The Australia Institute's Flying Pig Moment - Australian families are actually doing very well

Led by one of Australia's most eternally pessimistic individuals, the curmudgeonly Clive Hamilton, the Australia Institute is a left wing think tank that spends most of its time bashing the government and supporting such 'progressive' ideas as carbon emission schemes.

Whenever I'm feeling happy and confident about the world I take a quick trip over to the Australia Institute website and get a solid dose of misery.

Imagine, then, my surprise at the contents of the AI's latest report The State of the Australian Middle Class, which actually paints a pretty rosy picture of things.

From the press release:

Fact, only about a third of middle class families actually have a mortgage and only eight per cent have a mortgage over $200,000; the median disposable income for the typical Australian family today is almost $70,000, 43 per cent higher than the median income for all households.

The findings result from a comprehensive analysis of data from the Household
Income and Labour Dynamics in Australia (HILDA) survey and new data from the
Australian Bureau of Statistics (ABS). The data show that few typical Australian
families are struggling financially; in fact, most are doing very well.

The authors conclude there is a marked difference between the perception and reality
of financial hardship in Australia.

“There is considerable evidence that middle-class Australians focus not on what they
have but on the gap between what they have and what they want, creating a sense of
material deprivation in a time of plenty,” Institute Executive Director Dr Clive
Hamilton said today.

“The clear message from the data - as opposed to anecdote - is that Australians are in the main not doing it so tough and that the Australian middle class is in fact
prosperous”.

Here are a few excerpts from the full report:

In 2005 the median disposable income of all households was $48,193. In contrast, the median disposable income of the typical Australian family as we have defined it was $69,073, 43 per cent higher. The average income for these households was $76,778, 37 per cent higher than the average for all households. The standard of living afforded by a disposable income close to $70,000 is comfortable by any measure and conflicts with the widespread view of struggling families.

Do the median and mean figures conceal a wide disparity in income levels among
typical families? In fact the spread of incomes is significantly narrower for typical
families than for all households. There are very few typical families with low
incomes; only 18 per cent have disposable incomes below $45,000. The picture is
very different for single parent families where low incomes are much more prevalent and the narrative of struggling families has much greater validity.

There is a widespread view that Australians are suffering from ‘mortgage stress’ and that the pain has spread to middle-class suburbs across the nation. Media reports give the impression that the bulk of the population is finding it difficult to make ends meet as mortgage repayments rise.

In fact, very few middle-class households suffer from any form of mortgage stress.
Defining ‘middle class’ as those households with disposable incomes between the 30th and the 80th percentiles, nearly two-thirds (63 per cent) of middle-class households do not have mortgages at all. Of those who do, 41 per cent have mortgages under $100,000 and nearly 80 per cent under $200,000. Only eight per cent of middle-class households have mortgages over $200,000.

And a couple of great graphs showing that things are, in fact, improving.




As they say, read the whole thing.

The Coalition should stick it on their website to support their re-election campaign.

(Nothing Follows)