“Australian economic growth is roaring”… “uninterrupted growth” … “99 quarters since the last recession”
Despite the recent headlines and a buoyant share market, you may feel you’re doing it tough.
So, is it just you? Are you falling behind while the rest of Australia cruises easy street?
We can answer that. The Government has been funding a detailed study for the last 15 years*, and the truth is that we’re yet to fully recover from the 2009 Global Financial Crisis, and struggling to do so as mining investment falls, and with lower commodity prices.
Australian household wealth and income – key findings
- Household disposable incomes dropped in 2010 and again in 2011, then started recovering but remain lower than they were in 2009.
- We aren’t out of the woods – income turned down again (marginally) in 2014
This graph tells the story…
* The Household, Income and Labour Dynamics in Australia (HILDA) Survey is a household-based panel study which began in 2001, collecting information about 19,914 individuals in 7,682 households. What makes it unique is that it follows the same people over time (13 years so far).
**Included in their wealth of data is ‘median equivalized household disposable income’ which is the mid point in the data (the median) of the combined income of all household members after receipt of government benefits and deduction of taxes, adjusted for the number of people in each household.
- This is largely because of ‘underemployment’. In 2009, employment participation fell and unemployment rose. There was a partial recovery in 2010/2011 but then deterioration from 2012 to 2014.
- Household wealth – including property, superannuation and other investments – has also dropped since the GFC. The 65+ age group bucked this trend with increased wealth, largely due to higher levels of home ownership.
- Despite record low interest rates, property ownership is continuing to get harder: the proportion of adults who are home owners fell from 57% in 2002 to less than 52% in 2014, on track to fall below 50% by next year.
So if you’re struggling, you’re not alone. Don’t despair, though. It’s not all bad news:
- Measures of poverty have continued to decline.
- Reliance on welfare has been steady since the GFC but the evidence suggests that most welfare recipients only require support for a limited time.
- There has been relatively little change in income inequality since the GFC.
What are your thoughts?
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