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New Zealand Income Survey: June 2007 quarter
Embargoed until 10:45am  –  04 October 2007
Commentary

Introduction

The information in this release comes from the annual New Zealand Income Survey, which is run during the June quarter (April to June), as a supplement to the Household Labour Force Survey. It provides a snapshot of income statistics on people and households.

When interpreting information about income, all factors impacting on income must be considered. Factors such as sex, age, industry, occupation, qualifications obtained, labour force status, part-time and full-time status, where people live and ethnicity are all associated with the income people and households receive.

Income averaged across all people from all sources includes those who have zero income for some income sources. Income averaged across those receiving income from a source only includes those that receive that source.

All figures in this release refer to gross (before tax) income. People aged less than 15 years are excluded from the survey.

All people, all sources income

In the June 2007 quarter, the average (mean) weekly income for all people from all sources was $667, an increase of 9.4 percent from the June 2006 quarter average of $610. This 9.4 percent increase was greater than the 4.0 percent change between the June 2005 and 2006 quarters, and was the highest annual percentage increase since the June 2002 quarter. Main contributors to the growth in average weekly income from all sources were increases in average weekly income from wages and salaries and investments. There has been an average annual increase of 5.4 percent in average weekly income from all sources across the June 2002 to the June 2007 quarters.

Average weekly income from all sources in the June 2007 quarter was $832 for males, an increase of $79 (10.4 percent). For females, average weekly income from all sources increased by $37, up 7.8 percent to $510.

Graph, Change in Average Weekly Income from All Sources By Sex.

Income quintiles divide the population into five groups by ranking people in the order of the amount of income they receive. The bottom quintile (quintile 1) is the lowest 20 percent of the population in terms of income, while the top quintile (quintile 5) is the highest 20 percent of the population.

In the June 2007 quarter, the top quintile comprised 11.7 percent of females and 27.9 percent of males, compared to 11.3 percent of females and 29.1 percent of males for the June 2006 quarter. In contrast, 23.4 percent of females and 15.7 percent of males were in the bottom quintile for the June 2007 quarter.

Average weekly income from all sources for all people in the June 2007 quarter was highest for the regional council areas: Wellington ($812), Auckland ($687) and Southland ($659). Manawatu-Wanganui had the lowest average weekly income from all sources ($562).

In the June 2007 quarter, the age groups with the highest average weekly income for all people from all sources were the 45- to 49-year age group ($883) and the 40- to 44-year age group ($877). Over the year, the age group with the largest percentage change was the 60- to 64-year-old age group, where their average weekly income from all sources increased by 22.4 percent (to $732). The only age group to show a decrease for the June 2007 quarter compared to the same quarter of the previous year was the 20- to 24-year-old age group. Their average weekly income from all sources decreased by 2.7 percent (to $426).

Graph, Average Weekly Income from All Sources.  

Average weekly income from all sources in the June 2007 quarter increased for all ethnic groups compared to the same quarter in 2006. The 'other' ethnic group had the largest percentage increase of 10.2 percent.

Ethnic group Average weekly income from all sources
2006 and 2007 June quarters
2006
($)
2007
($)
Annual change
(%)
European / Pākehā 658 723 9.9
Māori 506 526 3.8 
Pacific peoples 434 477 9.9 
Other ethnic group 460 507 10.2

Note: The ethnic groups are based on prioritised ethnicity.

Sources of income

Typically, wage and salary income is the most commonly received source of income for the working age population of New Zealand (15 years and over), with 55.1 percent of people receiving income from this source in the June 2007 quarter. For the remaining source types, investment income was received by 38.0 percent of people; government transfers by 31.9 percent; self-employed by 11.4 percent; other transfers by 2.4 percent; and no source of income by 8.6 percent. It is possible for a person to receive more than one source of income and so these percentages sum to more than 100 percent.

Graph, Proportion of All People Receiving Income By Source.

Wage and salary income

Average (mean) weekly income from wages and salaries for all people increased by $33 (8.0 percent), from $405 to $438. Both sexes had increases, compared with the same quarter of the previous year. The average weekly wage and salary income for all people was $552 for males (up $47) and $330 for females (up $19).

Graph, Change in Average Weekly Income from Wages and Salaries.

The average weekly wage and salary income for people receiving income from this source had a similar change to the average across all people measure, with an increase of 7.7 percent (up to $796). This is broadly consistent with an increase of 4.6 percent in average weekly earnings over the same period, as measured by the Quarterly Employment Survey for the June 2007 quarter.

While the increase in the number of wage and salary earners was similar for males and females (up 2.0 percent and 1.3 percent, respectively), for those receiving wage and salary income, average weekly income for this source increased more for males (up 8.7 percent) than for females (up 6.0 percent). The larger increase for males was due to a combination of factors, including more males being represented at the higher wage and salary income levels, and more males in full-time employment than females (59.0 percent of all full-time wage and salary earners were male). Females made up 72.1 percent of the total number of part-time wage and salary earners.

Full-time employment is defined as working 30 hours or more per week, while part-time is working fewer than 30 hours per week. Average weekly income for part-time wage and salary earners increased marginally by 0.8 percent (to $291) for the June 2007 quarter. In contrast, there was an increase of 8.9 percent for full-time wage and salary earners (to $957 per week).

Hourly earnings and hours worked

The number of hours worked and hourly earnings are two key factors that influence average (mean) weekly wages and salaries income. The average number of hours worked have remained unchanged for the last two years. For the June 2007 quarter, average hours worked were up for males and down for females.

