Do you consider yourself a struggling, comfortable or rich Australian? What is rich? What is comfortable? What is struggling?

Australian household incomes are once again under a spotlight with the federal Budget looming and the government calling for everyone to do their bit to stave off what they claim is an economic “cyclone”.


The government is also looking at those on “high incomes” to contribute to the national coffers, including proposals for a deficit tax and compulsory private health insurance with access to Medicare cut off. Taxing people who can afford to pay a little extra is always a tad contentious, partly because people can’t agree on the definition of wealthy or rich.

Social researcher and director of Ipsos Mackay Dr Rebecca Huntley said it’s not hard to define high incomes if you’re a statistician or an economist, but it is tricky for everyday people because of how they feel about their personal circumstance.

She told “It’s rare to get people who are on $150,000 or $200,000 to call themselves rich. They’ll say they’re middle class or better off. Often the people on those incomes see multi-millionaires as the ones that are rich.”

Many Australians wouldn’t consider themselves as rich unless they were multimillionaires

Many Australians wouldn’t consider themselves as rich unless they were multimillionaires with yachts. Source: News Limited

The ABS says the average individual wage in Australia in November 2013 was $57,980 before tax. The average full-time wage is $74,724 before tax. Those figures may seem high but keep in mind it doesn’t include people whose only income source is government payments or pensions, which would drag the average down significantly.

The most recent ABS household income and income distribution report (for 2011 to 2012) classified households on high incomes as one with an average equivalised income of $94,328 after tax and the Medicare levy. It roughly equates to a single pre-tax income of $140,000 not taking into account any deductions, HELP repayments and tax benefits or offsets.

An equivalised income represents what a one-person household would need to earn to enjoy the same living conditions as those in a bigger household. But it’s not a matter of doubling, tripling or quadrupling that figure for a bigger household because there are cost savings from being in a multi-person household. For example, a family of four is likely be to paying one mortgage rather than four, so they won’t need $380,000 a year.


A middle income household is one with $41,236 after tax and levies while a low income household is defined as $24,700 a year. Household incomes in capital cities were 21 per cent higher.

And there is no doubt there is inequality in income distribution in Australia. The wealthiest 20 per cent of households account for 61 per cent of total household net worth while the bottom 20 per cent control only 1 per cent.

But while those statistics seem clear cut about who is rich and who isn’t, it doesn’t factor in various personal circumstances of each Australian family, their lifestyle expectations or where they live.

Earning $94,328 a year could see a single guy living incredibly well in Iron Knob, South Australia, population 199, where you can buy a three-bedroom house for $135,000. But a family of three in the inner or middle rings of Sydney or Melbourne would need a whole lot more money to have the same lifestyle.

Part of what makes this debate muddy is our collective definition of “middle class” has changed.

Dr Huntley said: “We’ve had a long period of affluence and with that is the growing expectation of what the middle class looks like.

“People feel that the middle class should be able to afford private school, maintain reasonably new cars, have family holidays every year and have updated pieces of technology.”

Dr Huntley said definitions of who is rich and who is comfortable is highly contextual and emotional.

The political and social debate after the budget will likely centre around who will feel hard done by the federal government’s proposals.

Dr Huntley said: “I think [the budget] will provoke a discussion about what income level is right for the government to say you’re not entitled to government support.”

Of course, given the relative experiences and perspectives of each individual, what makes someone struggling, comfortable or rich is hugely different depending on who you talk to.

We asked readers what their financial situations are and if they considered themselves struggling, comfortable or rich.


Warren Wingrove, regional Victoria

Warren Wingrove is a casual factory worker earning approximately $25,000 a year before tax, but would prefer to be a full-time or part-time position for the sake of job security.

Warren Wingrove is surviving on $25,000 a year.

Warren Wingrove is surviving on $25,000 a year. Source: Supplied

He boards at home with his mother and pays her $150 a week and contributes to all the household bills.

Mr Wingrove said one of his biggest costs is the weekly fuel for his 14-year-old car for the 35-minute drive to work. He tries to save as much as possible as he’s unable to cover unexpected costs without budgeting for it in advance.

He said: “I try to put away as much as I can. If I need to go to the dentist, I have to save for a month. I can’t afford a lot of things.”

His one treat for himself every week is he will splurge and get a take-out meal.

Samantha Miels, Townsville

Samantha Miels and her husband live in Townsville with their three children (two in primary school, one in high school) and eight pets. Her husband earns $52,000 a year while she receives $17,000 in government support from family tax A and B and rent assistance. Ms Miels said her family now rents a nice place because of the National Rental Assistance Scheme.

Samantha Miels and her family.

Samantha Miels and her family. Source: Supplied

Ms Miels said her family lives pay cheque to pay cheque but she budgets in advance and tries to pre-empt expenses. She said they don’t go out to dinner, to the movies or do anything that costs money but they have memberships to the local museum and aquarium because it gives them someplace to go out to.

