The report explores how Australians participate in education, from preschool through to university, achievement in
literacy and numeracy, the pathways school leavers take and whether gaining an education pays off in future earnings.

To read the full report, click here.

The post Smart Austalians income and wealth report appeared first on AdviserVoice.

But women still face earnings inequality with the report finding that a 25 year old woman with a postgraduate degree can expect to earn just two thirds of her male counterpart’s lifetime earnings, $2.5 million compared to $3.2 million.

These are some of the key findings in the AMP.NATSEM Income and Wealth Report Smart Australians which explores education and innovation in Australia.

According to the report, there has been a massive generational shift in educational attainment in Australia with 77 per cent of students now completing Year 12, up from 45 per cent in 1984. While more than 44 per cent of 25-34 year olds have achieved a tertiary education, compared to just 30 per cent of 55-64 year olds.

Education is among the top 15 expenditure items for Australian families and in the last six years, average family spending on preschool and primary school education has risen by 79 per cent and spending on secondary education increased even more at 101 per cent.

Over the past decade, there has been an increasing trend in parents sending their children to Catholic and independent schools, especially for high school. Independent high school annual tuition fees are highest in New South Wales and Victoria, at $19,648 and $18,620 respectively.

Although Australia is just below the OECD average on education spend, at 6.2 per cent of GDP, ranking 20th, Australian students are positioned 6th in reading and science literacy and 9th in mathematical literacy.

AMP Financial Services Managing Director Craig Meller said it has never been clearer that gaining an education pays off in future earnings.

“The report shows a person with a Bachelor Degree will also receive a high return on education, earning almost 1.7 times someone with Year 11 or below,” Mr Meller said.

“Australians are willing to go the extra mile to make sure their children receive the best possible education.

“A well-resourced education system and a culture of innovation are crucial components of Australia’s enviable lifestyle and investing in both will help ensure our nation is a truly lucky country,” Mr Meller added.

The report found that while educational standards have been increasing, education is not yet for all with only 15 per cent of all university students coming from low socio economic backgrounds, short of the Federal Government’s target of 20 per cent.

The Smart Australians report also shows that our education levels are being further bolstered by new arrivals to Australia with 46 per cent of 25-34 year old migrants holding a Bachelor Degree or above, compared to 20 per cent of those born in Australia.

Other key report findings

Getting an education pays off in future earnings

• People with university degrees are likely to earn almost twice as much as their peers in the same industry with no university degree.
• A 25 year old working in the management and commerce sector would earn $3.6 million if they had a Bachelor or Postgraduate Degree, but only $2.1 million if they had no university degree.

Women still face earnings inequality

• Women with postgraduate qualifications earn $1.3 million less over their lifetime than male postgraduates – at $2.5 million compared to $3.8 million.

Young Australians are leaving their parents for dust in the educations stakes

• Gen Y (those aged 20-35) are more educated than older Australians – on average 66% have completed Year 12, compared to 40% of Baby Boomers (aged between 50-64).

Education apple doesn’t fall far from the tree

• A person whose father has attained a university degree is much more likely to go to university (66%), compared to those whose father only obtained Year 10 or below (29.3%).

An increasing number of parents are choosing private schools for their kids

• Over the past decade, student enrolments in Catholic and independent schools have grown at a faster rate than government school enrolments, with 22% of secondary school students now enrolled at Catholic schools and 18% at independent schools, compared to 20% for Catholic and 14% for independent in 1997.

Vocational or ‘technical’ education is gaining in popularity

• The level of vocational education training (VET) has risen significantly in recent years with 25% of 15-19 year olds holding a VET qualification, compared to 20% in 2006.

Victorians are the most likely to hold a VET qualification

• There is a growing trend of students combining high school education with VET training, with VET training in schools accounting for more than half of total VET students.

Big differences in education across the states and territories

• The ACT has the highest proportion of people with Year 12 or equivalent and the lowest levels are in the Northern Territory – 72% compared to 41%.
• 25% of 15-64 year olds living in the ACT hold a Bachelor Degree, compared to 18% in NSW and a national average of 17%.

Vic, ACT and NSW primary school students are high achievers

• Students in Victoria, the ACT and NSW on average achieved higher NAPLAN scores at 499,497 and 496 respectively, compared to the national average of 485.

