A huge income boost from degrees

April 3rd, 2016 at 7:00 am by David Farrar

Steven Joyce released:

New information has been released today which shows what graduates go on to earn once they have studied in different disciplines at universities and other tertiary providers.

Four factsheets on the national employment outcomes for young domestic graduates, released by the Ministry of Education, follow the earnings and employability of students for the first nine years following graduation. The information comes from a dataset administered by Statistics New Zealand using the earnings for each discipline based on actual tax returns.

“Those with a bachelors degree earn on average 40 per cent more than the national median earnings after five years in the workforce. Those with post-graduate qualifications above bachelors earn even more. These benefits continue to increase over time,” says Tertiary Education, Skills and Employment Minister Steven Joyce.

The figures show that after five years those with a bachelors degree in medical studies earned 201 per cent more than the national median earnings, those with a bachelors in banking and finance and law earned 65 per cent more than the median and sales and marketing was 47 per cent above the median.

Those with qualifications at the bachelors with honours, post-graduate certificate and diploma level generally had even higher premiums than those with bachelors degrees. Graduates with a qualification in accountancy had earnings 100 per cent above the national median earnings, while graduates in civil engineering had earnings 91 per cent higher, graduates in mechanical and industrial engineering had earnings 83 per cent higher, while graduates in banking and finance had earnings 77 per cent above the national median.

Yet Labour says students should not contribute one cent towards their degrees, but instead taxpayers should spend an extra $1.2 billion a year helping some of the most privileged and well off in society.

Incomes up again

October 2nd, 2015 at 2:00 pm by David Farrar

Stats NZ reports:

Median weekly income up 4.3%

Median weekly income from all sources was up $26 in the June 2015 quarter from a year ago, Statistics New Zealand said today. Half the population aged 15+ years received more than $621 a week in the June 2015 quarter. 

With inflation running below 1%, that is a very significant boost to median incomes.

If you can keep inflation low, but have reasonable wage and income growth, you can see significant income gains. And if you reduce taxes also, you boost actual disposable incomes even more.

The data above is from the NZ Income Survey that doesn’t go back very far. But Stats NZ has a data series back to 1989 for seasonally adjusted average (not median) weekly earnings.

If you then deduct income tax and ACC levies you get net annual earnings, and adjust for inflation and you get real net income from earnings.

So what was the average real net income from earnings in December 1999 when Labour took office?

  • Gross $29,241
  • Tax $5,702
  • ACC $380
  • Net $23,159
  • Real Net (Q2 2015$) $33,205

And what were incomes six and a half years later under Labour?

  • Gross $36,838
  • Tax $7,183
  • ACC $479
  • Net $29,176
  • Real Net (Q2 2015$) $35,011

So net real incomes went up 5.4% in the first six and a half years of a Labour Government. That’s 0.8% a year.

Now what were incomes when National came in in December 2008?

  • Gross $41,435
  • Tax $8,113
  • ACC $580
  • Net $32,741
  • Real Net (Q2 2015$) $36,651

And as of June 2015:

  • Gross $50,229
  • Tax $8,089
  • ACC $728
  • Net $41,412
  • Real Net (Q2 2015$) $41,412

So over six and a half years of National Government, the average real net earnings are up 13%. That is 2.0% a year.

So the average real net income for a working New Zealand is 13% higher than in 2008. That is a significant achievement.

Now the increase in earnings has little to do with the Government. That is more a function of the labour market. But the Government does set tax rates, and Government policy does impact inflation significantly. The combination of those three has benefited working New Zealanders greatly.

If you take away percentages the average net real earnings are up $4,760 since 2008. That’s an extra $92 a week.

And by comparison they went up only $1,806 in the first six and a half years of Labour.

Income up, housing costs up

November 28th, 2014 at 12:00 pm by David Farrar

Stats NZ reports:

The latest Household Economic Survey (Income) shows average annual household income rose 9.1 percent in the two years to June 2014, from $81,227 to $88,579.

