6530.0 - Household Expenditure Survey, Australia: Summary of Results, 2003-04 (Reissue)  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 15/02/2006   
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1 This publication presents a summary of the findings from the 2003-04 Household Expenditure Survey (HES). The survey collected detailed information about the expenditure, income, assets, liabilities and household characteristics of households resident in private dwellings throughout Australia. Appendix 1 outlines the full 2003-04 HES data release program and expected release dates.

2 The statistics in this publication present a broad overview of data items collected during the 2003-04 HES. Emphasis has been given to highlighting the differing household expenditure patterns and levels revealed when average weekly household expenditure is cross-classified by various household characteristics (e.g. income levels and sources, geographic location and family composition of the household) and reference person characteristics.

3 The 2003-04 Household Expenditure Survey and Survey of Income and Housing, Australia: User Guide (cat. no. 6503.0), expected to be released in March 2006, will assist users in evaluating and interpreting results from this survey.

4 The 2003-04 HES commenced field enumeration throughout Australia in July 2003. Field enumeration was completed in June 2004. Further information concerning the 2003-04 survey will be included in the 2003-04 User Guide. Previous Household Expenditure Surveys were conducted in 1974-75, 1975-76, 1984, 1988-89, 1993-94 and 1998-99.

Changes in this issue

5 The major change in the 2003-04 HES has been the collection of a more comprehensive range of household assets and liabilities to enable not only analysis of net worth and its components across households, but to analyse household expenditures in the context of their net worth. The survey has also been integrated with the 2003-04 Survey of Income and Housing (SIH). By aligning common data items, and ensuring that all data items required for the SIH were also collected in the HES, it has been possible to include the HES sample of 6,957 households as part of the SIH sample of 11,361 households.

6 Respondent burden is lower than if the two surveys were not integrated. Also, the resultant dataset is richer because HES and SIH results are more comparable than previously. This improvement is particularly important when considering the comprehensive wealth data that was collected for the first time as part of the 2003-04 SIH.

7 Although the HES and the SIH are integrated, the estimates for common items published in both this publication and the SIH publication Household Income and Income Distribution, Australia, 2003-04 (cat. no. 6523.0) are unlikely to have exactly the same values, unless calibrated to do so (see below). The estimates in this publication are taken only from the HES subsample. They are therefore subject to greater sampling variability than the full SIH estimates, but have been included here because it is considered that they are more appropriate for comparisons with the expenditure data items, which are only available for the HES sub-sample.

8 Results from the 2003-04 HES also included:

  • an expanded range of questions to collect details about income - in particular, information is collected about expected income in the current financial year from own unincorporated business and investments, and therefore current period estimates for these components of income no longer depend on data collected with respect to the previous financial year
  • calibration of the sample weights to a revised set of independent demographic benchmarks plus calibration to SIH estimates of tenure type and SIH estimates of household income by state and territory and broad source of income - see Survey Methodology below
  • household net worth data in most tables, and the introduction of a new table showing expenditure by net worth quintile
  • equivalised disposable household income as an additional indicator of a household's relative wellbeing when compared to other households of different size and composition - see Concepts and Definitions below
  • the replacement of the data item "household composition" with the data item "family composition of household", which better meets user requirements for the treatment of households with dependent children
  • the replacement of the household characteristic "source of income" with "principal source of household income"
  • tables showing expenditure on each of the broad expenditure groups as a proportion of total goods and services expenditure
  • the restructure of the tables so that they closely resemble the tables in Household Income and Income Distribution, Australia, 2003-04 (cat. no. 6523.0), thereby facilitating comparison between the two datasets
  • a small number of additional commodities, such as set top boxes.

9 The redefinition of some HES income items so that they are aligned with the corresponding SIH data items results in some loss of comparability between 1998-99 and 2003-04 HES data. The main data items affected are:
  • income from wages and salaries no longer includes income from bonuses (including leave loading); in 2003-04 these bonuses averaged $13.55 per week per household
  • income no longer includes the value of selected goods and services provided free or at reduced cost by employers to employees for their own private use or goods and services obtained from a person's own unincorporated business (in the 1998-99 HES, the value of incidental items such as food and motor vehicle fuel reported in the diaries were included); in 2003-04 the value of such goods and services averaged $1.30 per week per household
  • income no longer includes the income of children aged under 15 years; this income averaged $0.30 per week per household in 2003-04
  • income tax liability estimates are now derived only using data items available in the SIH.


