 1994–95 | 1995–96 | 1996–97 | 1997–98 | 1999–00 | |
| |
| Lowest | 3.6 | 3.8 | 3.9 | 3.8 | 3.8 | |
| Second | 9.3 | 9.1 | 9.4 | 9.0 | 9.0 | |
| Third | 15.2 | 15.0 | 15.2 | 15.0 | 15.0 | |
| Fourth | 24.0 | 23.7 | 24.0 | 23.9 | 23.8 | |
| Highest | 47.9 | 48.3 | 47.5 | 48.3 | 48.5 | |
| All income units | 100 | 100 | 100 | 100 | 100 | |
Source: Income Distribution, Australia (6523.0). | |
The analysis above relates to gross income. Similar analysis can be done using disposable income (gross income after tax and the Medicare levy are deducted) or equivalent income. Equivalent income is disposable income adjusted to reflect the needs of different income units (for example, the needs of a couple with two dependent children are greater than say a single person income unit). The distribution of equivalent income data is more equal than for gross income. In 1999-2000, the Gini-coefficient for equivalent income was 0.346 compared with 0.448 for gross income.
Explanatory Notes
Three methods are commonly used to summarise the distribution of income between income units - frequency distributions, income shares and Gini-coefficients.
The Gini-coefficient is a single statistic which summarises the dispersion of income across the entire income distribution. The Gini-coefficient ranges between zero and one. It has a value of zero when income is distributed equally, that is, when all incomes are equal. It has a value of one when one income unit receives all the income
An income unit is one person or a group of related persons within a household, whose command over income is assumed to be shared. Income sharing is assumed to take place within married (registered or de facto) couples, and between parents and dependent children.
For the purpose of income distribution analysis, income is defined as regular and recurring cash receipts including moneys received from wages or salary, government pensions and allowances, and other regular receipts such as superannuation, workers' compensation, child support, scholarships, profit or loss from own business or partnership and property income.
Further Reading
Income Distribution, Australia (6523.0)
Details are presented on the distribution of income in Australia, and on the various characteristics of income units (married couple, one parent and one-person units), their composition, and the principal source of income, age and employment status of reference person.
A Provisional Framework for Household Income, Consumption, Saving and Wealth (6549.0)
A conceptual framework setting out the relationship between household income, consumption, saving and changes in net worth. Provides definitions and classifications of components. Shows links with other conceptual frameworks such as the national accounts.
Household Expenditure Survey, Australia: the Effects of Government Benefits and Taxes on Household Income (6537.0)
Describes and provides results from the study of the effects of government benefits and taxes on household income as revealed by the Household Expenditure Survey.
Print Page