ACT, Qld and Vic students most likely to complete Year 12

• The ACT, Queensland and Victoria’s retention rates are above the national average, at 98%, 83% and 82% respectively, with the national average at 79%.

Research and development spending on par with international levels

• Public and private investment in research and development accounts for 2.2% of GDP, only a fraction lower than the OECD average, ranking Australia in 12th place.
• There has been a significant increase in R&D funding since 2004, with current investment at about $28 billion.
  Australia has a two-speed research and development economy.
• Increases in research and development spending have largely stemmed from the mining states – with Western Australia recording a massive increase of 283% over eight years and Queensland an increase of 116 per cent over the same period.

NATSEM lead author of the report, Principal Research Fellow Rebecca Cassells said Australians are efficient educators, spending just below the OECD average on education but ranking high in international standards which raises the question, how might Australia fare with further spending on education?

“Australia’s educational achievements are impressive but there are gaps to be narrowed around access to education and differences in educational achievement across the states. Women are also losing out with considerably lower lifetime earnings than men, partly due to lifestyle factors, such as taking time out of the workforce to raise children, but gender inequality is still a big factor in the equation,” Ms Cassells said.

“Increased investment in education is paying off in the innovation stakes, with research and development spending in Australia now virtually level with spending across the OECD. However, Australia is experiencing something of a two-speed research and development economy, especially between mining and non-mining states.  Business research expenditure in Western Australia increased by 283 per cent over the last decade, compared to 102 per cent in NSW and 76 per cent in Victoria.”

The report found Australia punches above its weight in innovation with patents granted to Australian inventors accounting for 10 per cent of the world’s total, second only to the United States, and there has been significant increases in research and development funding, with current levels at about $28 billion, an increase from $16 billion in 2004.

Since 2002, AMP and NATSEM have produced a series of reports that open windows on Australian society, the way we live and work – and our financial and personal aspirations.  AMP publishes these reports to help the community make informed financial and lifestyle decisions and to contribute to important and economic policy debate.

The post Smart Australians Report appeared first on AdviserVoice.

The AMP.NATSEM Income and Wealth Report: Prices these days! The cost of living in Australia explores how living costs have changed since 1984 finding that average income growth for Australian households across all income and socio-economic groups more than covered the cost of living over this period. To read the full report, click here.

However, cost of living pressures continued with strong price growth since 1984 across everyday essentials including electricity, which increased 253%, rent prices grew 223%, mortgages increased 256%, petrol increased 208% and public transport costs jumped 287%.

This growth was partially offset by dramatic drops in audio visual and computing, which now cost one tenth what they did in 1984, while average prices for clothing, footwear and major household appliances have changed little, and are often lower today than 27 years ago.

Key findings

• We’re spending more on discretionary items – the highest income households are spending around 30% on basic necessities and 45% on discretionary items, while the lowest income households devote 30% to discretionary items. Overall households are spending a greater proportion of income on services such as private schooling, restaurant meals, childcare and tertiary education.
• Incomes have outpaced the cost of living across the board since 1984 – couples with children have seen their income grow by 37%, single parent incomes have grown 34% and working families 22%. The smallest increase was rental households who experienced only 11% growth. On average, households are $224 per week better off than in 1984.
• The cost of services have increased strongly since the 1980s – education expenses for secondary students have grown by 264%, or 4.9% per annum, mostly attributed to higher private school fees. Medical, dental and insurance costs have increased at even greater rates, jumping 560%, 356% and 346% respectively.
• The costs of many imported goods shrank since the 1980s – the lower or stagnant prices of clothes and footwear, computing and audio visual equipment have all helped to offset price increases in other areas. The biggest change has been in audio visual and computing, which has fallen 90%.
• Work demands have driven increases in childcare spending – childcare is an example of the real nature of cost of living pressures. Demand for childcare has increased significantly since the 1980s with households spending more than double on these services in just six years.
• Australia’s petrol prices are among the lowest in the world – only Canada, USA and Mexico have cheaper petrol prices in the developed world. Australia’s average unleaded petrol price of around $1.40 per litre is significantly cheaper than most European countries where petrol can cost more than AUD$2 per litre.
• Sydney continues to be the most expensive city to live in – Sydney is the most expensive capital city to live in, costing on average, $71,426 for a standard ‘Sydney’ basket of goods per year, or $1,374 a week. For that same basket of goods, Adelaide is the cheapest costing the average household $4,442 per year less than Sydney. Canberra has the highest standard of living taking into account both average costs and income, followed by Darwin and then Perth.
• Sydney and Melbourne are two of the most expensive cities in the world – as our currency has appreciated over recent years, so has our place in the international cost of living index. Sydney and Melbourne sit 7th and 8th respectively on the index, making cost of living for the international worker 45% higher than in New York. However offsetting this, Sydney and Melbourne also enjoy some of the highest incomes.

