Current Issues Brief 13 1998-99

Taxable Income and Tax Paid in Commonwealth Electoral Divisions, 1996-97

Stephen Barber and Andrew Kopras
Statistics Group
1 June 1999

Introduction
Major findings
Endnotes
Table 1-Taxation Statistics by Commonwealth Electoral Division
Table 2-Commonwealth Electoral Divisions ranked by Taxable Individuals
Table 3-Commonwealth Electoral Divisions ranked by Total Taxable Income
Table 4-Commonwealth Electoral Divisions ranked by Mean Taxable Income
Table 5-Commonwealth Electoral Divisions ranked by Net Tax
Table 6-Commonwealth Electoral Divisions ranked by Mean Total Tax
Table 7-Commonwealth Electoral Divisions ranked by Effective Rate of Tax
Glossary
Bibliography

Introduction

This paper provides taxation information for each Commonwealth Electoral Division (CED). The information shown includes such categories as the number of taxpayers, the taxable income of taxpayers and the amount of tax paid by taxpayers. Tables have also been produced that rank the CEDs against some of these categories.

The information shown in the following tables has been derived from information published at the postcode level by the Australian Taxation Office (ATO). The allocation of postcodes to CEDs, or the concordance, is based upon results from the 1996 Census of Population and Housing, although the CEDs are as at the 1998 election. When a postcode falls entirely within a CED, the published information is wholly included within the CED. When a postcode is dissected by CED boundaries the results for the postcode are proportioned between the CEDs based upon the percentages of the population of that postcode that reside in each CED.(1)

The tax data shown in the tables were compiled by the ATO from individual tax return forms for the 1996-97 income year which were processed during the 1997-98 financial year. The postcode information published by the ATO is for the postcode stated in the home address on each tax return. If a postcode is not stated or, if stated, is not a valid postcode, ie no such postcode exists, the information is classified as unallocated within the State or Territory that the tax return was processed.(2) In the processing of postcodes to CEDs, postcodes not identified within the 1996 Census, e.g. not in existence at the time of the Census, have also been classified as unallocated.

Major findings

Table 1, Taxation Statistics by Commonwealth Electoral Division, shows various categories of tax information for the 1996-97 income year for each CED, listed alphabetically by State/Territory. This information shows that the ACT has the highest average (mean) taxable income ($36 237) followed by the Northern Territory ($33 397) and NSW ($33 123). As would be expected, the ACT ($9562) pays the highest average (mean) tax. However, the average tax paid in NSW ($8463) is higher than that paid in Northern Territory ($7860). This is probably due to the combined effects of NSW paying more tax (proportionately) in the top income tax bracket, NSW having a higher average (mean) imputation credit and taxpayers in the Northern Territory having greater access to tax rebates such as zone allowances. Northern Territory's position as a low income tax paying region is further emphasised by its low effective tax rate (23.5 per cent). Victoria is just below the income, tax and tax rates of Australia as a whole, while Tasmania is the bottom State.

Table 2, Commonwealth Electoral Divisions ranked by Taxable Individuals, shows the electorates with the largest elector enrolments-Canberra (ACT), Fraser (ACT) and Northern Territory-appearing at the top of this table.(3) Also, there is no surprise that four Tasmanian electorates are among the bottom five electorates and the fifth Tasmanian electorate takes up the eighth bottom position; Tasmania electorates are the smallest in the country with an average enrolment of just over 66 000.(4)

However, just the size of the electorates, as measured by the number of electors, is not the complete story. If the ratio of taxpayers to electors is also considered a further picture emerges. The top ten electorates have, on average, 7.9 taxpayers for every 10 electors enrolled and the North Sydney (NSW) electorate has 8.7. The bottom ten electorates have only 5.6 taxpayers per 10 electors and Paterson (NSW) has only 5.(5) The Australian average is 6.8 taxpayers per 10 electors. Probable reasons for the differences between top and bottom electorates include

• the top ten electorates are predominantly inner metropolitan. These electorates tend to have lower unemployment levels and more two income families
• the predominant classification applied to the bottom ten electorates is rural. Some of these electorates, such as Cowper, Paterson and Lyne, all coastal northern NSW, also include large numbers of retired people. In fact, the bottom half of this table is dominated by rural (and provincial) electorates.

