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2.08 Income

Why is it important?

There is strong evidence from Australia and other developed countries that low socio-economic status is associated with poor health (Turrell et al. 2000; Marmot et al. 2010; WHO 2003). Low income is associated with a wide range of disadvantages including poor health, shorter life expectancy, poor education, substance abuse, reduced social participation, crime and violence. People with a lower socio-economic status bear a significantly higher burden of disease (Begg et al. 2007). The level of income inequality within a society has been identified as a determinant of differential health outcomes (Wolfson et al. 1999). It has been estimated that in the NT, socio-economic status contributes 30% to 50% of the gap in life expectancy between Indigenous and non-Indigenous Australians (Zhao et al. 2013b). Biddle (2011a) found complex relationships between income and self-ratings of wellbeing among Indigenous Australians.

Disparity in income is one aspect of socio-economic status through which Indigenous Australians face disadvantage. Income is closely linked to employment status (see measure 2.07) and educational attainment (see measures 2.04, 2.05 and 2.06). The statistical measure adopted here is 'equivalised gross household income', which adjusts reported incomes to take into account number of people living in a household, particularly children and other dependants, as well as economies of scale.

Findings

Based on the 2012–13 Health Survey, an estimated 43% of Indigenous adults had incomes in the bottom 20% of equivalised gross weekly household Australian incomes. This compares with 17% of non-Indigenous adults. Only 6% of Indigenous adults lived in households with an equivalised gross weekly income in the top quintile compared with 22% of non-Indigenous Australians. The proportion of Indigenous adults in the lowest quintile of equivalised household income varied across jurisdictions, from 52% in the NT to 19% in the ACT. In all other jurisdictions, the proportion of Indigenous adults in the lowest quintile of equivalised household income was in the range of 36% to 46%.

A higher proportion of Indigenous adults living in very remote areas were in the lowest quintile of equivalised household income (59%). Inner regional areas had the lowest proportion of Indigenous adults in the lowest quintile (38%). Remote areas had the highest proportion of Indigenous adults living in the highest quintile (9%) while very remote areas had the lowest (2%).

Over time, the third, fourth and highest equivalised household income quintiles have been static for Indigenous adults. There was an increase in the proportion of Indigenous adults in the lowest quintile between 2004–05 and 2008 and then a drop between 2008 and 2012–13, leading to no significant change over the whole period.

In 2012–13, the median equivalised gross weekly household income for Indigenous adults was $465 compared with $869 for non-Indigenous adults. After adjusting for inflation, between 2002 and 2008 there was a statistically significant increase of $107 (28%) in the median equivalised gross household income for Indigenous adults ($385 to $492). There was no statistically significant change between 2008 and 2012–13 and no significant change in the gap between Indigenous and non-Indigenous adults.

These national estimates mask considerable geographic variation. For example, the median gross weekly equivalised income for Indigenous adults in 2012–13 ranged from $395 in the NT to $827 in the ACT. There was also variation by remoteness, ranging from $364 in very remote areas to $516 in major cities.

Biddle (2013) examined Census personal income data for Indigenous Australians and reported variations in disposable income by age (40–44 year olds had a disposable income 3.94 times as high as 15–19 year olds) and sex (1.20 as high for males) as well as variations in average income by region (ranging from $258 per week in Apatula, NT, to $783 per week in South Hedland, WA).

In 2012–13, 54% of Indigenous adults and 58% of children aged 0–14 years were living in households reporting that they could not raise $2,000 within a week in an emergency. Indigenous Australians in remote areas were more likely to report that they could not raise $2,000 within a week than those in non-remote areas (73% compared with 51%). Approximately 43% of Indigenous adults were living in households that had experienced days without money for basic living expenses in the last 12 months.

An indication of the relationship between low income and poorer health is provided by the 2012–13 Health Survey. Indigenous Australians in the lowest equivalised household income quintile were more likely to report fair/poor health than those in the highest quintiles (see measure 1.17). Relationships between income and educational attainment and employment are also evident.

