Census
Grogonomics

A school principal is an odd occupation to pick as being somehow representative of ordinary Australians

The tax cut debate, as expected, has led to an absolutely mountain of manure designed to mislead about who is going to benefit. Data on personal incomes out this week from the ABS drawing on the 2015-16 ATO tax statistics once again how delivers a nice shot of reality to the debate. The biggest beneficiaries of the tax cuts are high income earners, with median incomes earners – especially women – largely ignored.
The government would have you believe the main beneficiaries of the tax cuts are true blue, dinky-die, aspirational Aussie battlers, while the opposition would have you think it is merchant bankers from Vaucluse.
As I have previously related, certainly merchant bankers and their ilk are the ones who are going to benefit the most. While stage one of the tax cuts – lifting the low-income tax offset – benefits low and median income earners, stages two and especially three are focused mainly on benefitting those who earn more than $90,000 and even more so, those who earn more than $120,000.
The government has now sought to encompass those within that income as those who will earn more than $90,000 by July 2024 with the proposal to axe the second highest tax bracket, which is proposed to start at that level of income.
Using this measure allows the government to talk about people earning $75,000, because if we use the government’s (ludicrous) projections of wages growing by 3.5% after 2020-21, by 2024 such people will be earning more than $90,000.
Now certainly someone on $75,000 sounds more “average”, and indeed it is lower than the average annual full-time earnings of $81,531 (though still above the average full-time earnings for women of $73,268). But it remains 21% higher than the average annual earnings for all workers of $61,968.
But where does it sit in relation to most workers? For that we need to look at the median income, and here the data out from the ABS this week gives us some insight.
Using the latest ATO tax statistics the ABS concludes that the median income for employees in 2015-16 was $51,319, with the median for men at $60,999 and for women at $51,319:
No state or metropolitan area reaches the $75,000 median income – the ACT and greater Darwin have the highest and the non-Adelaide parts of South Australia have the lowest median of $41,778:
That’s not to say some areas don’t have a median income above $75,000.
Out of nearly 2,200 suburbs with more than 500 residents, a total of 20 had median incomes higher than $75,000.
The good news is the data suggests there is no correlation between wealthy areas and more inequality – if anything, the more wealthier a suburb, the lower the inequality (although the relationship is very weak):
Interestingly the growth in income over the five years to 2015-16 is very clearly weighted towards older groups.
When we break the data down by occupation again we find two groups who can proudly be part of the $75,000 and above median income group – male managers, and male professionals:
And when we break down the occupations by age we see that once again it is a pretty niche group who can claim that $75,000 is median income – managers and professionals aged 35-64:
And it is within this grouping that comes one of the more bizarre examples being used this week to advocate the tax cuts – that of school principals.
During Monday’s question time, in response to jibes about the tax cuts benefitting “bankers from Vaucluse” the prime minister responded that “there will be many, many occupations – school principals or police superintendents, which are not normally regarded as being part of the millionaire, banker class of Vaucluse – that will be earning an income that gets up towards that $200,000 mark”.
Now the school principal is an odd occupation to pick as being somehow representative of ordinary Australians.
They are not even representative of those who work in schools – making up only around 3.5% of all teachers in primary and secondary schools.
And they earn a hell of a lot of money compared to the rest.
The average income in 2015-16 of a school principal was $115,066 compared to $72,398 for secondary school teachers and $64,559 for primary school once, and they are also incidentally more likely to be claiming a franked dividend and negative gearing a property:
By Tuesday the prime minister had made it more specific. In boasting about his plan to lift the highest tax bracket from $180,000 to $200,000 and abolishing the second highest tax bracket completely, he cited a school principal in Tasmania.
Tasmanian principals in 2015-16 had a median taxable income of $108,982, which would have them earning more than 85% of Australians. Hardly the type lacking for aspiration I would suggest.
But even this principal is not going to be worrying about the $180,000 anytime soon, let alone as Malcolm Turnbull suggested “earning an income that gets up towards that $200,000 mark.”
They will only reach the $180,000 mark (using again the government’s own ludicrous predictions for wages growth) in 2031-32.
So why not use the example of a Tasmanian school teacher? After all, with a median income of $65,548 they are a bit above average, but not too much.
Well, they only get to $120,000 in 2034-35 and to the magical $180,000 in 2046-47. By which time I suspect they might be somewhat drained of their aspiration:
All the data, whether using census figures or taxation statistics, makes it clear who will benefit from the second and third stages of the government’s tax cuts – it is people earning well above average and median incomes, and no amount of misdirection by the prime minister or treasurer can hide that fact.

• Greg Jericho is a Guardian Australia columnist