10 The concepts and definitions relating to income, expenditure, net worth and households are described in the following section. Other definitions are included in the glossary.


11 The household is the basic unit of analysis in the HES. It is defined as a group of related or unrelated people who usually live in the same dwelling and make common provision for food and other essentials of living; or a lone person who makes provision for his or her own food and other essentials of living without combining with any other person.

12 Households therefore have the following characteristics:

  • they may consist of one or more person(s) or groups of persons such as families
  • they must live wholly within one physical dwelling. A group of people who make common provision for living essentials but are living in two separate dwellings are considered to be two separate households.

13 The household is adopted as the basic unit of analysis because it is assumed that sharing of the use of goods and services occurs at this level. If smaller units, say persons, are adopted, then it is difficult to know how to attribute to individual household members the use of shared items such as food, accommodation and household goods.


14 The HES aggregate estimates of expenditure on goods and services refer to:

  • the cost of acquiring goods and services - the cost of those goods and services acquired during the reference period regardless of whether the household paid for or consumed them during the period
  • the cost of goods and services used for private purposes - costs associated with investments and business were excluded from estimates of expenditure
  • net or out-of-pocket expenditure - refunds and reimbursements (such as Medicare refunds, factory rebates, trade-ins and reimbursements from employers) were deducted from expenditure
  • expenditure during and prior to the 2003-04 financial year - most types of expenditure relate to purchases recorded in a fortnightly diary at some point within the 2003-04 financial year but less frequent and often large expenditures were collected on a 'recall' basis: for those items, households were asked to recall expenditures over a period which may have extended back before 2003-04, ranging from the last payment made (e.g. for utilities bills) to any purchase made in the last three years (e.g. for house purchases)
  • some expenditure in-kind - items provided free or at a reduced cost by employers to employees for their own private use or withdrawn from own business for household consumption are regarded as expenditure in-kind; only incidental items of expenditure in-kind such as food and motor vehicle fuel reported in the diaries have been included in aggregate expenditure, averaging $1.30 per week per household; however other expenditure in-kind items such as provision of vehicles, housing and assistance with telephone calls were collected and are available separately if required.

15 Estimates of selected other payments (income tax, mortgage repayments (selected dwelling) and superannuation and life insurance) are also provided.

16 Estimates of average weekly expenditure do not refer to a given week. Average weekly expenditure was calculated by dividing expenditure by the number of weeks in the recall period or reporting period over which it was collected.

17 Expenditure was classified according to the Household Expenditure Classification. A copy of the classification will be included in 2003-04 Household Expenditure Survey and Survey of Income and Housing, Australia: User Guide (cat. no. 6503.0).


18 Household expenditure is compared to household income to help explain variations in expenditure levels and patterns and to identify groups of special interest (e.g. households with low incomes).

19 Income refers to regular and recurring cash receipts from employment, investments and transfers from government, private institutions and other households. Gross income is the sum of the income from all these sources before income tax and the Medicare levy have been deducted.

20 Sources from which income may be received include:

  • wages and salaries (whether from an employer or own corporate enterprise)
  • profit/loss from own unincorporated business (including partnerships)
  • investment income (interest, rent, dividends, royalties)
  • government pensions and allowances
  • private cash transfers (e.g. superannuation, regular workers' compensation, income from annuities, child support, and other transfers from other households).

21 Receipts which are excluded from income because they are not regular or recurring cash payments include the following:
  • income in kind including employee benefits such as the provision of a house or a car and employer contributions to pension and superannuation funds - however, income in-kind provided as part of a negotiated salary sacrifice arrangement can be regarded as cash or "near cash" income and included within the scope of income presented in this publication; it is estimated that about two thirds of salary sacrificed income is included in the 2003-04 HES estimate of gross income
  • capital transfers such as inheritances and legacies, maturity payments on life insurance policies, lump sum compensation for injuries or other damage
  • capital gains and losses.

