The latest report of the Household, Income and Labour Dynamics in Australia (Hilda) survey, released today by the Melbourne Institute of Applied Economic and Social Research, provides more evidence of stagnant household incomes. In 2016 real household disposable income actually fell, and it remains below the peak level of 2009. While the survey finds that inequality improved slightly in 2016, it highlights the increasing financial stress for families, as incomes fail to keep pace with living costs.

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The annual release of the Hilda survey is always manna from heaven for data nerds. Unlike most ABS surveys, which are snapshots of the population at any one moment in time, the Hilda survey provides a longitudinal survey. That means it is able to better look at the changes in our society over time.

Among the most important aspects of the survey are its findings on household income and inequality.

The news on inequality is mostly good.

In 2016 the Gini coefficient, which measures the scale of inequality from 0 to 1, was effectively unchanged, with the shift from 2015 to 2016 a marginal 0.294 to 0.293. Both years recorded lower inequality than at the start of the century.

The survey’s long-term measure of inequality, also showed a slight fall in 2012-16; however, the level of inequality on this measure remains higher than it was in 2001-05:

The survey also found that income mobility remains higher than it was in 2001 – meaning people are more likely to have the same income from one year to the next.

The survey notes that this is a bit of a good-news/bad news situation. “While the increase in income stability from year to year is a positive development for people with good incomes” survey author Roger Wilkins, notes, “this is not a good development for people with low incomes, since they are more likely to have persistently low incomes”:

What is clearly not good news, however, is the findings that real median household disposable income declined once again in 2016. The 0.5% fall coupled with the 0.2% fall in 2015 means in 2016 a median income family of four was around $690 worse off in real terms than it was in 2014, and $2,000 worse off compared to 2009:

The survey highlights just how poor Australian households have been doing since the GFC. While thanks to the mining boom, the median disposable incomes of Australian households rose much faster than in the USA, since the GFC both nations have been doing it tough. In the US incomes went backwards by more than here, but since 2009 a case could be made that Australian households have made less progress:

The survey also allows us to examine the question of just what is the median income of Australian households.

The survey finds that the median equivalised household disposable income in 2016 was $46,865 – down from $47,085 in 2015. That means that a single person with that level of disposable income is in the median of all Australian households accounting for size.

To take into account an extra adult or children we add 50% per adult and 30% for each dependent child. This means for a family of four to have the median level of disposable income in 2016 they would have required an income of $98,417.

As this is disposable income, using the standard 70:30 income split, it would mean one of the adults would be on a pre-tax income of around $89,000 while the other was earning around $32,000.

Such a measure does give the government some level of support that raising the 37% tax threshold from $87,000 to $90,000 does cover median households – although this is very much dependent upon the size of the household. For a family with just one child, the median disposable income falls to $84,375, which on the 70:30 income split would have the highest bread winner on a pre-tax income of around $73,000.

At any rate we remain a very long way from being able to say that an individual income of $120,000 is anywhere close to being middle Australia.

The report also highlights that income levels are generally higher in capital cities than in other urban or non-urban areas, with only Adelaide and the urban areas of Tasmania being below the national average:

The flat income growth however has not surprisingly translated into rising financial stress for households.

Housing costs have been a major factor in this, with the median households now spending 3.6% points more of their income each year on housing than they did at the turn of the century – or around $3,500 for a family of four in real terms:

The survey has found that housing stress has also risen in most capital cities in the past decade.

The survey defines housing stress as the point at which housing costs, such as rent or mortgage repayments, constitute “more than 30% of household income, and the household is in the bottom 40% of the income distribution”. As such the definition focuses on relatively low-income households as those with higher incomes could be expected to reallocate their expenses in a way beyond the ability of those on lower incomes.

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Here we see that all capital cities but Perth (which has seen a sharp fall in the price of rents) have higher levels of housing stress than they did a decade ago:

But the greater cost of living in Sydney is clearly apparent – as has the fact that rising house prices and rent has also made it much harder to live in Sydney on a low income compared to other capital cities over the past decade.



The annual Hilda report continues to provide some of the best data on Australia produced each year. While this year’s report mostly has good news on inequality, the lack of household income growth and the growing levels of housing stress highlights that the decades since the GFC has been a struggle for most to get ahead, and that for middle Australia, the standard of living remains worse than it was in 2009.

• Greg Jericho is a Guardian Australia columnist