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Household Economic Survey: Year ended June 2013
Embargoed until 10:45am  –  28 November 2013
Commentary

All changes in this commentary are statistically significant unless otherwise specified.

Overview

Between the years ending 30 June 2010 and 30 June 2013 (2009/10 to 2012/13), average annual household income, for those receiving income from regular sources, increased from $76,733 to $85,588 (11.5 percent).

Over the same period, average annual personal income for those aged 15 years and over who were receiving income from regular sources, increased from $39,512 to $44,426 (12.4 percent).

Contributing to these increases were rises in income from wages and salaries, and New Zealand Superannuation and war pensions. The number of people earning income from these sources also increased.

Between the years ending 30 June 2010 and 30 June 2013, average weekly household expenditure increased by $93 (9.1 percent), to $1,111. This rise was largely driven by increases in spending on transport, housing and household utilities, and food.

Proportionally across the expenditure groups, spending remained unchanged from 2009/10 to 2012/13. Housing and household utilities continued to be the largest component, consuming one-quarter of net household spending, followed by food at nearly one-fifth.  

The graph below is interactive. Hover over data points to see exact values. Click the data bars to hide or show more detailed expenditure categories.

Note: This graph shows some expenditure only, and does not represent all expenditure collected in the survey.

 

 

Average household and personal income increases

Household income

Change over one year: From 2011/12 to 2012/13, average annual household income, for those receiving income from all regular sources, increased from $81,227 to $85,588 (up 5.4 percent). Over this same period, 76.0 percent of households had at least one member earning income from wages and salaries.

Change over three years: From 2009/10 to 2012/13, average annual household income, for those receiving income from all regular sources, increased from $76,733 to $85,588 (up 11.5 percent). This change was mainly due to increases in wages and salaries, and New Zealand Superannuation and war pensions. Over this same three-year period, the consumers price index (CPI) increased by 7.0 percent.

Graph, Average annual household regular income for those receiving income from this source, years ended 30 June 2010 to 2013.

For households receiving wages and salaries, average annual income increased from $75,526 to $84,462 (up 11.8 percent). The number of households receiving this source of income also increased (by 4.5 percent). Over the three years, the total number of households increased by 2.7 percent.

For households receiving New Zealand Superannuation and war pensions, average annual income rose from $20,652 to $22,380 (up 8.4 percent). As a result of the ageing population, the number of household receiving this income rose by 12.2 percent. During this time, there were also adjustments to New Zealand Superannuation payments.

Personal income

Changes over one year: From 2011/12 to 2012/13, average annual personal income, for those receiving income from all regular sources, increased from $41,639 to $44,426 (6.7 percent). For those receiving wages and salaries, average annual income from this source rose from $46,169 to $48,675 (5.4 percent).

Income from other government benefits consists of all government benefits except New Zealand Superannuation or war pensions. From 2011/12 to 2012/13, average annual personal income from other government benefits, for those receiving them, increased from $9,244 to $10,346. However, there was a 10.0 percent fall in the number of people receiving this income. 

Changes over three years: From 2009/10 to 2012/13, average annual personal income, for those receiving income from all regular sources, increased from $39,512 to $44,426 (12.4 percent). This change was driven by increases in wage and salary income, and New Zealand Superannuation and war pensions.

For people receiving wage and salary income, average annual income rose from $42,449 to $48,675. During the three years, the proportion of full-time wage and salary earners increased, while the proportion of part-timers decreased. These changes contributed to the increase in income from this source.

For people receiving New Zealand Superannuation and war pensions, income rose from $14,920 to $16,179. Over the three years, the number of people receiving this source of income increased 12.2 percent.

Household spending increases in some expenditure groups

The table below summarises household spending for 2009/10 and 2012/13.

Average weekly household expenditure
Years ended 30 June 2010(1) and 2013
 Expenditure type

 Average weekly household expenditure ($)

 Percentage change

Proportion of total net expenditure (%) 

 2010(1)

 2013

 2010 to 2013

 2010(1)

 2013

 Food

 177.50

 192.50

 8.4

 17.4

 17.3 

 Alcoholic beverages, tobacco, and illicit drugs

 29.30

 29.50

 0.9*

 2.9

 2.7

 Clothing and footwear

 30.30

 31.60

 4.5*

 3.0

 2.8

 Housing and household utilities

 251.60

 272.90

 8.5

 24.7

 24.6

 Household contents and services

 45.10

 48.80

 8.2*

 4.4

 4.4

 Health

 24.20

 27.10

 12.1*

 2.4

 2.4

 Transport

 131.00

 158.30

 20.8

 12.9

 14.2

 Communication

 35.60

 35.80

 0.4*

 3.5

 3.2

 Recreation and culture

 98.20

 107.20

 9.1

 9.6

 9.6

 Education

 16.60

 18.40

 10.8*

 1.6

 1.7

 Miscellaneous goods and services

 92.10

 101.70

 10.5

 9.0

 9.2

 Other expenditure

 107.90

 116.30

 7.8*

 10.6

 10.5

 Sales, trade-ins, and refunds

 -20.70

 -28.80

 38.9*

 -2.0

 -2.6

 Total net expenditure

 1,018.70

 1,111.40

 9.1

 100

 100

 1. Data for this year has been revised
 Symbol: * indicates movement is not statistically significant

   

Transport

The transport group contains expenditure on vehicle purchases, and private transport services and supplies. This includes spending on petrol, parking fees, and vehicle servicing, as well as passenger travel by air, sea, and rail.

In 2012/13, average weekly household expenditure on transport was $158, up 20.8 percent from 2009/10. This was largely driven by an increase in spending on petrol over the three years – from $41 a week in June 2010 to $49 in June 2013 (up 20.1 percent).