22 Income is collected using a number of different reporting periods, such as the whole financial year for own unincorporated business and investment income, and the usual payment for a period close to the time of interview for wages and salaries, other sources of private income and government pensions and allowances. The income reported is divided by the number of weeks in the reporting period. Estimates of weekly income in this publication therefore do not refer to a given week within the reference period of the survey.

Equivalised disposable income

23 In most tables in this publication, gross household income (as described in the previous paragraphs) is presented along with expenditure estimates. However, when using income as an approximate means of ranking households according to the relative standards of living, it is more appropriate to use equivalised disposable income.

24 Disposable income is derived by deducting estimates of personal income tax and the Medicare levy from gross income. Disposable income better represents the economic resources available to meet the needs of households. Disposable income is then adjusted by the application of an equivalence scale to facilitate comparison of income levels between households of differing size and composition, reflecting the requirement of a larger household to have a higher level of income to achieve the same standard of living as a smaller household. Where disposable income is negative, it is set to zero equivalised disposable income. For more information on equivalised income see Household Income and Income Distribution, Australia, 2003-04 (cat. no. 6523.0).

25 While equivalised disposable household income generally provides a useful indicator of economic wellbeing, there are some circumstances which present particular difficulties. Some households report extremely low and even negative income in the survey, which places them well below the safety net of income support provided by social security pensions and allowances. Households may underreport their incomes in the survey at all income levels, including low income households. However, households can correctly report low levels of income if they incur losses in their unincorporated business or have negative returns from their other investments.

26 Studies of income and expenditure from the 1998-99 HES have shown that such households in the bottom income decile and with negative gross incomes tend to have expenditure levels that are comparable to those of households with higher income levels (and slightly above the average expenditures recorded for the fifth decile), indicating that these households have access to economic resources, such as wealth, or that the instance of low or negative income is temporary, perhaps reflecting business or investment start up. Other households in the bottom income decile in the 1998-99 HES had average incomes at about the level of the single pension rate, were predominantly single person households, the average age of the reference person was 53 years, and their principal source of income was largely government pensions and allowances. However, on average, these households also had expenditures above the average of the households in the second decile, which is not inconsistent with the use of assets to maintain a higher standard of living than implied by their incomes alone. Therefore it can be reasonably concluded that most are unlikely to be suffering extremely low levels of economic wellbeing, and certain income analysis may lead to inappropriate conclusions if such households are included. For this reason, tables presenting statistics classified by equivalised disposable household income quintile include a category comprising the second and third deciles, which can be used as an alternative to the lowest income quintile.

27 With the 2003-04 HES, analysis of the households in the bottom decile can be improved through the direct observation of the net worth of these households. On average, the household net worth in the bottom decile was $305,000, 17% above the average net worth of households in the second decile, reinforcing the view that the low relative incomes of these households are not a good indicator of their economic wellbeing. Those households in the bottom decile with zero or negative gross income had average household net worth of $446,000, and average equivalised household expenditures of $580 per week, above the average expenditure recorded in the sixth decile. The average equivalised household expenditure of all households in the bottom decile was $341 per week, 8% above the average expenditure in the second decile, again reinforcing the view that the economic wellbeing of the households in the bottom equivalised income decile are not well reflected in their income level.

Net worth

28 Net worth, often referred to as wealth, is the value of a household's assets less the value of its liabilities. Assets can take many forms including:

  • produced tangible fixed assets that are used repeatedly and for more than one year, such as dwellings and their contents, vehicles, and machinery and equipment used in businesses owned by households
  • intangible fixed assets such as computer software and artistic originals
  • business inventories of goods
  • non-produced assets such as land
  • financial assets such as bank deposits, shares, superannuation account balances, and the outstanding value of loans made to other households or businesses.

29 Liabilities are primarily the value of loans outstanding including:
  • credit card debt
  • mortgages
  • investment loans
  • borrowings from other households
  • debt on other loans such as personal loans to purchase vehicles, and HECS.