That’s a big increase. Inflation over those two years was 2.3% so average household incomes have risen 6.6% in real terms.

Median household incomes also up strongly – 7.8% over two years.

In the same period, average household weekly spending on housing costs rose 11.1 percent, from $256 to $284.

So incomes went up $7,352 on average and housing costs up $1,460.

“The increase in housing costs was largely due to higher mortgage and rent payments, as well as an increase in property rates,” labour market and household manager Diane Ramsay said.

“A really interesting shift we’ve seen is that a bigger proportion of mortgage spending is going on repaying the principal than on covering the interest payments.”

Paying off more of the principal is a good thing.

Some other interesting stats:

  • 27% of households in the bottom income quintile say their income is inadequate to meet their needs, as do 5% of households in the top quintile
  • Age has a significant factor in income. Under 20s have a median income of below $1,000, 20 to 24s a median income of $28,000 approx, 25s to 29s are $37,000 approx, and 30s to 60s are $47,000

NZ has highest wealth growth

October 17th, 2014 at 10:00 am by David Farrar

Stuff reports:

New Zealand has topped the global charts for wealth growth between 2000 and 2014, according to a report by Credit Suisse.

The Global Wealth report said favourable exchange rates meant the median wealth per adult in New Zealand grew by more than 300 per cent, with Australia a close second.

New Zealand had one of the biggest jumps in currency growth against the greenback in 2013-14, up 8 per cent.

In constant currency terms, however, New Zealand’s wealth grew much more modestly, just over 100 per cent and in line with countries like Kuwait.

Not too bad.

Issues that matter – the Economy

September 9th, 2014 at 4:00 pm by David Farrar

I think the economy matters and should be a much bigger issue in this election so I’ve put together almost a dozen graphs showing the difference between National and Labour’s record on 11 important economic indicators. These are issues that matter to families and businesses.



Food prices increased 18.6% in Labour’s last term. Food prices have increased only 1.3% in National’s last three years.



Labour left office with the current account deficit at 7.9% of GDP. It is now at 2.8%.



Power prices went up 22.9% in Labour’s last three years. The rate has halved to 12.1% in National’s last three years.



There was a net loss of 35,830 people to Australia in Labour’s last year of office. In the last 12 months only 7,150 net departures – and in recent months under 100 a month.



The overall cost of living increases or inflation totalled 9.5% in Labour’s last three years. A third of that now at 3.3% over the last three years of National.



Labour left office with an annual balance of trade deficit of $5.3 billion. In the last 12 months it has been a surplus of $1.3 billion



Remember Labour wanting to remove GST off fruit and vegetables. Under the last three years of Labour their prices went up 33.2%! Total increase in the last three years is a mere 1.4%.



The deficit in 2008/09 (on the fiscal settings left by Labour, and the impact of the GFC) was a massive $10.5 billion. Labour have opposed every piece of spending restraint since, but despite their opposition we are on track to a small $300 million surplus this year.



In June 2008 the median after tax income for a full time worker was $38,600 (in 2013 dollars). That has increased to $42,100 by June 2013, meaning the median FT worker has an extra $3,500 income to spend – and this during the worst recession the world has seen since the Great Depression.



Unemployment went up by 27,000 in Labour’s last year in office. It has declined by 17.000 in the last 12 months, and is projected to keep declining.

You are welcome to share any or all of these graphs. All data is directly from Stats NZ Infoshare except the income data where I have used the IRD website to calculate the tax impact and the Reserve Bank website to adjust them for inflation.

New Zealanders have a clear choice. Remaining on our present course which is surplus, falling unemployment, low prices, fewer Kiwis leaving, growing after tax incomes and affordable food – or a radical change of policy which would see many more taxes, less competition, a massively expanded state and an unstable alternate Government.

It is only through a healthy economy do we get to have the money to fund our health and education systems. And that brings me to my final graph.


That is economic growth for Labour’s last year in office, and National’s last 12 months.

Government do not directly control many of these economic measures. But they can and do impact them with their economic policies. The difference between where we are today and where we were in the mid to late 2000s is stark.

