How much does a 60-year-old aged-care worker in Burnie actually make?
This week there was a debate in the lower house about the Government’s proposed tax cuts package – and one statement caught the attention of media.
In a response to a hypothetical question by the leader of the opposition, the Prime minister responded
“..a 60-year-old aged-care worker in Burnie is entitled to aspire to get a better job, is entitled to get a promotion, is entitled to be able to earn more money.’
The assumed premise being that tax cuts for higher income earners are an incentive to lower-income workers. One would think just having the chance to get a higher income would be incentive enough, but putting that aside, I thought it would be interesting to explore just what a 60-year-old aged care worker in Burnie actually earns.
60-something aged care workers in Burnie: a profile
According to the Census there were almost 50 aged or disabled care workers in Burnie aged between 60 to 69 in 2016.
It’s no surprise that these workers weren’t actually earning that much. In fact, the mean income per year was $34,000 and the median income was between $650-$799 per week or $33,800-$41,599 per year. There were no workers earning more than $65,000 per year.
Setting aside the fact that the odds are stacked against someone in their 60s attaining a job in a higher paid industry, in terms of getting a promotion there were only 7 Aged Care workers in Burnie who would potentially stand to gain any benefit from an increase in the second highest income tax threshold from $87,000 to $90,000 in 2018/19 and then to $120,000 in 2022/23. No Aged Care worker was earning more than $104,000 per year.
As mentioned, this is not surprising as Aged Care Workers are in the lowest 10% of paid occupations when it comes to average weekly earnings (quite remarkable when you also consider that 77% of the workforce in this industry have formal qualifications, compared to 55% for the whole economy).
The Prime Minister’s recent statement comes on the back of a statement he made in May when he said increasing the high-income threshold would mean
“Middle-income earners will be vastly better off… because they will only be paying a top marginal rate of 32½c”
Middle-income earners: a profile
Now Greg Jericho from the Guardian has dealt with this statement in some detail, but it doesn’t take that much digging to understand that $87,000 is far off what a middle-income earner is currently getting.
It is estimated that the median employee income in Australia was only $51,319 in 2016, which means they would need quite a big increase in the next few years to start hitting the 37c tax rate.
The PM went on to say
“teachers and nurses, electricians and mechanics—these are the types of occupations who will be substantially better off”.
However, looking at incomes by occupations, it’s hard to suggest that the majority of these workers would be substantially better off. In 2016, the average annual earnings for these occupations were all under the current 37c tax threshold ($87,000). Only Electricians appear close to the mark and their average is boosted by large earnings in the resource states (WA and QLD).
Occupation | Average Annual Earnings, 2016 |
2544 Registered nurses | $71,900 |
2412 Primary school teachers | $68,084 |
2414 Secondary school teachers | $79,799 |
3411 Electricians | $82,935 |
3212 Motor mechanics | $64,376 |
Source: ABS Cat: 6306.0 – Employee Earnings and Hours, Australia, May 2016
Now there’s no question that the low- and middle-income tax offset set to be brought in under Phase 1 of the proposal would benefit numerous Australians. It has often been argued that tax cuts at the lower end provide the most incentive for people to seek employment and/or work longer hours.
However, it is hard to argue that people earning more than $87,000 a year require any more incentive when they are already in the top Quartile (25%) of income earners in Australia ($79,760 or more).
People are welcome to have different opinions on policy positions by both sides of parliament, but most people would at least like debate to be grounded in real evidence as a starting point. Misleading statements can influence debate and see bad policies enacted or good policies defeated.
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A very interesting article, thank you. Would you just clarify if all figures refer to full-time earnings or do the figures include part-time workers? Thanks
Hi Vicki,
Figures are for all workers (full time and part time). So, yes aged care workers income would be influenced by less hours worked per week in general in this occupation. Also, average hourly total cash earnings are $10 less for personal carers than the overall average hourly earnings for the economy (ABS 6306.0). This rate would be affected by average qualification levels in the industry and the sector in which most of them work.
For interest, the aged care workers in Burnie were roughly split 50/50 between part time and full-time in 2016.
Thanks
Lower taxes means less income for the Government. This means less services or reduced services. When this condition takes place the Government will be experiencing a greater deficit. This leads to a reduced dollar level and more expensive imported goods. In order to decrease the deficit The economy needs greater profit potential but with lower wages discretionary spending is reduced resulting in reduced profit potential by the economy. Unless one assumes that the well off who will receive a more substantial tax reduction will actually spend more. A high risk I say in assuming this. That leaves one option for a temporary Government income potential and that is the sale of more Public assets. I wonder I wonder if this tax reduction play by the conservatives is to bring about the transfer of public assets to private hands. We all have experienced the end long term result of greater privatisation of public assets. Did private enterprise make these services cheaper? Well my water rates have increased, my power bills have increased not to mention other essential services such as Health costs and education. The conservatives claim to be better financial leaders but it turns out that they happen to get into power when the world economic conditions are on the up and out of power when the world economic conditions are negative. When the tide comes inn all the boats rise and we have the conservatives making claims that the raising of the boats is of their making. I have lived in this country for 58 years and when I reflect on the good things that have happened I remember the following; European immigration, Free tertiary education in the 60s, The introduction of Medicare, The introduction of Superannuation, The creation of the TAFE system, The move to integration rather than assimilation, The 37 hour working week, penalty rates for unusual working hours, Exiting the Vietnam war, Recognising China, Reconciliation with the indigenous followed by the apology, the NDIS, and many others. Its no secret that these were visionary ideals that have founded our nation to what it is today derived from the leadership of the Labor party. I struggle to find anything of equal importance that has been envisioned by the conservatives. There are a couple that come to mind and these are; The implementation of the Universities by the Menzies in the early 50s, The intervention in the Timorese war, and the negative stand by the conservatives on the issue of us becoming a republic. Can any one remember of anything substantive introduced by the conservatives that shines in the 21st century. The Labor party provides leadership that installs important positives to our nation, the conservatives provide better management thus far but one should never look for a positive visionary agenda. They are focussed on the individual interests of the few but never about the good of the nation. The liberal ideal as advocated by John Stewart Mills the founder of Liberalism stands on the main ideal of the “Greatest good for the greatest number”. The tax benefits they are driving is about the greatest good for the minority at the expanse of the majority. They are not supporters of the key liberal principle history based on actions tells us that the labor party is the upholder of liberalism not the conservatives.