30 In the 2003-04 HES, some asset and liability data were collected on a net basis rather than collecting for each component listed above. In particular, if a survey respondent owned or part owned a business, they were asked how much they would receive if they sold their share of the business and paid off any outstanding debts.

31 While this publication provides some household net worth statistics, principally to aid expenditure analysis, a more comprehensive range of household asset and liability information will be released in March 2006 in a new publication Household Wealth and Wealth Distribution, 2003-04 (cat. no. 6554.0).

Difference between income and expenditure

32 The HES provides information about both the income and the expenditure of households, but it would be misleading to regard the difference between average weekly income and the sum of the items of average weekly expenditure as shown in the tables in this publication as a measure of savings.

33 First, to be properly understood, the concept of household saving needs to be articulated along with the concept of household wealth (assets and liabilities), and all forms of income and expenditure need to be measured and classified consistently with these concepts. The HES does not attempt to do this. For example, it does not provide information about capital gains or windfall gains such as inheritances. Rather, it focuses on the regular and recurring forms of income; expenditure on current consumption of goods and services; the major component of regular current transfers (income tax); and two major items of expenditure which can be regarded as investment ('mortgage repayments - principal (selected dwelling)' and 'superannuation and life insurance'). The two items of investment expenditure are included in the HES because they are a significant regular commitment of many households which have to be financed from regular income.

34 Second, there are significant timing differences between the different components of income and expenditure collected:

  • expenditure does not cover all current payments because expenditure was collected on an acquisitions basis
  • income does not cover all current receipts because it was collected on a usual receipts basis
  • expenditure does not cover a common reference period since expenditure estimates for different items refer to different periods
  • income does not cover a common reference period since income estimates for different sources of income refer to different periods; for example, income from wages and salaries relates to usual pay in a pay period, while income from investment and own unincorporated business relates to expected income in the current financial year.

35 HES income and expenditure estimates therefore do not balance for individual households or groups of households and the difference between income and expenditure cannot be considered to be a measure of saving.


Scope and coverage

36 The survey collects information by personal interview from usual residents of private dwellings in urban and rural areas of Australia, covering about 98% of the people living in Australia. Private dwellings are houses, flats, home units, caravans, garages, tents and other structures that were used as places of residence at the time of interview. Long-stay caravan parks are also included. These are distinct from non-private dwellings which include hotels, boarding schools, boarding houses and institutions. Residents of non-private dwellings are excluded.

37 The survey also excludes:

  • households which contain members of non-Australian defence forces stationed in Australia
  • households which contain diplomatic personnel of overseas governments
  • households in collection districts defined as very remote or Indigenous Communities - this has only a minor impact on aggregate estimates except in the Northern Territory where such households account for about 23% of the population.

Data collection

38 Information for each household was collected using:
  • a household level computer assisted interview questionnaire which collected information on household characteristics, expenditure common to all household members (e.g. health service payments), and irregular or infrequent expenditure (e.g. household appliances and holidays overseas)
  • an individual level computer assisted interview questionnaire which collected information on income and other personal characteristics from each usual resident aged 15 years and over
  • a personal diary in which usual residents aged 15 years and over recorded their expenditure over two weeks.

39 Sample copies of the above documents are available upon request and will be included in the User Guide 2003-04 to be released in March 2006.

Sample design

40 The sample was designed to produce reliable estimates for broad aggregates for households resident in private dwellings aggregated for Australia, for each state and for the capital cities in each state and territory. More detailed estimates should be used with caution, especially for Tasmania, the Northern Territory and the Australian Capital Territory (see Appendix 2).

41 The HES sample was designed in conjunction with the SIH. In the combined sample, some dwellings were selected to complete both the SIH questionnaire and the HES questionnaire, while other dwellings were selected to complete the SIH questionnaire only. Dwellings were selected through a stratified, multistage cluster design. Selected clusters were split such that approximately one third of households in the cluster received only the SIH questionnaire and two thirds of households in the cluster received both the SIH and HES questionnaires. Selections were distributed randomly across a twelve month enumeration period so that the survey results are representative of income and expenditure patterns across the year.

