Australia not as egalitarian as it once was: statistics on earning, spending, cost of living, and standard of living

Canberra, the capital of Australia, is the second most expensive Australian city, behind Sydney, but it has the highest standard of living. This is due to higher wages, on average. The other factor was the cost of accommodation.

A report by AMP Financial Services and the National Centre for Economic and Social Modelling at the University of Canberra revealed that Australian incomes had risen higher than the price of goods, and that the country is better off than 27 years ago (Canberra Times, May 2, 2012). The report, “Prices These Days! The Cost of Living in Australia” compared today’s living standards with those of 1984. It found that incomes grew by an average of 20% more than living costs, and equally between high and low earners. Despite complaints about rising electricity, mortgage, rent and petrol costs, the average household in Australia was $224 a week wealthier than in 1984. High income households were, on average, $429 a week better off and low income households were on average $93 a week ahead. Working couples with children were, on average, $328 a week better off than in 2003, and single parents were about $59 a week better off.

Australians were paying more for accommodation than 27 years ago, but people’s incomes had risen to keep ahead of living expenses. The prices of televisions and computers had fallen dramatically, the cost of clothing had remained relatively stable (due to the removal of import tariffs), and major household appliances had also remained stable, said the report. The cost of electricity, medical services, fruit, bread, and vegetables are more expensive. Petrol had increased by 208% in 27 years, but it is still cheaper than in every country except America, Canada, and Mexico. Australians were also spending more on childcare, education, holidays, restaurant meals, alcohol, tobacco, sport, and other items such as vehicles, furniture, and house renovations.

Sydney had the highest cost of living, due to high house prices, but its overall standard of living placed it behind other cities in Australia.

The capital cities across Australia ranked in terms of standard of living were (in order): Canberra, Darwin, Perth, Brisbane, Melbourne, Sydney, Adelaide, and Hobart. The standard of living in Canberra was more than 20% higher than Sydney.

The Suncorp Bank Wages Report (May 2012), in an analysis of income data, exposed the myth that higher education leads to higher incomes. Blue collar workers (such as miners, construction workers, transport workers, and the police) earned, on average, $150 a week more than white collar workers (education, healthcare, administration, arts, and real estate for example). In order of average weekly earnings were blue collar workers, white collar workers, financial services, media and telecommunications, and scientific services, with retail and hospitality workers last. In retail and hospitality, most workers were female, casual, or part-time. Canberrans earn, on average, more than people in other states. The top earners, by states in Australia, were from the Australian Capital Territory (Canberra), Western Australia, and Northern Territory.

Former economics professor and federal labor Member of Parliament, Andrew Leigh, in his address to the Sydney Institute on May 1, 2012, stated that Australia, known for being an egalitarian nation, was actually only egalitarian for about four decades from 1940 to 1980. Whereas the cost of living and standard of living has increased relatively equally among high and low income earners, Leigh maintains that there is now a “super-rich elite” amongst us. He bases this on an examination of taxation records dating back to 1910. Leigh said that large fortunes were made in the early 20^th century from retail, manufacturing, pastoralism, gold mining, and newspapers.

Leigh said that the rise of inequality in Australia began in the 1980s with the information technology revolution. In 1920, the richest 1% of Australians had 12% of the nation’s income, but by 1980 they only had 5% of the national income. In those 40 years, not one Australian would have qualified for the all-time Australian 200 Rich List. In 1980, the top 1% richest Australians had regained 13% of the nation’s wealth due to computers, trade, and larger firms. Taxation rates reduced from 69% in 1980 to the current 45% for top earners. However, union membership had declined from half the workforce in 1980 to currently 20% of the workforce.

Leigh maintains that Australians should return to their egalitarian roots and care more about the distribution of income. He maintains that unequal societies tend to be “immobile” societies. He calls for improvements in early childhood intervention and schooling for the most disadvantaged to equalize access and achievement, and progressive rates of income taxes to redistribute income. 

(www.canberratimes.com.au)