Home > Our Publications > Australian Outlook> 2005 > May

Aussie workers well paid

WORKERS in Australia are among the best paid in the world and their standard of living has improved over the past eight years, Peter Costello claimed, citing research by the OECD.

The Treasurer said the average production worker's income after tax and family benefits was either the highest or the second highest in the world.

Mr Costello's office compared the latest edition of the OECD's report on how wages are taxed with the report it issued in 1996.

The OECD compares eight different family types, according to whether the primary earner is single or married and has children. It focuses on people on average earnings, or earning a third more, or a third less, than average earnings.

Mr Costello focused on the position of the earnings of Australians after tax and after receiving family benefits.

In 1996, Australia was ranked fifth or sixth in the world for five of the eight different family types compared by the OECD, and first in only one.

In 2004, Australia was highest for four of the family groups, while it was pipped by South Korea for the other four.

Mr Costello said improvement reflected the fact that real wages had been increasing in Australia.

"Over the period of 1996 to 2004, Australian workers have had real wages growth of 11.9 per cent, compared to an OECD average of 10.8 per cent," he said. He noted that between 1983 and 1991, the real wages of Australian workers had dropped by 4.2 per cent.

He said the Government had always believed that if the economy was strong, average workers should have rising incomes based on productivity improvements and on a tax system which serves them well.

Mr Costello's review of the OECD report followed a report based on the same document, showing that the burden of income tax had risen over the past eight years, while in other comparable countries, the weight of income tax had been falling.