Non-responding households

42 Of the 9,753 households selected in the sample, 2,796 did not respond at all to the questionnaire, or did not respond adequately. Such households included:

  • households affected by death or illness of a household member
  • households in which the significant person(s) in the household did not respond because they could not be contacted, had language problems or refused to participate
  • households in which the significant person(s) did not respond to key questions or did not adequately complete an expenditure diary.

Partial response and Imputation

43 Some other households did not supply all the required information but supplied sufficient information to be retained in the sample. Such partial response occurs when:
  • income or other data in a questionnaire are missing from one or more non-significant person's records because they are unable or unwilling to provide the data
  • all key questions are answered by the significant person(s) but other questions are not answered
  • not every person aged 15 or over residing in the household responds but the significant person(s) provide answers to all key questions
  • diaries are not all fully completed, but sufficient information is provided.

44 In the first and second cases of partial response above, the data provided are retained and the missing data are imputed by replacing each missing value with a value reported by another person (referred to as the donor).

45 For the third type of partial response, the data for the persons who did respond are retained, and data for each missing person are provided by imputing data values equivalent to those of a fully responding person (donor).

46 For the fourth type of partial response, the diary information provided is used to represent the missing information. For example, if the first week of diary entries is provided but not the second week then the first week of expenditure is used to represent expenditure for the second week.

47 Donor records are selected by finding fully responding persons with matching information on various characteristics, such as state, sex, age, labour force status, income and expenditure, as the person with missing information. As far as possible, the imputed information is an appropriate proxy for the information that is missing. Depending on which values are to be imputed, donors are randomly chosen from the pool of individual records with complete information for the block of questions where the missing information occurs.

Final sample

48 The final sample on which estimates were based, is composed of households for which all necessary information is available. The information may have been wholly provided at the interview (fully-responding) or may have been completed through imputation for partially responding households. Of the selected dwellings, there were 9,753 in the scope of the survey, of which 6,957 (71%) were included as part of the final HES estimates. The final sample consists of those 6,957 households, comprising 13,748 persons aged 15 years old and over. The final sample includes 2,185 households which had at least one imputed value in either income, assets and liabilities or expenditure reported in the household questionnaire. Nearly 60% of these households, in fact, had only a single value missing and most of these were for superannuation assets or a minor source of income for the household.


Capital city
Balance of state

New South Wales
1 199
1 744
1 087
1 532
South Australia
Western Australia
Northern Territory
Australian Capital Territory
4 907
2 050
6 957

- nil or rounded to zero (including null cells)


49 Weighting is the process of adjusting results from a sample survey to infer results for the total in scope population whether that be persons, households or income units. To do this, a 'weight' is allocated to each sample unit e.g. a person, a household or an income unit. The weight is a value which indicates how many population units are represented by the sample unit. The first step in calculating weights for each unit is to assign an initial weight, which is the inverse of the probability of being selected in the survey. For example, if the probability of a household being selected in the survey was 1 in 600, then the household would have an initial weight of 600 (that is, it represents 600 households).

50 The initial weights are then calibrated to align with independent estimates of the population of interest, referred to as 'benchmarks'. Weights calibrated against population benchmarks ensure that the survey estimates conform to the independently estimated distribution of the population rather than to the distribution within the sample itself.

51 The HES survey was benchmarked to the in scope estimated resident population (ERP), the estimated number of households in the population, and to a number of income estimates produced from the SIH which was run over the same period.

52 Four types of benchmarks are used in the calibration of the final weights:

  • numbers of persons aged 15 and over
  • numbers of children under age 15
  • numbers of households
  • estimates of income and tenure type produced from the 2003-04 SIH.

53 Person benchmarks for persons aged 15 and over are estimates of the number of people in each state and territory by age and sex, the number of people in each state and the ACT by labour force status and the number of people in each state living in the capital city or the balance of the state.

54 A separate set of benchmarks is used for children under 15, since there are not individual person records for them in the survey. Information about children is recorded on household records, however, and benchmarks for the number of children aged 0-4 and aged 5-14 are used for each state and territory.

55 Numbers of households are calibrated to benchmarks for total Australia with respect to household composition (based on the number of adults (1, 2 or 3) and whether or not the household contains children).