A recent study found that Indigenous Australians had lower total personal incomes than other Australians across all labour force categories, particularly for those who were employed full-time (Howlett et al. 2015). This is partly due to lower wages (around 18% lower for Indigenous men), which can be explained by lower levels of education, poorer access to 'good' jobs and less weeks worked per year on average. This paper finds that Indigenous Australians have considerably less income from other private sources (business and investment income) than other Australians. A higher proportion of Indigenous incomes come from government payments. Based on responses from the 2012–13 Health Survey, 46% of Indigenous Australians aged 18–64 years received a government cash pension or allowance compared with 13% of non-Indigenous Australians. Indigenous women received higher government payments than non-Indigenous women. Indigenous women, on average, have more children, are more likely to be a carer and/or have a partner with a low income. Hunter et al. (2014) found that the gaps in both personal and household income in urban areas are greatly reduced after adjusting for educational attainment.

Implications

The disparity in incomes between Indigenous and non-Indigenous Australians has important implications for health. These implications include the capacity to access goods and services required for a healthy lifestyle, including adequate nutritious food, housing, transport and health care. Other factors that may exacerbate the situation faced by low-income households include resource commitments to extended families and visitors (SCRGSP 2007). Income discrepancies are also an indicator of uneven access to education and employment opportunities.

Figure 2.08-1 Proportion of persons aged 18 years and over in each equivalised gross weekly household income quintile, by Indigenous status, 2012–13
Proportion of persons aged 18 years and over

Figure 2.08-1 shows the proportion of Aboriginal and Torres Strait Islander peoples and non-Indigenous Australians aged 18 years and over in each equivalised gross weekly household income quintile in 2012–13. Equivalised gross weekly household income ranges are as follows: first quintile = $407 or less; second quintile = $407 to $651; third quintile = $652 to $978; fourth quintile = $979 to $1467; and fifth quintile = $1468 or more. Refer to the findings section of this measure for a description of key results found in this figure.

Source: ABS and AIHW analysis of 2012–13 AATSIHS

Figure 2.08-2 Proportion of Indigenous Australians aged 18 years and over in each equivalised gross weekly household income quintile
Proportion of Indigenous Australians aged 18 years and over

Figure 2.08-2 shows the proportion of Aboriginal and Torres Strait Islander peoples and non-Indigenous Australians aged 18 years and over in each equivalised gross weekly household income quintile in 2004-05, 2008 and 2012–13. Refer to the findings section of this measure for a description of key results found in this figure.

Source: ABS and AIHW analysis of 2012–13 AATSIHS, 2008 NATSISS, 2004–05 NATSIHS

Figure 2.08-3 Proportion of persons aged 18 years and over in each equivalised gross weekly household income quintile, by Indigenous status and remoteness, 2012–13
proportion of persons aged 18 years and over

Figure 2.08-3 shows the proportion of Aboriginal and Torres Strait Islander peoples and non-Indigenous Australians aged 18 years and over in each equivalised gross weekly household income quintile in 2012–13 by remoteness category. Refer to the findings section of this measure for a description of key results found in this figure.

Source: ABS and AIHW analysis of 2012–13 AATSIHS

Figure 2.08-4 Proportion of Aboriginal and Torres Strait Islander peoples aged 18 years and over who were in the lowest quintile of equivalised gross weekly household income quintiles, 2012–13
Proportion of Aboriginal and Torres Strait Islander

Figure 2.08-4 shows the proportion of Aboriginal and Torres Strait Islander peoples aged 18 years and over in the lowest quintile of equivalised gross weekly household income in 2012–13. Data is presented separately for each jurisdiction, and Australia as a whole. Refer to the findings section of this measure for a description of key results found in this figure.

Source: ABS and AIHW analysis of 2012–13 AATSIHS

Figure 2.08-5 Median equivalised gross weekly household income, persons aged 18 years and over, by Indigenous status, 2002, 2004–05, 2008, 2012–13
Median equivalised gross weekly household income

Figure 2.08-5 shows the median gross weekly equivalised household income (in dollars) among Aboriginal and Torres Strait Islander peoples aged 18 years and over in 2002, 2008 and 2012–13. In 2012–13, the median equivalised gross weekly household income for Indigenous adults was $465 compared with $869 for non-Indigenous adults.

Source: ABS and AIHW analysis of 2012–13 AATSIHS 2007–08 NHS, 2008 NATSISS, 2004–05 NATSIHS, 2002 NATSISS