For her to feel her family is comfortable, she believes an income of $80,000 would be necessary. Ms Miels said if family tax benefit B was cut or the Medicare GP co-payments came in, it would hurt their situation.

However, she seems upbeat. She said: “We don’t really live outside of our means but there isn’t a lot of wiggle room. We have everything we need and some of what we want. Our kids don’t get all the new toys but they’re happy.

“We can’t always do something we want to do but we don’t dwell on it. The electricity bill always scares us and fuel is rationed. I budget ruthlessly. We are comfortably struggling.”


Becca W, Gold Coast

Becca is a single mother with a 17-year old daughter. She’s a debt collector with an income of $50,000 a year (including commission) and when her daughter finishes school this year, she will lose $6000 in government support. Becca’s outgoings include a mortgage, a car loan, a credit card, body corporate fees, utilities, school expenses, insurance, petrol, groceries and an extra $20 a week contribution to her superannuation.

Becca said: “I feel that I’m living comfortably. I have a roof over my head, my bills are paid and there is food in my fridge. However, I am lucky to have $20 or $50 to myself at the end of the week and I don’t really have room for anything out of the blue. But I’m better off than a lot of people.”

Becca said when there’s something special she wants, she’ll save for it. For her 40th birthday, she and a friend went on a P&O cruise to celebrate but she put money aside for it every week for three years.

Becca saved for three years to go on a P&O cruise.

Becca saved for three years to go on a P&O cruise. Source: Supplied

Becca sees herself as a comfortable in part because she sees someone like her 79-year old father as struggling. Her father is on an old age pension of $23,000 and at his age, is still picking up casual jobs to make ends meet. Becca is concerned that if there are changes to the pension, she will have to take her father in which could mean a greater financial burden on herself.

James Merritt, Queensland

James Merritt, 26, works in the mining industry in Gladstone, Queensland. He earns $130,000 a year while his girlfriend is on $30,000. They bought a house three years ago in the area.

Like many people his age, Mr Merritt said he has all the money he needs but then nothing left over. He said: “The more I earn, the more I spend. I’ve got a nicer car now but no savings really. We’ve got money for things we need and want, but we do waste money. If we made an effort to save for something, we would be able to. I’m comfortable, but I wouldn’t say I’m rich.”

Mr Merritt said some his friends call him rich all the time because they’re on half his wage but he said he’s worked for it. “It’s not like I got this by chance or lucked into it. I earned this job. And a lot people in high paying jobs studied and worked hard, they deserve to be there.”

Mr Merritt said their plan now is to save for a few years and move back to Brisbane so he could finish the biomedical degree he started at university.

Kirsten, Perth

Kirsten and her husband have a combined income of over $200,000 (including work bonuses). They have a two-year old whose day care costs $75 a day.

Because they pay an extra $1000 a fortnight on their mortgage, they only have nine years left of it, even though they bought their house a mere four years ago.

Kirsten considers her family to be comfortable because they can afford to buy nice clothes and go on overseas holidays as well as look into starting an investment portfolio in a few years. However, she said they also in that position because they make smart financial choices including buying in bulk and not having a reverse cycle airconditioner.

For Kirsten, being comfortable means being able to shop at retailers like Country Road. C

For Kirsten, being comfortable means being able to shop at retailers like Country Road. Country Road winter collection.Source: News Corp Australia

She said: “When I was young, my parents divorced and my mother struggled financially. I saw an opportunity where I didn’t have to put my family in that position. My sisters took a different path. They had kids very young and struggled to hold onto a stable job. It’s often how you take it personally. I know not everyone has the same opportunities. I’m lucky but I also work bloody hard.”

Chris, Brisbane

Online marketer Chris, 27, and his wife are on a combined income of $250,000 a year with no dependants. They have a mortgage on a nice house and drive “nice enough” cars and go on holidays twice a year.

His perspective on his situation is echoed by many educated and ambitious young couples who have certain expectations of their lives and their futures.

He said: “Does anyone consider themselves rich? I really believe to be at the level where money is of no concern, you’d have to be millionaire several times over.

“When I first took my job out of university, I thought to myself, how much money do I really need? Once you hit that goal though, it is always what’s next? Your lifestyle adjusts, you get used to living a certain way, then you set goals to earn more. Nicer car, house, lifestyle, food, holidays and clothes.

“At each stage you just start getting more bills, mortgage, car insurance, home insurance, contents insurance, health insurance and life insurance. Not to mention that we’re starting to plan for life — kids, paying off the mortgage, investment properties, shares and superannuation.

“The combined income of $250,000 seems to be enough for us. I now feel like we are comfortable.”


Perhaps not surprisingly, no readers contacted us and confessed to their flowing wealth. Maybe it’s true what they say: the more money you have, the less likely you’ll talk about it.

However, some of those we spoke to had their own perceptions of what makes you rich in Australia. Warren Wingrove argued anyone who has more money than they need to survive is rich.

For others on the lower end of the income scale, that threshold is around the $200,000 mark.