Date created:22 January 2002
Last modified: 22 January 2002
Maintained by: John Quiggin
John Quiggin

Lies and statistics

Australian Financial Review

15 December 2001

In the1996 election, Labor was shocked by the loss of the safe seat of Ipswich to Pauline Hanson. In the 2001 election, Labor was shocked by its poor performance in the 'heartland' areas of Western Sydney. In both cases, immigration was a major issue, but it was believed that more deepseated problems were involved.

Hanson's victory was commonly attributed to her appeal to voters who felt that they had lost out from microeconomic reform and globalisation. Labor was seen as having deserted these traditional supporters.

A diametrically opposite diagnosis has become popular in 2001. Far from Labor deserting its traditional base, it is argued that, in New South Wales, the traditional base has deserted Labor. Rising incomes, it has said, has converted former supporters of old-style Labor policies into 'aspirational voters'. The litmus test is the tax treatment of individuals earning $50 000 per year or more, beyond the dreams of old-style Labor voters, but modest for their aspirational successors.

If both these analyses are correct, Ipswich and Western Sydney should look very different. The most accurate local data comes from the Census. In 1996, when Hanson shocked Labor, the median individual income in Ipswich was $294/week or $15000/year. Median household income was $658/week or about $34000/year. Ipswich is not home to many aspirational voters.

In the Sydney heartland area of Fairfield-Liverpool, 1996 median individual income was $258/week ($13500/year). Median household income was $670/week ($35 000/year). Statistically, Western Sydney looked just like Ipswich.

Has Sydney's booming economy over the last five years has changed the picture? Between 1996 and 2001, nominal GDP per person in NSW has risen 28 per cent while nominal GDP per person in Queensland has risen 23 per cent. Applying these scaling factors would raise median household income in Western Sydney to $44500/year, while that in Ipswich would be $42000. Apparently, the difference between aspirational voters and dispossessed outsiders is $2500/year or fifty dollars a week.

Both medians for 2001 look close to the magic number of $50 000 a year. But these are household incomes, not individual incomes. Only about one in eight wage earners makes more than $50 000 per year. Since median individual incomes in Ipswich and Western Sydney are below the Australian average, the proportion of people making $50 000 a year in these areas is probably below 10 per cent.

Where, then, are the aspirational voters to be found? The answer should surprise no one except the pundits who have been scouring the West. Hornsby-Kuringai had a median household income of $1017 per week in 1996, which suggests an income of around $65 000 per year in 2001. Similar values are found throughout the North Shore and the more desirable inner suburbs. The only problem for Labor is that these aspirational voters have always voted Liberal.

Professor John Quiggin is a Senior Research Fellow of the Australian Research Council, based at the Australian National University and Queensland University of Technology.

Read more articles from John Quiggin's home page

Go to John Quiggin's Weblog