Table 3, Commonwealth Electoral Divisions ranked by Total Taxable Income, shows similar patterns to table 2 and is influenced by two factors, firstly, the number of taxpayers and, secondly, the size of the incomes of those taxpayers. The ATO states that:

An obvious example of the effect of income sizes-whether incomes are generally higher or lower relative to other electorates-is the re-ordering of electorates throughout this table in comparison with table 2. At the top of the table, the generally higher incomes of the north shore and eastern suburbs areas of Sydney and the eastern suburbs of Melbourne have caused these electorates to displace the ACT and Northern Territory electorates, which have higher numbers of taxpayers. The general income sizes of electorates are shown in table 4.

Table 4, Commonwealth Electoral Divisions ranked by Mean Taxable Income, shows an income spread from just over $24 700 in Cowper to just under $51 900 in Bradfield (NSW). Mayo (SA) and Dawson (Qld) are the electorates in the middle of the table with average incomes around $29 800. NSW dominates the top ten electorates with six, Victoria has three and WA has one.

As mentioned above, unemployment levels have an important effect on the number of taxpayers and the level of income. In September 1997, Bradfield, North Sydney and Wentworth (NSW) were estimated to have unemployment rates of 1.8 per cent, 3.0 per cent and 3.3 per cent respectively.(7) At the other end of the rankings, Cowper, Richmond (NSW) and Fairfax (Qld) had unemployment rates of 13.4 per cent, 14.1 per cent and 12.6 per cent respectively. At this same time the national unemployment rate was 8.5 per cent.

Cowper and Richmond are situated on the north coast of NSW while Fairfax takes in the Sunshine Coast of Queensland and the hinterland. Apart from high unemployment levels these areas are all rural electorates that also have high levels of retired people. The combination of these factors would help explain their low levels of average taxable incomes.

Table 5, Commonwealth Electoral Divisions ranked by Net Tax, shows the net individual income tax paid on the total taxable income of each electorate. North Sydney, at the top, paid over $1 billion in tax in 1996-97, Cowper, at the other end, paid $200 million. The effect of marginal tax rates(8) is evident here because North Sydney only has 1.8 times the taxpayers of Cowper yet has 3.5 times the taxable income and pays 5.1 times net tax. The average taxable income in North Sydney attracts a marginal tax rate of 43 per cent, the average taxable income in Cowper a marginal rate of 34 per cent. This result is further emphasised when looking at the effective (or average) rate of tax shown in table 7.

Table 6, Commonwealth Electoral Divisions ranked by Mean Total Tax, shows the average tax paid by the taxpayers in the electorate. Total tax, where total tax is net tax plus imputation credit, is used to derive the information shown in this table. The imputation credit is included because dividends received by taxpayers from companies are assessable income and, although tax has already been paid by the companies, this amount of tax would have been payable by the taxpayers.(9) The electorates with the highest average taxable incomes, as shown in this table, are also the electorates that have very high levels of imputation credit (see table 1), reflecting levels of share ownership by the higher income groups.

The average tax paid per taxpayer varied from $5000 in Cowper to $16 800 in Bradfield with the tax paid in the middle ranking electorates of inner metropolitan Stirling (WA) and outer metropolitan Calwell (Vic) of just under $7000.

Table 7, Commonwealth Electoral Divisions ranked by Effective Rate of Tax, shows the average (mean) rate of tax paid on the taxable income. At the top of the rankings 32 per cent, or nearly a third, of income is paid in tax compared with the bottom where 20 per cent, or a fifth, of income is tax.