56 The person and household benchmarks are based on estimates of numbers of persons and households in Australia. The benchmarks are adjusted to include persons and households residing in private dwellings only and therefore do not, and are not intended to, match estimates of the Australian resident population published in other ABS publications.

57 The fourth type of benchmark relates to estimates of tenure type and income produced from the 2003-04 SIH. The SIH estimates were included as benchmarks to increase the comparability between the surveys and to improve the reliability of income estimates produced from the HES survey. The following SIH estimates were used as benchmarks at the state level, in addition to the population benchmarks presented above:

  • total weekly household income from all sources
  • current weekly household income from own unincorporated business
  • current weekly household income from wages and salaries
  • current weekly household income from government pensions and allowances
  • household tenure type.

58 This means that estimates produced using the HES sample for these variables will be the same as the estimates produced using the SIH sample at the state level.


59 Estimates produced from the survey are usually in the form of averages (e.g. average weekly household expenditure on clothing and footwear), or counts (e.g. total number of households that own their dwelling). For counts of households, the estimate was obtained by summing the weights for the responding households in the required group (e.g. those households that own their dwelling).

60 Averages are obtained by adding the weighted household values, and then dividing by the estimated number of households. For example, average weekly expenditure on clothing and footwear by Victorian households is the weighted sum of the average weekly expenditure of each selected household in Victoria who reported such expenditure, divided by the estimated number of households in Victoria. Note that the denominator is the total number of households and not just the number of households which reported expenditure on a particular item.

61 Income tax payments were estimated for all households using taxation criteria for 2003-04 and the income and other characteristics of household members reported in the survey.

Reliability of estimates

62 The estimates provided in this publication are subject to two types of error, non-sampling and sampling error.

Non-sampling error

63 Non-sampling error can occur in any collection, whether the estimates are derived from a sample or from a complete collection such as a census. Sources of non-sampling error include non-response, errors in reporting by respondents or recording of answers by interviewers, and errors in coding and processing the data.

64 Non-sampling errors are difficult to quantify in any collection. However, every effort is made to reduce non-sampling error to a minimum by careful design and testing of the questionnaire, training of interviewers and data entry staff, and extensive editing and quality control procedures at all stages of data processing.

65 One of the main sources of non-sampling error is non-response by persons selected in the survey. Non-response occurs when people cannot or will not cooperate or cannot be contacted. Non-response can affect the reliability of results and can introduce a bias. The magnitude of any bias depends upon the level of non-response and the extent of the difference between the characteristics of those people who responded to the survey and those who did not.

66 The following methods were adopted to reduce the level and impact of non-response:

  • face-to-face interviews with respondents
  • the use of interviewers who could speak languages other than English, where necessary
  • follow-up of respondents if there was initially no response
  • imputation of missing values
  • ensuring that the weighted data is representative of the population (in terms of demographic characteristics) by aligning the estimates with population benchmarks.

Sampling error

67 The estimates are based on a sample of possible observations and are subject to sampling variability. The estimates may therefore differ from the figures that would have been produced if information had been collected for all households. A measure of the sampling error for a given estimate is provided by the standard error, which may be expressed as a percentage of the estimate (relative standard error). Further information on sampling error is given in Appendix 2.


68 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated: without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.


69 Information about the range of data to be made available from the 2003-04 HES is given in Appendix 1.


70 Users may also wish to refer to the following related ABS products:

      Household Income and Income Distribution, Australia, 2003-04, cat. no. 6523.0
      Household Income and Income Distribution, Australia - Detailed Tables, cat. no. 6523.0.55.001
      Housing Occupancy and Costs, Australia, cat. no. 4130.0.55.001
      Government Benefits, Taxes and Household Income, Australia, 1998-99, cat. no. 6537.0
      Household Wealth and Wealth Distribution, Australia, 2003-04, cat. no. 6554.0, a new publication to be released in March 2006
      Labour Force, Australia, cat. no. 6202.0 - issued monthly
      Average Weekly Earnings, Australia, cat. no. 6302.0
      Measuring Wellbeing: Frameworks for Australian Social Statistics, 2001, cat. no. 4160.0
      Measures of Australia's Progress, 2004, cat. no. 1370.0.