In the years leading up to the May federal election, the Morrison Government and its supporters used Australian Taxation Office (ATO) data to lobby against Labor’s policy changes to negative gearing, claiming that those earning $80,000 were ‘middle-income earners’.
We also witnessed National’s MP, Barnaby Joyce, recently claim that he is struggling to support his family on his $211,000 parliamentary income.
Yesterday, the Australian Bureau of Statistics (ABS) released its annual Characteristics of Employment survey, which revealed that the median Australian earned only $1,100 per week ($57,200 p.a.) in the year to August 2019 – well below the $80,000 ‘middle’ income threshold often quoted by the Coalition:
In fact, earning just $85,852 annually would put someone in the top 25% of income earners nationally, whereas earning $125,632 would put someone in the top 10% of income earners.
The above data also makes a mockery of the federal government’s $53,900 Temporary Skilled Migration Income Threshold (TSMIT), which has been frozen in place since 2013-14.
This TSMIT wage floor has now fallen $3,300 (6%) below the median income of all Australians ($57,200), thus ensuring employers are incentivised to employ cheap migrants instead of local workers, as well as abrogating the need to provide training.
Clearly, the wage floor for all skilled migrants (both permanent and temporary) should be set at least at the 75th percentile of earnings (and preferably even higher).
This would ensure that the scheme is used sparingly by businesses to employ only highly skilled migrants, not as a general labour market tool for undercutting local workers and eliminating the need for training.