Endnotes

1. The percentages used in the allocation of postcodes to Commonwealth Electoral Divisions can be found in 'Postcodes In Electoral Divisions', (see the bibliography).
2. It is possible for a valid postcode not to be a valid residential postcode, e.g. post office box postcodes. Also, for confidentiality reasons, postcodes with less than 100 taxpayers (non taxables plus taxables) are also classified as unallocated.
3. At the 1998 Federal election, the number of electors enrolled for these electorates were Canberra 105 359, Northern Territory 105 048 and Fraser 104 177.
4. The average enrolment in Australia is over 82 100.
5. A list of electorates and the number of electors enrolled at the 1998 election can be found in 'Federal Elections 1998' (see the bibliography).
6. Australian Taxation Office, Taxation Statistics, 1996-97, A Summary of Taxation, Superannuation and Child Support Statistics, p. 15.
7. Estimates of unemployment rates by electoral division are produced by the Statistics Group of the Department of the Parliamentary Library from data published in Small Area Labour Markets by the Department of Employment, Workplace Relations and Small Business. For more information on the methodology involved in producing the unemployment rates for electorates see A. Kopras and T. Kryger, 'Estimated Unemployment Rates by Electorate, December Quarter 1997', Research Note No. 46, 1997-98, Information and Research Services, Department of the Parliamentary Library.
8. The marginal rate of tax is the rate of tax that is paid on the last dollar earned. See the glossary for the 1996-97 income tax rates scale.
9. Dividends that are taxed at the company level and then distributed to taxpayers are also accompanied by imputation credit equal to the amount of tax paid. Since dividends are assessable income but the dividends received are net dividends, i.e. net of tax, the amount of dividend that is assessed as income (or added to any existing taxable income) is the net dividend plus the imputation credit. Tax is calculated on the total taxable income and then reduced by the amount of imputation credit.