Transport showed the largest increase of all expenditure groups over the three years. The CPI showed a similar increase, with petrol prices up 23 percent for the three years.

Housing and household utilities

This group covers expenditure on rent, mortgage principal repayments, property maintenance and improvements, property rates, and household energy.

Average weekly household expenditure for this group increased by 8.5 percent, from $252 in 2009/10 to $273 in 2012/13. An increase in spending on electricity and property rates contributed to this change.

Food

Average weekly household expenditure on food increased by $15 in the three years between 30 June 2010 and 30 June 2013, from $178 to $193. Contributing to this change were increases in fruit and vegetables (11.4 percent), ready-to-eat food (21.8 percent), and non-alcoholic beverages (12.6 percent).

Changes in housing costs

Housing costs include expenditure on rent and mortgages (both principal and interest payments), property rates, and building-related insurance.

For the following subsections, housing costs sourced from the expenditure diary were removed for the analysis. This makes housing-cost expenditure data comparable with data collected in 2010/11 and 2011/12.

Mortgage payments

Mortgage payments include principal repayments, interest payments, and application and service fees for mortgages.

Change over one year: From 2011/12 to 2012/13, average weekly mortgage payments decreased slightly for household with mortgages, from $357 to $356. This change included lower mortgage interest payments. This was similar to 2009/10, where mortgage interest payments also dropped. None of these changes was statistically significant.

Change over three years: Over the three years from 2009/10 to 2012/13, average weekly mortgage payments rose from $352 to $356. Mortgage principal repayments also increased slightly, from $137 to $149 in 2012/13. Neither of these changes was statistically significant.

Over the three years, the official cash rate set by the Reserve Bank of New Zealand fell from 3.0 percent in July 2010 to 2.5 percent in March 2011. It has remained at 2.5 percent since then.

Change over six years: The graph below shows the clear trend over six years towards a greater proportion of mortgage payments being allocated to paying off the principal. 

Graph, Proportions of mortgage expenditure spent on principal and interest payments, year ended 30 June 2007 to 2013.

Rent

Rent payments include rent paid for primary property, rent paid for other properties, and other payments connected with renting, such as rental bonds, administration fees, ground rent, and easements.

Change over one year: For households paying rent, their average weekly expenditure on rent increased slightly – from $273 in 2011/12 to $275 in 2012/13. This slight change is not statistically significant.

Change over three years: For households paying rent, average weekly rent payments increased from $242 to $275 over the three years from 2009/10 to 2012/13. This 13.7 percent increase was mainly driven by an increase in rent rather than associated rental costs.

Note: HES does not collect rent payments made by businesses, including insurance companies. For example, if EQC or an insurance company is paying rent for a household, this is not collected.

See data quality for more information on the scope, coverage, and collection time for HES.

Housing-costs-to-income ratio

The housing-costs-to-income ratio was largely unchanged. This ratio is calculated by dividing total housing costs for all households by total regular income for all households. It is often used as a measure of housing affordability.

In 2012/13, total housing costs accounted for 15.4 percent of total household income from regular sources. This compares with 16.0 percent in 2011/12, 16.4 percent in 2010/11, and 15.5 percent in 2009/10. The decrease in the ratio in 2012/13 was a result of total housing costs having a smaller increase than total income.

When interpreting these figures, differences in the structure of the HES (Income) and full HES questionnaires need to be considered. These differences may affect the comparability of mortgage and loan expenditure data between the full HES and HES (Income) years. These differences particularly affect the comparability of total housing-cost figures, of which mortgages are a significant part. The differences are not adjusted for in this release.

In 2012/13, 35.5 percent of households that did not own their dwelling spent more than 30 percent of their household income on their housing costs, with 23.1 percent spending more than 40 percent. In contrast, 11.9 percent of those who owned, or partly owned, their dwelling spent 30 percent or more of their household income on housing costs, and 5.6 percent spent 40 percent or more.

Note: The numbers for those who own, or partly own, their dwelling include those who have paid off their mortgage and thus have reduced housing costs. Also, the ratios are not mutually exclusive. For example, households that pay 30 percent or more of their household income on housing costs are also included in the 25 percent or more category.

 

Graph, Housing costs as a percentage of household income, year ended 30 June 2013.

Life satisfaction and adequacy of income

One person over 18 years of age in every household was randomly selected to complete the Economic Living Standards Index questionnaire on behalf of the household. This person was asked:

  • how satisfied they were with their life at the time of the interview
  • how adequately their income met their everyday needs.

This questionnaire was updated for 2012/13.

See data quality for details of how these questions have changed.

Life satisfaction

In the year ended 30 June 2013, most people were satisfied or very satisfied with their lives:

  • 76 percent of respondents were satisfied or very satisfied.
  • 9 percent were dissatisfied or very dissatisfied.
  • 15 percent were neither satisfied nor dissatisfied.

     
    Graph, Household life satisfaction, year ended 30 June 2013.

Adequacy of income

Fifty-seven percent of respondents reported their income was enough or more than enough to meet their everyday needs. They were asked about their capacity to spend money on accommodation, food, clothing, and other necessities. In contrast, 43 percent said their income was just enough or not enough to meet their everyday needs.

Where household income was in the lowest 20 percent of the population, 64 percent of respondents said their income was not enough or only just enough to meet their everyday needs. Where household income was in the highest 20 percent of the population, only 20 percent of respondents said their income was not enough or only just enough to meet their everyday needs.

Graph, Adequacy of income to meet everyday needs, by annual household income quintile, year ended 30 June 2013.

For more detailed data see the Excel tables in the 'Downloads' box.

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