The purpose of this analysis is to examine the major trends of Australian household income over 10 years: 2008-2018, which ultimately contributes to household consumption, household well-being and economic growth in Australia.
Households may have various sources of main incomes at different stages of the life-cycle: working age households likely receive employee income, while retired households will likely utilise superannuation income. In total, there are 5 main income sources that households can rely on:
Employee income
Own unincorporated business income
Investment income
Superannuation income
Government pensions and allowances
Table 1 shows the main sources of household incomes. Employee income remains the major source of income for 61% of households, followed by government pensions and allowances (22.8%), Superannuation income (5.6%) and own unincorporated business income (4.3%).
Notably, investment income and superannuation income have increased marginally over the last 10 years, from 3.6% and 3.8% to 4.1% and 5.6%, respectively, while own unincorporated business income has declined from 5.8% to 4.3%. In the meantime, employee income remains stable over 10 years period, at around 61%.
Table 1: PROPORTION OF HOUSEHOLDS (%), by main source of household income, 2007–08 to 2017–18
Footnotes:
(a) Other income includes workers' compensation, child support, scholarships, accident and sickness payments, income from family members not in the household and other regular income sources nec.
(b) Includes overseas pensions
Income & Wealth Values
Households that have investment income and employee income enjoy the highest income level, while households that receive government pensions and allowances have the lowest level of income.
Notably, except investment income and superannuation income, all other types of income record very minimal changes over a period of 10 years.
Graph 1 - EQUIVALISED DISPOSABLE HOUSEHOLD INCOME (a), by main source of household income, 2007–08 and 2017–18
Footnotes:
(a) In 2017–18 dollars, adjusted using changes in the Consumer Price Index (b) Includes overseas pensions
Source: ABS Survey of Income and Housing, 2007–08 and 2017–18
As shown in graph 2, in 2017–18, households with investment income had the highest net worth across all income types ($3.8 million, 4.1% of households), followed by superannuation ($2.5 million, 5.6% of households). The net worth of households with superannuation increased almost 30% from $2.0 million in 2009–10 to $2.5 million in 2017–18. The net worth of households with investment income increased from $3.1 million in 2009-10 to $3.8 million in 2017-18.
However, households with employee income, the largest percentage of all households, have very minimal increase in household net-worth over the 10 years period.
Graph 2: HOUSEHOLD NET WORTH (a), by main source of household income, 2009–10 to 2017–18
Footnotes:
(a) In 2017–18 dollars, adjusted using changes in the Consumer Price Index
(b) Household net worth estimate for other income should be used with caution
(c) Household net worth estimate for zero or negative income should be used with caution
(d) Includes overseas pensions
Source: ABS Survey of Income and Housing, 2009–10 to 2017–18
IMPLICATIONS
Over this 10-year period, there was very minimal growth in household income and household net worth. At the same time, property prices have almost doubled, alongside the cost of living, which is on the rise as well. As a result, household debt have soared to significantly high levels, at 200% of household income as of 2019.
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