Table 1-Taxation Statistics by Commonwealth Electoral Division

Electoral Division	Non-taxables	Taxables	Taxable Incomes	Mean taxable income	Total imputation credit		Net tax	Mean total tax	Effective rate of tax
	Number	Number	$ million	$	Number	$ million	$ million	$	%
New South Wales
Banks	8,418	52,271	1,688	32,288	7,524	15	403	7,989	24.7
Barton	9,714	58,977	1,914	32,459	8,055	21	457	8,104	25.0
Bennelong	10,052	61,815	2,283	36,940	12,319	35	586	10,049	27.2
Berowra	10,902	67,561	2,636	39,018	15,448	49	692	10,967	28.1
Blaxland	9,134	50,336	1,440	28,598	4,290	7	321	6,512	22.8
Bradfield	10,846	63,122	3,273	51,855	23,413	136	925	16,818	32.4
Calare	10,890	49,290	1,477	29,967	6,609	12	338	7,117	23.7
Charlton	9,741	49,776	1,545	31,049	6,956	13	362	7,529	24.2
Chifley	8,444	57,189	1,681	29,392	3,418	3	382	6,733	22.9
Cook	8,989	59,535	2,128	35,743	10,501	39	528	9,518	26.6
Cowper	13,669	41,683	1,031	24,732	5,561	10	201	5,049	20.4
Cunningham	9,196	48,244	1,615	33,485	10,339	16	397	8,570	25.6
Dobell	10,808	53,095	1,560	29,383	6,476	15	348	6,828	23.2
Eden-Monaro	11,633	47,537	1,330	27,982	7,009	15	283	6,276	22.4
Farrer	11,948	48,859	1,338	27,386	9,088	14	280	6,023	22.0
Fowler	8,601	55,892	1,586	28,375	3,368	5	352	6,387	22.5
Gilmore	10,904	44,283	1,252	28,264	7,079	15	267	6,381	22.6
Grayndler	9,668	65,069	2,073	31,857	6,136	11	504	7,916	24.8
Greenway	8,771	58,780	1,822	31,003	5,227	6	430	7,421	23.9
Gwydir	12,478	42,677	1,219	28,567	5,715	12	260	6,372	22.3
Hughes	8,777	64,898	2,265	34,898	8,720	20	571	9,104	26.1
Hume	11,852	44,966	1,229	27,324	6,766	12	256	5,949	21.8
Hunter	9,782	46,044	1,582	34,357	5,712	13	403	9,030	26.3
Kingsford-Smith	9,850	62,435	2,071	33,165	8,346	23	505	8,462	25.5
Lindsay	8,865	61,243	1,940	31,679	5,934	9	463	7,717	24.4
Lowe	10,084	60,175	2,128	35,361	9,736	28	539	9,422	26.6
Lyne	13,106	42,870	1,107	25,833	7,195	14	219	5,426	21.0
Macarthur	10,103	63,855	2,032	31,816	6,967	21	481	7,858	24.7
Mackellar	9,671	64,892	2,443	37,653	12,879	66	612	10,444	27.7
Macquarie	9,891	55,626	1,750	31,464	6,521	13	412	7,651	24.3
Mitchell	9,780	61,600	2,346	38,087	11,819	40	613	10,602	27.8
Newcastle	8,811	44,745	1,451	32,437	7,753	18	347	8,162	25.2
New England	12,395	45,014	1,239	27,516	6,711	16	259	6,104	22.2
North Sydney	9,363	76,210	3,625	47,565	20,303	98	1,033	14,841	31.2
Page	13,097	43,110	1,086	25,182	5,148	8	217	5,202	20.7
Parkes	11,185	47,905	1,385	28,914	6,551	10	302	6,511	22.5
Parramatta	9,395	59,782	1,964	32,852	8,483	16	476	8,230	25.1
Paterson	9,552	40,998	1,259	30,721	6,406	14	290	7,412	24.1
Prospect	8,035	51,280	1,478	28,822	3,809	6	333	6,597	22.9
Reid	9,896	55,359	1,576	28,463	4,452	5	351	6,431	22.6
Richmond	13,586	47,796	1,199	25,096	7,051	15	233	5,188	20.7
Riverina	11,150	55,634	1,602	28,786	8,367	14	347	6,484	22.5
Robertson	9,890	49,959	1,507	30,155	6,950	15	340	7,105	23.6
Shortland	9,245	44,588	1,387	31,104	6,544	13	324	7,555	24.3
Sydney	9,013	73,538	2,954	40,167	11,112	58	795	11,595	28.9
Throsby	8,537	45,811	1,457	31,813	8,781	10	352	7,901	24.8
Warringah	9,161	66,060	2,981	45,118	16,319	93	815	13,746	30.5
Watson	10,267	55,848	1,607	28,777	5,524	9	359	6,593	22.9
Wentworth	9,645	71,788	3,358	46,770	16,590	150	905	14,690	31.4
Werriwa	8,056	56,541	1,727	30,548	4,373	8	402	7,238	23.7
Unallocated NSW	4,359	23,489	795	33,865	3,213	12	194	8,757	25.9
Total NSW	511,205	2,760,050	91,421	33,123	419,566	1,296	22,061	8,463	25.5

