INCOME – AUSTRALIA

Inflation is smashing incomes more than interest rates are

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Original article by John Kehoe, Michael Read
The Australian Financial Review – Page: 3 : 10-Sep-24

Challenger’s chief economist Jonathan Kearns refutes claims by Treasurer Jim Chalmers that the Reserve Bank’s interest rate rises are "smashing the economy". The latest national accounts data shows that total household incomes rose by 6.2 per cent in 2023-24. Kearns contends that interest rates eroded just 1.3 percentage points of the income gains, compared with the 4.4 percentage point impact of inflation. He notes that unlike interest rates, inflation affects all households. Kearns is a former economist at the Reserve Bank.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, CHALLENGER LIMITED – ASX CGF

Households face income pain until 2027: economists

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Original article by Michael Read
The Australian Financial Review – Page: 6 : 21-Feb-24

Analysis suggests that Australian real household incomes fell by 6.1 per cent in the year to September 2023, when adjusted for inflation and population growth. Real household incomes have now fallen for eight consecutive quarters, returning this metric to 2017 levels. Independent economist Chris Richardson does not expect real household incomes to return to pre-pandemic level until 2027; he adds while the revised stage-three tax cuts in mid-2024 will provide some relief for households, productivity growth will be necessary to boost living standards in the long-term. Deloitte Access Economics partner Stephen Smith in turn forecasts that household incomes will return to pre-pandemic levels by September 2025.

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DELOITTE ACCESS ECONOMICS PTY LTD

Rich hit hard as households lose $102b

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Original article by Andrew Tillett
The Australian Financial Review – Page: 5 : 7-May-20

Research by the Australian National University highlights the economic impact of the coronavirus pandemic. The ANU’s survey suggests that the nation’s employment rate fell to 58.9 per cent in April, compared with 62 per cent in February. This equates to the loss of about 670,000 jobs. The ANU also estimates that the total loss of income for Australian households since the lockdowns began is about $102bn, while after-tax income on a per capita basis has fallen from $740 a week to $663. The richest 10 per cent of households have been hardest hit, with their income falling from $2,110 per week to $1,688.

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AUSTRALIAN NATIONAL UNIVERSITY

PM’s welfare shake-up to deliver $2bn saving

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Original article by Greg Brown
The Australian – Page: 1 & 2 : 28-Jan-20

The federal government will legislate to ensure that welfare recipients are not overpaid, in a move that is projected to save some $2.1bn over four years. The proposed reform will affect about 1.2 million welfare recipients who also have income from a job, with changes to how they report gross earnings to Centrelink. Social Services Minister Anne Ruston says the current system for calculating earnings can be confusing and result in misreporting. The cost savings will help offset the impact of the bushfires on the federal Budget.

CORPORATES
AUSTRALIA. DEPT OF SOCIAL SERVICES

Perhaps workers should share in the executive pay bonanza

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Original article by Adam Creighton
The Australian – Page: Online : 30-Dec-19

Restoring income growth for the majority of Australians is one of the key political and economic challenges for 2020. Median disposable income in 2017 was less than it was in 2009, according to the Melbourne Institute’s Household, Income and Labour Dynamics in Australia (HILDA) survey. The HILDA figures for 2019 are not available as yet, but private sector wages have increased by around one per cent in real terms since late 2017. One way to increase higher disposable incomes could involve governments changing corporate rules so that companies pay higher wages and invest more, rather than buy back shares and pay executive bonuses. It could be made a requirement that big companies have a certain number of employee representatives on their boards. Interviewing for the HILDA survey is conducted by Roy Morgan.

CORPORATES
UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH, ROY MORGAN LIMITED

Aussies no better off since GFC

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Original article by Adam Creighton
The Australian – Page: 1 & 4 : 30-Jul-19

The latest Household, Income and Labour Dynamics (HILDA) survey shows that average household income in Australia increased by just 3.5 per cent (or $3,156) between 2009 and 2017. Analysis also shows that the median annual income in 2017 was $542 lower than in 2009, while the median income has fallen by $100 since the Coalition was elected in 2013. Meanwhile, the share of households in relative poverty has increased to 10.4 per cent, while the share of households living in absolute poverty has been steady at around four per cent since 2012. Interviewing for the HILDA survey is conducted by Roy Morgan.

CORPORATES
UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH, AUSTRALIAN BUREAU OF STATISTICS

Lowest paid being in richest 20pc of households blunts wage-lift case

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Original article by Matthew Cranston
The Australian Financial Review – Page: 4 : 13-Mar-19

Analysis of data from the Household, Income and Labour Dynamics in Australia (HILDA) survey shows that 13.8 per cent of the nation’s lowest-paid workers are living in the wealthiest 20 per cent of households. In contrast, 13.6 per cent of people on the lowest incomes are living in the poorest 20 per cent of households. The director of the HILDA Survey, Professor Mark Wooden, notes that many people on low incomes are secondary earners working in small business or the self-employed, particularly in wealthier households. He has also questioned the merits of a ‘living wage’, as advocated by Labor leader Bill Shorten.

CORPORATES
UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH, AUSTRALIAN LABOR PARTY, RESERVE BANK OF AUSTRALIA

Inequality flatlines in Australia

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Original article by David Uren
The Australian – Page: 8 : 1-Mar-19

The OECD contends that there has been no increase in inequality in Australia in the last 15 years, which is at odds with Labor’s claim that inequality is rising. The OECD states that the income of the poorest 20 per cent of the population has risen the most since 2001, while middle-income earners have seen the lowest increase in income. It suggests that this is because workers in this income bracket are most vulnerable to automation. The OECD’s study was based on the Melbourne Institute’s Household Income and Labor Dynamics (HILDA) survey, with the OECD stating that income inequality in Australia is above the OECD average.

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, AUSTRALIAN LABOR PARTY, UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH

Incomes to be weak for years: IMF

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 4 : 26-Feb-19

The International Monetary Fund expects the Australian economy to grow by just 2.6 per cent in 2020, compared with the federal government’s forecast of three per cent growth. The IMF’s forecasts also show that growth in real incomes will average 0.3 per cent annually over the next six years, when adjusted for inflation. This compares with a long-term average of 1.8 per cent since the 1960s. Industry Super Australia’s chief economist Stephen Anthony says the IMF’s forecasts demonstrate the need for both sides of politics to put economic reform on their policy agenda.

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INTERNATIONAL MONETARY FUND, INDUSTRY SUPER AUSTRALIA PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, DELOITTE ACCESS ECONOMICS PTY LTD, OUTLOOK ECONOMICS, RESERVE BANK OF AUSTRALIA, AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA

Incomes lagging rise in cost of living

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Original article by David Uren
The Australian – Page: 4 : 7-Feb-19

The Australian National University’s Centre for Social Research & Methods estimates that household income has increased by 8.5 per cent over the last three years. However, the increase in the cost of living over this period means that real income per person has fallen by 2.9 per cent. The analysis also shows that so-called bracket creep saw personal income tax payments rise by 20 per cent to $57.4bn over the three years to 2018, while total disposable income increased by just 7.1 per cent.

CORPORATES
AUSTRALIAN NATIONAL UNIVERSITY. CENTRE FOR SOCIAL RESEARCH AND METHODS, RESERVE BANK OF AUSTRALIA, AUSTRALIAN LABOR PARTY