- The average household pre-tax income in Australia currently sits at just under $110,000 per annum. Average household wealth also stands at $929,400.
- New analysis from McCrindle Research reveals the top 20% of households currently earn, on average, 11 times more than the bottom 20% of households.
- The top 20% of households by net wealth own, on average, 80 times more than the bottom 20% of households.
Australia is seen as a wealthy nation with the average household pre-tax income currently sitting just under $110,000 per annum, according to latest income and wealth data from the Australian Bureau of Statistics (ABS).
Combined with an average household wealth of $929,400, it suggests that Australian families are wealthy, at least from a broad perspective.
However, as seen in this excellent infographic from McCrindle Research, some Australian families are wealthier than others.
It shows annual household income by quintiles to show the spread of total earnings across the nation.
According to the group, of all the income earned by Australian households in the 2015/16 financial year, nearly half went to the top 20% of households.
The average income among these households stood at $261,872, around 11 times larger than the average income for the bottom 20% of households over the same period at $23,712.
“While the average household earns just under $110,000 per annum, the top 1 in 5 earn more than twice this and the bottom 1 in 5 take home around one-fifth of the average,” McCrindle says.
“This means that while the bottom fifth of households take home just 4% of all income, the top fifth get almost half at 48%.”
Despite the yawning gap between the top and bottom quintiles, McCridle says the level of income inequality in Australia — as measured using the Gini coefficient — has actually improved marginally from two years earlier, partially reversing the trend seen in recent decades.
“The Gini coefficient is a measure of income spread, with 0 being perfect equality and 1 being total inequality,” it said.
“The latest data shows that it is at 0.434, which is an improvement on what it was two years ago (0.446), but not as good as it was in the mid 1990s (0.417).”
Reflecting the broader deterioration over the past two decades, McCrindle says the average household gross income has increased 66% to $109,668, smaller than the improvement for the top 20% of households whose average pre-tax income rose by 75% to $261,872 over the same period.
That’s also contributed to a widening gap in household wealth levels, McCrindle calculates.
“Accumulated earnings are best represented by net wealth, and this is where the changing economic landscape of Australia is presented even more dramatically,” the group says.
“The wealth of the highest quintile households, on average, is 80 times that of the lowest quintile households.”
The data from McCrindle underscores the difficulty Australia’s government is having in passing their full package of income tax reforms through the Senate at present.
While aimed at returning more income to families, opponents argue that it will only lead to widening in inequality between wealthy and lower income households.
You can read more at McCrindle Research here.
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