Table 1-Taxation Statistics by Commonwealth Electoral Division continued

Electoral Division	Non-taxables	Taxables	Taxable Incomes	Mean taxable income	Total imputation credit		Net tax	Mean total tax	Effective rate of tax
	Number	Number	$ million	$	Number	$ million	$ million	$	%
Victoria
Aston	10,095	60,573	1,935	31,940	11,663	15	462	7,871	24.6
Ballarat	11,312	48,134	1,319	27,413	8,876	14	278	6,056	22.1
Batman	9,845	55,268	1,567	28,359	6,438	7	348	6,425	22.7
Bendigo	11,522	46,684	1,227	26,274	8,619	10	248	5,533	21.1
Bruce	11,384	60,089	1,845	30,707	11,915	18	426	7,396	24.1
Burke	10,196	53,668	1,664	31,007	7,251	10	392	7,474	24.1
Calwell	9,241	56,855	1,686	29,648	6,095	7	388	6,958	23.5
Casey	10,360	57,415	1,716	29,881	9,490	15	389	7,041	23.6
Chisholm	11,164	60,171	1,978	32,877	15,077	27	468	8,238	25.1
Corangamite	11,468	48,838	1,418	29,027	9,957	21	307	6,711	23.1
Corio	10,193	51,187	1,508	29,458	7,334	11	341	6,879	23.4
Deakin	10,415	58,197	1,840	31,623	12,831	20	427	7,673	24.3
Dunkley	10,196	53,550	1,650	30,819	10,036	26	372	7,436	24.1
Flinders	11,871	49,433	1,401	28,338	9,518	22	294	6,407	22.6
Gellibrand	9,328	51,776	1,534	29,619	5,928	8	350	6,903	23.3
Gippsland	13,999	45,439	1,182	26,008	8,633	12	241	5,565	21.4
Goldstein	10,770	65,423	2,594	39,653	19,482	77	663	11,310	28.5
Higgins	9,771	66,340	2,979	44,910	20,915	126	787	13,760	30.6
Holt	9,691	57,824	1,667	28,824	6,164	7	373	6,568	22.8
Hotham	10,115	56,483	1,660	29,398	9,109	12	373	6,820	23.2
Indi	12,967	50,316	1,350	26,830	9,080	13	278	5,789	21.6
Isaacs	9,154	55,098	1,666	30,246	8,247	13	379	7,127	23.6
Jagajaga	10,285	60,156	2,049	34,056	12,989	27	501	8,779	25.8
Kooyong	10,235	63,390	2,810	44,322	22,735	104	746	13,412	30.3
Lalor	8,958	56,532	1,742	30,815	6,545	4	409	7,306	23.7
La Trobe	9,756	58,911	1,818	30,856	9,034	17	421	7,431	24.1
Mallee	11,922	47,319	1,264	26,718	9,863	9	249	5,458	20.4
Maribyrnong	10,131	56,161	1,649	29,357	6,990	9	375	6,830	23.3
McEwen	10,691	52,703	1,546	29,327	7,682	14	346	6,830	23.3
McMillan	11,920	48,652	1,408	28,945	8,454	10	316	6,695	23.1
Melbourne	9,739	64,362	2,208	34,306	10,926	27	557	9,087	26.5
Melbourne Ports	8,557	61,785	2,338	37,848	13,989	45	607	10,551	27.9
Menzies	10,807	58,255	2,015	34,583	15,409	36	494	9,094	26.3
Murray	12,827	53,438	1,376	25,742	9,922	12	276	5,390	20.9
Scullin	9,259	55,893	1,610	28,801	5,951	4	363	6,575	22.8
Wannon	12,240	48,089	1,239	25,765	9,573	13	250	5,473	21.2
Wills	10,329	57,170	1,699	29,713	8,180	11	386	6,945	23.4
Unallocated Vic	5,086	19,437	544	28,013	3,892	7	116	6,315	22.5
Total Victoria	397,799	2,071,014	64,700	31,241	384,792	840	14,998	7,647	24.5

 

