Income and wealth dynamics in Australia and the world Presented by Sean Innis Special Adviser Melbourne, 21 July 2017
The elephant chart Top 7% worldwide in 2008: includes 50% of Australians Change in real disposable income, 1988 – 2008 Poorer <<< Percentile of global income distribution >>> Richer Maximum unemployment benefit 2008 Australian incomes: Minimum full-time wage 2008 Average wage 2008 Source : Corlett (2016); PC estimates A global view 2
Income and poverty in the United States, 1989 High inequality/High poverty Low inequality/High poverty High inequality/Low poverty Low inequality/Low poverty No data Source : Mather and Jarosz (2014) A global view 3
Income and poverty in the United States, 2008-2012 High inequality/High poverty Low inequality/High poverty High inequality/Low poverty Low inequality/Low poverty No data Source : Mather and Jarosz (2014) A global view 4
Australia – gross income growth 6,000 3.5 Mean income per week (2013-14$) 3 5,000 Annual % growth rate 2.5 4,000 2 3,000 1.5 2,000 1 1,000 0.5 0 0 Lowest Second Third quintile Fourth quintile Highest quintile quintile quintile 1994 – 95 1997 – 98 2003-04 2009-10 2013-14 Growth rate (RHS) Source : ABS (2015) Australia: Income 5
Earnings and benefits 150 140 130 Index: 1997 = 100 120 110 100 90 80 Average weekly earnings Maximum standard pension rate Minimum wage rate Unemployment benefit Source : Various data from ABS, DSS and FWC Australia: Income 6
Income distribution – Australia PC Paper: Trends in the Distribution of Income in Australia (Greenville, Pobke and Rogers 2013) Australia: Income 7
Income distribution – United States United States: Income 8
Distributions of income and wealth, by quintile Survey of Income and Housing, 2013-14 Equivalised disposable household income Net wealth Top share: 62.1% Top share: 40.8% Bottom share: 7.5% Bottom share: 0.9% Source : ABS (2015) Wealth movements 9
Income composition of wealth categories Survey of Income and Housing, 2013-14 60 % of respondents belonging to each wealth category 50 40 30 20 10 0 1st to 3rd income decile 4th to 7th income decile 8th to 10th income decile Low wealth Middle wealth High wealth Source : ABS (2015) Wealth movements 10
Wealth and weekly income by age, 2003-04 and 2013-14 Older households are wealthier than younger households and previous older cohorts Weekly income, $ Net wealth, $’000 PC Research Report: Housing Decisions of Older Australians (2015) Asset rich, income poor 11
Longevity in poverty % 100 80 60 40 20 0 0 – 1 1 – 2 2 – 3 3 – 4 4 – 5 5 – 6 6 – 7 7 – 8 8 – 9 9 – 10 10 – 11 11 – 12 year years years years years years years years years years years years Source : Azpitarte and Bodsworth (2015) Mobility and persistence 12
A daptive capacity of Australia’s regions Most adaptive (256) Above average (837) Below average (748) Least adaptive (244) No data Source : Productivity Commission based on ABS data Geography 13
Income and wealth dynamics in Australia and the world Presented by Sean Innis Special Adviser Melbourne, 21 July 2017
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