AMP Financial Services Managing Director Craig Meller said the AMP.NATSEM report shows households today are more focused on lifestyles and aspirations than they were in the 80s.

“Many Australians are leading busier lives and facing greater demands on their time which means we’re now paying for things we may not have previously, such as childcare, gardening and housekeeping.

“We’ve also seen a noticeable shift in spending habits with people spending more on education, holidays and eating out. Essentially we seem to be leading bigger lifestyles, all of which can add to perceived cost of living pressures.”

NATSEM lead author of the report, Principal Research Fellow Ben Phillips said that strong economic growth in Australia since the early 1990s has led to Australia having one of the highest standards of living in the world.

“While there is little doubt that many families still struggle to make ends meet, this report shows that on average, Australian households, both high and low income, are financially better off than in previous decades.

“Cost of living pressures are more related to our increased expectations and the greater demands from a modern society than the prices we pay for petrol or electricity.”

Since 2002, AMP and NATSEM have produced a series of reports that open windows on Australian society, the way we live and work – and our financial and personal aspirations. AMP publishes these reports to help the community make informed financial and lifestyle decisions and to
contribute to important social and economic policy debate.

The post Household incomes outpacing the cost of living appeared first on AdviserVoice.

But when it comes to how men and women spend their day, the report finds that there are some big differences, with traditional gender roles still evident.

Australian women are spending on average two hours more each day than men on housework, child care and purchasing goods and services. Men spend almost the equivalent extra time on employment-related activities as well as an extra half hour per day on recreational and leisure
pursuits.

These are some of the key findings of the AMP.NATSEM Income and Wealth Report: Race against time – How Australians spend their time, which examines time use in Australia, including time spent on employment and education; housework and child care; leisure; and sleeping and eating; and how this has evolved.

With many already time squeezed, women are less satisfied than men with their partners’ contribution towards child care and housework, with 25% not so satisfied with their partners’ commitment of time towards child care compared to 15% for men.

And women are even less happy with the help they get with household tasks – with 11% actively dissatisfied. In contrast, only 4% of men are dissatisfied with their partners’ efforts around the home.

Contributing to time pressures, Australian full-time weekly work hours have increased by almost three hours for men and two hours for women since 1985. That is, average weekly full-time hours have risen from 39.5 hours to 42.3 hours for men and 36.4 hours to 38.6 hours for women.

AMP Financial Services Managing Director Craig Meller said the report shows that juggling work and family is the main reason both men and women in Australia feel pressed for time.

“Juggling competing work, family and individual commitments means we have to be careful time managers. But there are only 24 hours in a day, leaving many of us feeling like we’ve let someone, or even ourselves, down. This is especially the case for young working mothers, who seem to be the most time poor according to the report’s findings,” Mr Meller said.

A third (33%) of men and women in double income households with children feel that child care is shared fairly between them. However, an additional 33% of women believe they do more than their fair share of looking after the children, despite their partners claiming to contribute fairly.

Time pressure is felt especially by young mothers with children, more than 60% feeling they contribute more than their fair share to household tasks. This compares with 50% of working women without children.

NATSEM Director and co-author of the report Professor Alan Duncan said the regular nine to five working week now appears less the norm with people now working longer hours, often with early starts and late finishes, and weekends at the office.

“These types of work patterns have potentially adverse effects on family life, a greater requirement for tag team parenting and add to the time pressures that working couples particularly are feeling,” Professor Duncan said.

The post How Australians spend their time appeared first on AdviserVoice.