21 May 2010

Canberra's fat cats getting fatter

| johnboy
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The Canberra Times brings word that new Bureau of Statistics data shows the average Canberra wage has shot further forward to more than $75,000 a year.

This is particularly impressive for a Territory generally lacking in the super-wealthy that drags the average up in most of the States.

At the heart of it increases in public service pay are far outstripping the private sector.

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georgesgenitals6:23 am 24 May 10

JC said :

I think a 12sq, 10 year old home in Dunlop (worth $450,000) is entry level! I cannot immagine what a 3 bed worth $350k or less would be.

There are also one bedroom units that can be bought for around $150k. This is what entry level is all about. A 10 year old home is not, to my mind, entry level.

The point I want to make, though, is that people seem to think our parents (yes, I’m at the tail end of Gen X), were able to buy a nice 3-4 bedroom home when they felt like it, and that’s not the case. They were better savers than us, lived much more simply than us, were willing to wait lonegr and sacrifice more. They didn’t expect to have a rock-star lifestyle. They bought if and when they could, and a generation later those then outer suburban homes are now very desirable.

I’m not saying we need to copy what they did, but there’s definitely some wisdom there.

Mr_Shab said :

Why all the wailing and gnashing of teeth about wages in Canberra? It’s a very white-collar city. There is a much higher proportion of salary-and-wage earners who have limited scope to hide their earnings. There are far fewer low-paid semi-skilled industrial jobs. There are far fewer independant contractors and small businesses (who can hide the money they earn far more easily). Essentially, we don’t have a big top end or bottom end.

We’re a (at times painfully) prolaterian city. This is what socialism looks like, people.

Well said Mr_Shab, the point you made about hiding income was exactly what I was getting at in my first post. I always find it funny when you read the income stats for Sydney and you see suburbs such as those in the east and the north shore and they are always well below the national average. Yet still live in mult milion dollar houses and drive luxury cars. Certainly makes you wonder.

About the only tax minimisation things most Canberra pubes has access to is salary sacrifice of a car or maybe an investment property.

Why all the wailing and gnashing of teeth about wages in Canberra? It’s a very white-collar city. There is a much higher proportion of salary-and-wage earners who have limited scope to hide their earnings. There are far fewer low-paid semi-skilled industrial jobs. There are far fewer independant contractors and small businesses (who can hide the money they earn far more easily). Essentially, we don’t have a big top end or bottom end.

We’re a (at times painfully) prolaterian city. This is what socialism looks like, people.

I think a 12sq, 10 year old home in Dunlop (worth $450,000) is entry level! I cannot immagine what a 3 bed worth $350k or less would be.

georgesgenitals11:58 pm 22 May 10

Houses are definitely more expensive than they used to be, for sure. However, other costs are cheaper. Cars, electronics and whitegoods, for example. We also have a lot more ‘stuff’ than ever before.

I disagree that 4-500k is entry level, though – allhomes lists three 3 bedroom homes at $350k or less. As far as family homes go, that’s more the entry level.

Given efficiency dividends, budget pressures, etc and the general anti-public service rhetoric from the current group in charge (a huge change from the previous administration?) there’s not much in the kitty for public service wage rises in most agencies. If the answer is in the public sector then look to the vast numbers of contractors and ‘consultants’ in some agencies with growing numbers in the SES band.

georgesgenitals said :

Compared to almost all the rest of the world’s population, $75,000 per year is a LOT. Why do we keep trying to justify pay in terms of house cost?

Why? Because a number is simply irrelevant, what is relevant is how much that money can buy.

To illustrate when I brought my house in 2000 it cost me $150,000 on a $60,000 income or in other words the house was about 2.5 times my annual income. My income is now about $95,000 but the same house is now valued at about $450,000 which is over 4 times my income. Therefore even though my income is now higher in terms of what it can buy the value has decreased quite a lot.

georgesgenitals said :

Clown Killer said :

Compared to almost all the rest of the world’s population, $75,000 per year is a LOT. Why do we keep trying to justify pay in terms of house cost?

Because we don’t live in dirt floored huts and catch or grow our dinner. We live in a particularly pricy part of a first world economy and, frankly, that luxury comes at a cost.
An annual salary of $75,000 works out at roughly $57,000 a year after tax (not allowing for deductions and other financial management wizardry). That’s around $4750 a month give or take. Assuming you were able to save enough of a deposit and you have bought a modest house for $500,000 you’re paying around $3200 a month in repayments (with interest at something like 6.5%) – that leaves you $1550 a month for food, insurance, transport, electricity, rates, water, phone and all of life’s other expenses.
It’s not a lot.

Fair enough – I accept that buying a $500k house on a single average income would be pretty tough. Of course, there are other options rather than jumping in and buying a $500k house first up.

$4-500K is an entry level house these days.

georgesgenitals said :

Of course, there are other options rather than jumping in and buying a $500k house first up.

I thought the trailer park near Fyshwick was closing down…

For a start comparing average salaries between states is useless, particularly comparing somewhere like Canberra with a population of 350k odd with states like NSW with a population of 7 million odd. The average salary will also be increased by the other statistic that the ABS likes to show, the fact that Canberrans are the most highly educated in Australia. I’m fairly sure if the other states became educated at similar levels, that their average salaries would increase to above what it is here.