Average hourly earnings for people receiving income from wages and salaries in the June 2007 quarter were $21.41, an increase of $1.37 (6.8 percent) from the same period last year. This was mainly due to an increase for males of $1.75 (8.2 percent), whereas hourly earnings for females increased by $0.96 (5.2 percent).

Another measure of hourly earnings is median hourly earnings. Median refers to where half of the people receive more, and half receive less, than the stated amount. Median hourly earnings tend to be less influenced by extreme high or low earning amounts than average figures.

Like average hourly earnings, median hourly earnings also rose for the June 2007 quarter, up $1.00 (5.9 percent) to $18.00, with increases of $0.97 for males (to $19.10) and $0.90 for females (to $16.78). Comparing female earnings with male earnings, the ratio of median hourly earnings was 87.9 percent, the highest since the survey began in 1997. Over the last 11 years, the ratio between male and female median hourly earnings has improved, from 83.0 percent in the June 1997 quarter to 87.9 percent in the June 2007 quarter.

All industry groups experienced increases in both average and median hourly earnings for people receiving income from wages and salaries. Significant increases in median hourly earnings occurred for the industries of education (10.5 percent); transport and storage, communication services (8.3 percent); health and community services (6.0 percent); and manufacturing (5.8 percent).

All occupation groups also experienced increases in both average and median hourly earnings for people receiving income from wages and salaries. Six out of the nine occupation groups had significant increases in median hourly earnings, of which four had increases of 5.0 percent or more: elementary occupations (8.1 percent); service and sales workers (6.1 percent); clerks (5.8 percent); and professionals (5.3 percent).

Graph, Median Hourly Earnings for Wage and Salary Earners By occupation.

Investment income

Investment income includes, but is not restricted to, interest from banks and other financial institutions, dividends from shares, and income received from stocks, managed funds, non-business related building rent and leased land.

Average (mean) weekly income from investments for all people was $50 in the June 2007 quarter, compared with $33 in the same period last year (up 51.8 percent). Income from investments was received by 38.0 percent of all people in the June 2007 quarter, compared with 32.4 percent in the June 2006 quarter.

Males received more weekly income from investments than females ($65 and $36, respectively), and the increase from the same quarter of the previous year also favoured males (a 65.5 percent increase compared with the 32.7 percent for females). There were more males than females receiving investment income for this June quarter.

The average weekly investment income for those receiving investment income was $137 (up 29.1 percent). Age groups with the highest average weekly investment income were the 60- to 64-year and the 55- to 59-year age groups ($265 and $232, respectively).

Average investment income varies with age. People approaching retirement age tend to have higher average investment incomes due to the length of time spent in the workforce building earnings to put towards investment. The 60- to 64-year age group received the highest average weekly investment income for all people of $133 (up from $88 in the 2006 June quarter), while the 55- to 59-year age group received an average weekly investment income of $112. The 65-and-over age group received an average amount of $89 per week.

Graph, Average Weekly Income from Investments for all People By age group.

Government transfers

Government transfers include income from benefits, family support, student allowances, Accident Compensation Corporation, New Zealand Superannuation, and veterans and war pensions. Since the introduction of the Working for Families package there has been an increase in the number of people who are eligible for government transfers, and this is reflected in an increase in the proportion of people receiving government transfer income in the New Zealand Income Survey.

 June quarter Working-age population (15 years and over)
who receive government transfers
(%)
 2005 27.3
 2006 29.5
 2007 31.9


A higher proportion of females (37.6 percent) received government transfer income than males (25.9 percent). Both of these proportions were higher than those recorded in the June 2006 quarter (35.3 and 23.5 percent, respectively).

Average (mean) weekly income from government transfers for all people was $75 for the June 2007 quarter (up $5), and males and females both increased by $5 (to $58 and $91 per week, respectively). For those receiving income from government transfers, average weekly income from this source in the June 2007 quarter was $242, compared with $244 in the June 2006 quarter. The median income from government transfers for this group rose from $239 in the June 2006 quarter to $243 in the June 2007 quarter.

People in paid employment are defined as those who receive income from wages and salaries and/or self-employment. People in paid employment had an average weekly income from government transfers of $27 in the June 2007 quarter, compared with $21 in the June 2006 quarter.

The average weekly income from government transfers for people not in paid employment was $168, compared with $165 for the same period last year. Of those people not in paid employment, the average income from government transfers was higher for those aged 65 years and over, compared with those aged 15- to 64-years of age. New Zealand Superannuation and veteran's pension recipients, on average, receive higher weekly income amounts than other types of government transfer recipients.

Self-employed earners

In the June 2007 quarter, the proportion of people receiving self-employment income remained unchanged from the June 2006 quarter at 11.4 percent. This group received an average (mean) weekly self-employment income of $868, up from $821 for the same period last year.
The 55- to 59-year and the 50- to 54-year age groups had the highest proportions of people earning a component of their total income from self-employment in the June 2007 quarter (20.7 and 20.5 percent, respectively).

Household income

The average (mean) weekly household income from all sources was $1,445 in the June 2007 quarter, an increase of 9.4 percent from the June 2006 quarter average of $1,321.  

 June quarter Average weekly household income
from all sources
($)
Annual change
(%)
 2002 1,115
 2003  1,170 5.0
 2004 1,203  2.8
 2005  1,260 4.7
 2006 1,321 4.8
 2007 1,445 9.4

Median weekly household income from all sources increased by $73, to $1,203 (up 6.5 percent).

For technical information contact:
Adele Dunleavy or Toni Kinzett
Wellington 04 931 4600
Email: info@stats.govt.nz

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