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Tuesday, 7 December 1971
Page: 4256

Mr Berinson (PERTH, WESTERN AUSTRALIA) asked the Treasurer, upon notice.

(1)   What is the basis of compilation and calculation of the average weekly earnings index.

(2)   What(a) number and (b) percentage of earners at or above the average level.

(3)   Can he state both the value and shortcom ings of the index as a reflection of movements in Australian living standards.

Mr Snedden - The answer to the honourable member's question is as follows:

(1)   Quarterly estimates of average weekly earnings per employed male unit are calculated by dividing the total wage and salary earnings received by civilian employees during each quarter by the mean monthly number of employees (measured in terms of male equivalent units) in receipt of those earnings. The estimates are derived from particulars of employment and wages and salaries recorded on montly payroll tax returns, or reported in direct statistical collections. In addition to salary and wage payments at award rates, the total earnings include the earnings of employees not covered by awards, overtime earnings, over-award and bonus payments, payments made in advance or retrospectively during the period, etc. The figures relate to earnings, before deduction of income tax contributions. They include an allowance for the earnings of persons holding more than one job, and for the estimated number of wage and salary earners in the labour force not covered by payroll tax or other monthly returns.

Particulars of wages and salaries paid are not available for males and females separately from the sources used for this series; average weekly earnings are therefore calculated in terms of male units, i.e. total male employees plus a proportion of female employees, the proportion being determined by the estimated ratio of female to male average earnings. Different values of this ratio are used for the several States, the weighted average for Australia being approximately52.5 per cent. The level of this ratio is affected by the factthat the proportion of females in lower paid occupations is greater than that for males, and that overtime and over-award payments constitute a higher proportion of male than of female earnings.

In calculating seasonally adjusted estimates allowance is made not only for seasonal factors but also for the varying incidence of pay-days. Seasonal adjustments factors are estimated from a series adjusted to allow for the effects of major awards and determinations of Commonwealth and State industrial authorities. The effects of these awards and determinations are retained in the seasonally adjusted data.

(2)   There are no statistics that show the number and percentage of employees who earn at or above the level of the average weekly earnings index. However, the results of a Survey of Weekly Earnings of adult male employees which was conducted during May 1971 give statistics relevant tothe honourable member's question.

These results are representative of 2,180,000 full-time adult male employees whose normal hours of work are 30 or more a week and who were paid for their full normal hours of work during the survey period.

The estimated numbers and percentage of these fulltime adult males who earned the average weekly total earnings (as estimated in this Survey, or more in the pay-period which included 12th May 1971, are set out in the table below. The estimates are based on the assumption that, for the total weekly earnings group in which the average weekly total earnings figure falls, employees are evenly distributed.

The survey excluded employees of private employers not subject to pay-roll tax; employees in rural industry and private domestic service; employees of religious, benevolent and other similar organisations exempt from pay-roll tax; and waterside workers employed on a casual basis.


(3)   Statistics of average weekly earnings cannot be used in isolation as a reflection of movements in Australian living standards.

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