The Clown Killer is absolutely correct, $75k p.a. doesn’t get you much in Canberra. Even if you purchased a property for $400k, the repayments would take a large proportion of your take-home salary. $75k is about the salary of an APS6, I don’t think anyone is ever going to be able to get rich on that salary anytime soon.

georgesgenitals9:10 pm 21 May 10

Clown Killer said :

Compared to almost all the rest of the world’s population, $75,000 per year is a LOT. Why do we keep trying to justify pay in terms of house cost?

Because we don’t live in dirt floored huts and catch or grow our dinner. We live in a particularly pricy part of a first world economy and, frankly, that luxury comes at a cost.
An annual salary of $75,000 works out at roughly $57,000 a year after tax (not allowing for deductions and other financial management wizardry). That’s around $4750 a month give or take. Assuming you were able to save enough of a deposit and you have bought a modest house for $500,000 you’re paying around $3200 a month in repayments (with interest at something like 6.5%) – that leaves you $1550 a month for food, insurance, transport, electricity, rates, water, phone and all of life’s other expenses.
It’s not a lot.

Fair enough – I accept that buying a $500k house on a single average income would be pretty tough. Of course, there are other options rather than jumping in and buying a $500k house first up.

Clown Killer6:46 pm 21 May 10

Compared to almost all the rest of the world’s population, $75,000 per year is a LOT. Why do we keep trying to justify pay in terms of house cost?

Because we don’t live in dirt floored huts and catch or grow our dinner. We live in a particularly pricy part of a first world economy and, frankly, that luxury comes at a cost.
An annual salary of $75,000 works out at roughly $57,000 a year after tax (not allowing for deductions and other financial management wizardry). That’s around $4750 a month give or take. Assuming you were able to save enough of a deposit and you have bought a modest house for $500,000 you’re paying around $3200 a month in repayments (with interest at something like 6.5%) – that leaves you $1550 a month for food, insurance, transport, electricity, rates, water, phone and all of life’s other expenses.
It’s not a lot.

georgesgenitals4:48 pm 21 May 10

JC said :

$75,000 in this day and age is sweet stuff all, especially when the average house is now over $500,000 and average mortgage re-payments these days is in the vicinity of $2500p/m.

Maybe the reason the ACT is so high is because many of us don’t have access to schemes to reduce our tax as much as other states.

Compared to almost all the rest of the world’s population, $75,000 per year is a LOT. Why do we keep trying to justify pay in terms of house cost?

$75,000 in this day and age is sweet stuff all, especially when the average house is now over $500,000 and average mortgage re-payments these days is in the vicinity of $2500p/m.

Maybe the reason the ACT is so high is because many of us don’t have access to schemes to reduce our tax as much as other states.

Woody Mann-Caruso3:27 pm 21 May 10

From the APSC:

At June 1995, the APS 1–2 classification group accounted for 23.3% of ongoing staff. By June 2009, the APS 1–2 level had fallen to just 3.8% of all ongoing employees. Representation of Executive Level employees has risen from 15.5% to 26.1% over the same period. The proportional increase in the size of the SES during 2008–09 (5.4%) was considerably larger than the growth in the APS overall (1.6%).

georgesgenitals3:00 pm 21 May 10

Marvin_78 said :

I am 32, I have a degree and I don’t work for the government. I am earning well below $75,000… I must start looking for a job that will pay me an “average” wage.

It seems you have a choice to make then.

Marvin_78 said :

I don’t work for the government.

Well there’s your problem.

4% increase a year baby…..4%!

removing lower level jobs (which has simply resulted in ‘classification creep’) has pushed wages up bigtime I would suggest. What a secretary gets paid nowadays to answer a telephone and maintain an electronic diary is incredible. And let be honest, some of them do more than that, but they are the minorty. Just my humble opinion.

screaming banshee12:06 pm 21 May 10

Makes me wonder how many ‘levels’ of employees there are in the pubic service.

A little while back a bank, ANZ I think, looked at their workforce and identified in some areas of the business there were 15 supervisory/management/responsibility levels between the biggest boss and the lowest sh!tkicker. They swept through the business and left area of the business with more than 5 levels from CEO to pleb.

It would be interesting to see just how many levels there are on that basis and how many little empires could be brought down with similar rationalisation.

Anyone care to venture a guess.

Is there a point being made here or are we just perpetuating the myth that Canberra is rolling in money at the expense of the rest of the country?

I am 32, I have a degree and I don’t work for the government. I am earning well below $75,000… I must start looking for a job that will pay me an “average” wage.

Clown Killer11:28 am 21 May 10

I doubt that there’d be anyone in my organisation that would earn less than that.

georgesgenitals11:00 am 21 May 10

Make that “major international players”…

georgesgenitals10:59 am 21 May 10

With government, it’s probably more to do with public servants changing role and level, and having increasing number of people at higher levels.

Don’t forget that there are a reasonable number of people who work for private organisations that pay fairly well. Canberra has large offices of a number of major internal players, many of whom pay people with 5-10 years experience 6 figure salaries, plus bonuses. Trends of having service delivery from these organisations staffed from Canberra rather than elsewhere puts upward pressure on the average number.

Which parts of the public service are getting these massive pay rises, exactly? Clearly, I’m in the wrong department :/

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