Table 1-Taxation Statistics by Commonwealth Electoral Division continued

Electoral Division	Non-taxables	Taxables	Taxable Incomes	Mean taxable income	Total imputation credit		Net tax	Mean total tax	Effective rate of tax
	Number	Number	$ million	$	Number	$ million	$ million	$	%
Queensland
Blair	12,306	44,129	1,198	27,153	5,823	6	257	5,950	21.9
Bowman	10,137	54,763	1,641	29,968	7,822	17	372	7,102	23.7
Brisbane	10,192	62,727	2,071	33,018	11,159	30	504	8,508	25.8
Capricornia	12,309	51,731	1,679	32,458	8,949	10	418	8,274	25.5
Dawson	11,085	56,923	1,693	29,748	9,875	14	379	6,912	23.2
Dickson	9,720	57,478	1,746	30,380	9,146	12	404	7,233	23.8
Fadden	10,873	54,476	1,567	28,770	7,717	20	344	6,677	23.2
Fairfax	13,200	43,464	1,093	25,145	6,798	14	213	5,226	20.8
Fisher	13,101	46,979	1,222	26,009	8,313	21	242	5,584	21.5
Forde	10,975	51,142	1,360	26,594	5,452	8	287	5,764	21.7
Griffith	10,275	60,522	1,895	31,319	10,928	20	444	7,665	24.5
Groom	12,148	51,588	1,435	27,811	8,785	12	306	6,178	22.2
Herbert	10,977	60,329	1,840	30,505	7,510	14	414	7,089	23.2
Hinkler	11,652	46,549	1,332	28,610	6,552	10	297	6,578	23.0
Kennedy	14,485	57,137	1,715	30,024	7,623	9	377	6,766	22.5
Leichhardt	13,541	62,274	1,802	28,941	7,089	15	389	6,495	22.4
Lilley	9,954	59,419	1,894	31,881	11,048	28	441	7,902	24.8
Longman	11,926	45,787	1,201	26,241	5,505	9	248	5,597	21.3
Maranoa	15,533	51,805	1,472	28,408	8,816	11	321	6,405	22.5
McPherson	13,226	57,144	1,505	26,344	8,457	20	308	5,744	21.8
Moncrieff	13,044	60,539	1,679	27,733	8,133	28	357	6,374	23.0
Moreton	11,288	58,319	1,768	30,323	10,589	20	405	7,275	24.0
Oxley	8,932	49,257	1,353	27,476	4,937	5	291	6,016	21.9
Petrie	10,388	52,343	1,498	28,623	8,061	12	328	6,513	22.8
Rankin	10,608	56,428	1,574	27,894	6,552	10	345	6,287	22.5
Ryan	11,564	60,799	2,265	37,247	15,745	48	578	10,287	27.6
Wide Bay	13,377	40,662	1,049	25,791	6,118	8	216	5,494	21.3
Unallocated Qld	2,949	13,670	404	29,522	1,822	3	91	6,898	23.4
Total Queensland	319,765	1,468,383	42,954	29,252	225,324	432	9,577	6,816	23.3
South Australia
Adelaide	9,230	54,741	1,826	33,352	11,466	46	431	8,701	26.1
Barker	13,684	51,800	1,335	25,768	9,997	14	267	5,438	21.1
Bonython	9,502	48,191	1,260	26,142	3,821	3	263	5,501	21.0
Boothby	10,000	53,317	1,667	31,265	12,269	28	381	7,665	24.5
Grey	11,906	48,858	1,403	28,722	9,413	10	303	6,389	22.2
Hindmarsh	9,506	53,057	1,526	28,757	10,186	21	330	6,612	23.0
Kingston	11,193	58,794	1,618	27,522	6,997	7	351	6,082	22.1
Makin	10,589	62,726	1,757	28,013	8,127	6	385	6,241	22.3
Mayo	12,586	62,870	1,876	29,839	11,581	22	423	7,076	23.7
Port Adelaide	8,818	47,835	1,331	27,826	6,643	12	286	6,230	22.4
Sturt	9,660	53,251	1,783	33,479	13,227	49	414	8,698	26.0
Wakefield	13,048	53,165	1,443	27,136	9,660	12	298	5,830	21.5
Unallocated SA	669	3,442	98	28,426	659	1	21	6,494	22.8
Total SA	130,391	652,047	18,922	29,019	114,046	230	4,152	6,721	23.2

 

Table 1-Taxation Statistics by Commonwealth Electoral Division continued

Electoral Division	Non-taxables	Taxables	Taxable Incomes	Mean taxable income	Total imputation credit		Net tax	Mean total tax	Effective rate of tax
	Number	Number	$ million	$	Number	$ million	$ million	$	%
Western Australia
Brand	10,176	46,306	1,350	29,155	5,665	6	304	6,697	23.0
Canning	10,330	54,038	1,515	28,029	6,482	7	334	6,299	22.5
Cowan	9,820	56,106