ANALYSIS
Oakes: You cannot talk about your own budget
Joe Hockey receives a grilling from Laurie Oakes, after the Treasurer refused to discuss aspects of the new $3.5 billion childcare package.
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It can be hazardous for politicians to offer opinions about incomes. But Tony Abbott boldly went there on Sunday when he said a family income of $185,000 "isn't especially high" in a city like Sydney.
"Certainly it's not going to give you a particularly lavish life by any means," he said while defending a key income threshold in the government's new childcare policy.
Those earning $185,000 a year are in the top 6 per cent of all family incomes. Photo: Dominic Lorrimer
So where exactly does a family earning $185,000 a year sit on Australia's income distribution? The short answer: very high.
The National Centre for Social and Economic Modelling says those with an income of $185,000 were in the top 6 per cent of all family incomes, including singles, this financial year – that's on the 'adjusted family income' measure used for childcare and family payments income testing.
But because Mr Abbott was discussing childcare subsidies we can assume he was talking about families with children, who tend to have higher incomes than others. But even when you narrow it down to couples with children those with an income of $185,000 are still in the top 20 per cent of earners according to Natsem. In other words 80 per cent of families with children make do with less.
The average full-time worker in NSW earns $77,599 (ordinary time) according to the latest figures. Two full-time workers on that income would still be about $30,000 a year short of the amount Mr Abbott said was not "especially high" for a Sydney family. A full-time couple on the national minimum wage ($33,326) would earn just 36 per cent of it. On Sunday Fairfax reported that the average taxable income in Auburn was $36,186 in 2012-13 – it would take more than five workers on those earnings to reach that threshold.
The executive director of the Australia Institute, economist Richard Denniss, said the Prime Minister's comments were "proof that Mr Abbott, like many high income earners is out of touch" with average earnings in Australia. A recent survey by the Institute found that 51 per cent of people who earned between $100,000 and $150,000 a year thought that the average Australian earns between $100,000 and $150,000. One third of those who earned over $150,000 thought the average Australian earns over $150,000.
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