Australia’s highest and lowest income suburbs have been revealed in new data released by the Australian Taxation Office.
The data, based on nearly 15m tax returns from 2019-20, reveals the median income and super balances of Australians in each postcode across the country.
Eight of the country’s highest-earning postcodes are in Sydney, according to the data, while five of the lowest-earning postcodes are based in regional New South Wales.
Western Australia’s Cottesloe and Peppermint Grove, both within the 6011 postcode, easily took first place on the list of high-income postcodes in 2019-20 with an average taxable income of $325,343.
They were followed by Sydney postcode 2027, containing the high-income suburbs of Darling Point and Edgecliff which have an average taxable income of $205,957.
In third place was another Sydney postcode – 2023, containing Bellevue Hill – which trailed closely behind with an average taxable income of $195,204.
Analysis of the ATO data by the Australia Institute reveals that of the country’s highest earners, there were 60 people who earned more than $1m in the 2019-20 financial year and paid zero income tax.
These individuals had an average income of $3.5m each.
Matt Grudnoff, a senior economist with the Australia Institute, said there were many ways “some individuals [are] able to exploit the tax system”.
He said people can claim managing their own tax affairs, as well as litigation costs for managing their own tax affairs, as an allowable tax deduction.
“Our taxation system is full of complexity and the latest tax statistics show that some people on very large incomes are able to pay very smart people very large sums of money to take advantage of that complexity to reduce the amount of tax they have to pay,” Grudnoff said.
“Some people earning a million dollars or more paid on average $80,000 each to manage their tax affairs, which reduced their taxable income below the tax-free threshold.
“This highlights the need in Australia for a Buffett rule which sets a minimum rate of tax based on people’s gross income. This would prevent high-income earners from using lots of deductions to avoid paying tax.”
The average taxable income for Australians rose by just 2.1% compared to the previous tax year, bringing the figure up to $63,882.
Grudnoff said that despite this small increase, and stagnant wages across the country, “those who earn their income through profit are actually doing very, very well”.
Meanwhile, average taxable incomes were negative for a number of regional NSW postcodes among Australia’s lowest average income earners.
The NSW town of Gurley (postcode 2398) had Australia’s lowest average taxable income or loss of -$23,484.
It was closely followed by the NSW postcodes 2386 (Burren Junction, Drildool, Nowley) with an average taxable income or loss of -$17,794, and the postcode 2405 (Boomi, Garah) with -$14,763.
Six of the 10 lowest-earning postcodes were in the negative for 2019-20.
Grudnoff said while incomes did tend to remain lower in regional and rural areas, negative taxable incomes can be caused by a number of factors, including large losses throughout the year or through maximising deductions.
He also said it was important to remember the ATO data was for taxable income only, so would exclude those not submitting tax returns, such as age pensioners.
Meanwhile, men continued to earn more than women with an average taxable income of $74,559 versus $52,798.
“More needs to be done in that area to close that income divide,” Grudnoff said, which he described as a “product of our society”.
Pay increases for aged care workers, who are predominantly women, and a focus on childcare and childcare workers could help close the gap.
“There are a number of positives that are in the pipeline but they always seem to be in the pipeline, but what we actually need to see is concrete results,” Grudnoff said.
“We’ll see those results in the statistics, but we’re just not seeing that yet.”
Doctors were among the country’s highest earners, with surgeons bringing in an average taxable income of $406,068, anaesthetists $388,814 and internal medicine specialists $310,848.
Hospitality workers continue to be named among Australia’s lowest earners, with apprentice hospitality workers bringing home an average taxable income of $19,877, fast-food cooks $20,447, and apprentice trainees in sport and recreation $20,447.