June 2013 Income survey

October 7th, 2013 at 11:00 am by David Farrar

Stats  NZ has published their latest annual income survey. Some interesting stats:

  • Average income from wages/salaries up 6% in the last year
  • Average income from all sources up 2.2% and median income from all sources up 2.7% which suggests less income inequality
  • Median income for those in paid employment is $45,729 and average income is $53,759
  • Median income for those with no qualifications is $39,002, $50,005 for a bachelors degree and $67,003 for a post-grad degree
  • Age is a major factor in income. 50% of those in the bottom income quintile are aged under 25, while under 25s make up just 2% of the top income quintile. Those arguing that 16 year olds must get paid $18.40 an hour are basically buts.
  • The average income for a couple with two dependent children is $97,924 while for a sole parent with dependent children is $37,126
  • Government transfers represent 3% of the income of an average couple with two children and 46% of the income an an average sole parent.
  • The median salary/wage for a 40 hour week  is $45,009 and the average is $54,229
  • 1,197,100 people receive a Government transfer, 1,892,100 are in employment, 323,900 are self-employed

Beware the average income stat

September 10th, 2013 at 2:00 pm by David Farrar

A reader e-mailed in asking:

I’d be interested to know if 70% of New Zealanders actually earn less than $43,000.

This is in relation to some claims on another blog.

The stat is correct, but it is a fairly meaningless stat. When you see stats about the average or median income for all adult New Zealanders, you need to remember this is including hundreds of thousands of New Zealanders who are not actually in work! It includes the 15 year olds at school, the tertiary students in full-time study, the non-working spouses, the beneficiaries, the retired etc.

The more useful stat for me is what is the average hourly income of someone in employment. Because it is people in employment who fund the rest of society.

The latest average hourly wage is $27.55 an hour. That equates to $55,000 a year if you did a 40 hour week. The average or mean is different from the median, but I use it here as Stats NZ only provide the mean in their quarterly stats.

How much Kiwis earn?

March 11th, 2013 at 7:00 am by David Farrar

How-Much-Do-Kiwis-Earn revised

A reader sent in this interesting infographic. From this site.

Household incomes

December 2nd, 2012 at 4:00 pm by David Farrar

The latest household income survey has some good and interesting news in it.

  • Average annual household income from all regular sources increased from $79,256 to $81,067 – a 2.3% increase
  • Average annual household income from wages and salaries increased from $77,843 to $82,029 – a 5.4% increase
  • Total housing costs as a proportion of total regular household income decreased from 16.4 percent to 16.0 percent.
  • The median annual regular household income went up 5.8% from $62,853 to $66,469
  • The median annual regular household income from salaries went up 7.9% from $46,410 to $50,057
  • The median annual personal income from salaries, for someone in employment, went up 5.9% from $37,673 to $39,889
  • The average annual personal income from salaries, for someone in employment, went up 4.0% from $44,376 to $46,169
  • The average household with a mortgage is paying $20 a week less than a year ago
  • In Auckland the average annual housing cost has dropped from $17,619 to $16,654 while the average income has increased from $90,762 to $93,532 so the proportion spent on housing costs has dropped from 19.4% to 17.8%.
  • Only around 20% of those in the two lowest income deciles say they are dissatisfied with their material standard of living, and 60% are satisfied.
  • 10% of NZers have income of over $80,000. If you have a bachelors degree it is 24%, masters 26%, and doctorate 34%

It is always interesting to see how the stats measure up against the perception.

Income and Sex

August 4th, 2011 at 8:07 am by David Farrar

Rachel Browne at Stuff writes:

A survey by Relationships Australia has revealed that people’s sex lives improve along with their income – and that the magic number for satisfaction starts at about A$80,000.

Only 44 per cent of people with a household income under A$60,000 a year are sexually active, compared with 81 per cent of people with a household income of more than A$80,000 a year.

Maybe this is why Labour is determined to tax higher earners more? 🙂