Income and assets Who counts as rich? ABS data holds the answer.
At what point does someone earn so much money, they can be described as rich? It’s one of the perennial debates in Australian politics, and it is poised to emerge again this year as Labor faces more questions over the future of the so-called stage three tax cuts.
The package includes an increase in the threshold for the top 45 per cent tax bracket from $180,000 to $200,000 (as well as a flat 30 per cent tax rate on all incomes between $45,000 and $200,000).
Proponents of stage three say it addresses bracket creep and improves the efficiency of the tax system, while opponents argue it overwhelmingly benefits high-income earners.
They also point to the significant hit to the budget: about $18 billion in the first year and $254 billion over 10 years.
Much of the debate has centred on whether someone who earns more than $180,000 is rich.
What is a ‘normal’ income in Australia? | The median Australian employee earned $65,000 in 2022, according to the Australian Bureau of Statistics.
Half of all employees earned less than this, while the other half earned more.
This figure captures both full-time and part-time workers. If we look at these groups separately, the data shows the median full-time worker earned $78,800 in 2022, while the median part-timer took home $32,400 last year.
Incomes have increased steadily over the past few decades amid growth in the Australian economy.
In 1975, the median employee earned $6448 a year. In the 47 years since then, wages have grown by about 5 per cent annually, taking median employee income to where it is today.
What about the top 1 per cent? | Each year the Australian Taxation Office publishes a breakdown of the taxable income distribution of workers.
It shows that in 2019-20, the most recent year for which data is available, the median taxpayer – the person at the 50th percentile – reported a taxable income between $60,326 and $61,264.
About half of all taxpayers earned less than this, while the other half earned more. If your taxable income was $131,501 or higher, then you earned more than 90 per cent of other Australians. If you earned more than $253,066, you took home more than 99 per cent of taxpayers.
About 5 per cent of taxpayers had incomes above $180,000.
The data, which covers the nation’s 11.39 million taxpayers, is presented in percentiles. For example, a person in the 10th percentile earns more than 10 per cent of workers, while a person in the 90th percentile earns more than 90 per cent of workers.
The data is also presented in the interactive table above.
What about gender? | The data also reveals the extent to which men dominate higher-paying jobs.
Of the 10 per cent of taxpayers who earned more than $131,501 in 2019-20, about 70 per cent were men. Women made up almost 60 per cent of the 20 per cent lowest income earners.
Which industries have the highest incomes? | Mining industry workers are Australia’s top earners, with the median employee in the sector taking home $54.90 an hour in 2022.
White-collar workers in the financial services and professional services industries were the next best-paid employees, earning about $50 an hour. Utilities workers and public servants rounded out the top five, with hourly rates just shy of $50.
Hospitality workers and retail workers earned the lowest salaries, recording median hourly rates of $25.80 and $28.80 an hour respectively.
How do the states compare? | The large differences between industry wages are a major driver of the income gaps we see between some states.
Residents of the ACT are the best-paid, with the median full-time worker earning a salary of $93,600 – thanks to the territory’s concentration of well-remunerated public sector workers. About 42 per cent of ACT workers are public sector employees, compared with 16 per cent nationally.
The next best-paid employees were in the Northern Territory, which also has a large public sector, and Western Australia, which is home to a well-paid mining-sector workforce. Tasmania is the poorest jurisdiction, with a median full-time salary of $70,200 – about $23,000 less than the ACT.
What’s a ‘normal’ amount of wealth? | While incomes are a key driver of financial comfort, wealth is arguably the more relevant measure of a person’s material wellbeing.
To get an idea of “normal”levels of wealth, we can look at annual estimates of household wealth, compiled by the ABS.
The data shows the median household had a net worth of $579,200 in 2019-20.
This figure captures the total value of assets such as real estate, shares and superannuation, and deducts a household’s liabilities such as credit card debt and home loans.
The data reveals huge differences between the wealthiest households and the poorest ones. In 2019-20, a household at the 90th percentile of the distribution – that is, a household that is richer than 90 per cent of households – had a net worth of $2.26 million.
A household at the 10th percentile was worth just $36,900, or 61 times less. How does Australia compare internationally? | While there are large disparities between the rich and the poor, Australia is still comfortably one of the world’s wealthiest countries.
Australian household incomes are the seventh-highest in the OECD – a club of mostly wealthy countries – while mean household net worth is third-highest, behind only the United States and Luxembourg.
The average household in the OECD has a yearly disposable income of $US30,490, compared with $US37,433 in Australia. Average household net wealth in the OECD sits at $US323,960, about $US200,000 below the wealth of the average Australian household.
