FACTBase
Bulletin 37, July 2014
Spatial inequality across Perth and Peel:
stabilising post-GFC
Kirsten Martinus
Introduction
The shifting dimensions of spatial
inequality provide an insight into
the profound structural changes
that have taken place within
Australian cities since the 1970s.
The growing divide between rich
and poor suburbs has become
a matter of increasing concern
given that Australia is seen as the
‘lucky country’ and affords its
citizens ‘a fair go’ when it comes
to access to social and economic
opportunity (AMP, 2008; Bankwest
Curtin Economics Centre, 2014;
Hunter & Gregory, 1996).
If Australia is the ‘lucky country’,
then Western Australia (WA) could
arguably be described as the
luckiest state within Australia.
That is to say, WA managed to
navigate through the 2008 Global
Financial Crisis (GFC) relatively
unscathed. This was largely due
to the resources boom that took
off in the mid-2000s and price
deflation in the wake of the GFC
(see Martinus, 2014).
Following on from the analysis of
FACTBases 5 and 16 (Tonts, 2010a,
2010b), this FACTBase explores
spatial income inequality across
Perth in the years leading up
to and following the GFC.
Australian Taxation Office (ATO)
annual personal income data
by postcode for the financial
years 2004/05 to 2011/121 is
used to create an index of
spatial inequality 2 for each of
Australia’s capital cities. A lower
index value equates to greater
equality in the distribution of
mean personal incomes across
spatial units. Conversely, a
higher value demonstrates
larger spatial wealth imbalances.
This approach allows spatial
inequality to be compared
across the 40 Statistical Local
Areas (SLAs) that make up the
Perth and Peel region during the
2005 to 2012 period and against
a select number of capital cities
in 2012. In addition, 2005 and
2012 incomes across the SLAs are
mapped to allow a longitudinal
comparison of the ATO data3.
The index of spatial inequality
demonstrates similar patterns
at different spatial units.
Figure 1 illustrates the 0.1 point
difference in spatial inequality
at the postcode and SLA level.
This is significant given the
minor shifts in the index overall.
Spatial inequality is reduced
when smaller geographic
units are considered; that is,
postcodes have lower values
than larger SLAs. The next
section investigates spatial
inequality at the Perth and Peel
SLA level, whilst the third section
uses postcodes to compare
Australian capital cities.
1 ATO data is released with a 2 year lag; 2011/12 is the latest data available.
2 The spatial inequality index is constructed using a coefficient of variation for mean personal income for all Perth and Peel SLAs.
As a statistical measure, the coefficient of variation compares the degree of variation from one data series to another.
3 ATO postcode data is converted to SLAs for Metro Perth and Peel using Australian Bureau of Statistics 2011 concordance files (ABS, 2012).
FACTBase Bulletin 37, July 2014 | 1
FACTBase
Bulletin 37, July 2014
Figure 1: Comparing changes in spatial inequality for Perth and Peel for
the spatial units of SLA and postcode, 2005-2012
0.4
0.35
SLA
0.3
Postcode
0.25
0.2
0.15
0.1
0.05
0
2005
2006
2007
2008
2009
2010
2011
2012
Figure 2: Changes in spatial inequality for Perth and Peel, 2005-2012
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
2005
2006
2007
2008
2009
2010
2011
2012
Spatial inequality in Perth, 2005-2012
Figure 2 shows changes in
Perth’s income inequality
between 2005 and 2012 at the
SLA level4. In the resource boom
years leading up to the GFC,
incomes across Perth and Peel
became progressively unevenly
distributed increasing from 0.29
(2005) to 0.36 (2007) as wealthier
suburbs became wealthier.
The GFC had a marginal impact
on reducing spatial inequality
with the co-efficient of variation
falling by -0.03 points between
2007 and 2008/2009. Despite
increasing in 2010, inequality has
remained constant at 0.35 from
2010 to 2012 period. Whilst not
returning to 2007 levels (of 0.36),
income inequality across Perth
and Peel in 2012 is 0.06 points
higher than eight years earlier
(2005 was 0.29). This increase
in spatial inequality is less than
that recorded in the previous
FACTBase (see Tonts, 2010b),
when it rose by 0.09 points
between 2000 and 2007.
4 Differences with indices of spatial inequality reported in FACTBases 5 and 16 for 2005-2008 could be attributed to differences
in the spatial units and areas under focus. Despite these slight variations, the construction of the indices remains the same and
allows comparison in overall patterns.
FACTBase Bulletin 37, July 2014 | 2
FACTBase
Bulletin 37, July 2014
Figure 3: Mean personal income for Perth and Peel SLAs, 2005
Enlargement
Stirling Coastal
Stirling Central
Bayswater
Bassendean
Stirling South-Eastern
Vincent
Cambridge
Subiaco
Nedlands
Perth Remainder
Belmont
Perth Inner
Victoria
Park
Claremont
Cottesloe
South
Perth
Peppermint
Grove
Mosman
Park
Fremantle Inner
Wanneroo North-West
#
Canning
East
Fremantle
Melville
# Fremantle Remainder
Wanneroo North-East
Swan
Joondalup - North
Joondalup - South
Wanneroo - South
Mundaring
By 2012, the differential between
rich and poor appeared to be
closing. In overall terms, most
SLAs experienced an increase
in their mean personal income
levels, with the majority of
SLAs in at least the $65,001$75,000 income bracket. A small
number of SLAs – Armadale,
Bassendean, Gosnells, Kwinana
and Wanneroo-South – remained
in the lowest income bracket
and therefore under increased
financial stress given their
reduced incomes relative to the
rest of Perth and Peel SLAs.
Kalamunda
Enlargement
Gosnells
Cockburn
Armadale
Kwinana
Rockingham
Serpentine-Jarrahdale
Mandurah
Legend
Murray
Waroona
2005 Income ($)
Below $65,000
$65,001 - 75,000
$75,001 - 100,000
Above $100,001
0
10
20
Figures 3 and 4 highlight the
geographic changes in wealth
across SLAs within the Perth
and Peel metropolitan region
between 2005 and 2012. In
2005, income wealth was
concentrated around Perth’s
urban core and the western
suburbs sub-region with incomes
above $65,000. Peppermint
Grove and Cottesloe were the
standout SLAs with incomes in
the $100,001 and over bracket.
The majority of SLAs (n=26; 65
percent) had incomes below
the mean Perth/Peel SLA
personal income of $51,256;
these SLAs were most likely
to experience financial strain
under Perth’s increasing prices
(see Martinus, 2014).
40
km
The five western suburb SLAs of
Cambridge, Claremont, Mosman
Park, Nedlands and Subiaco
joined the top income bracket
of $100,001 and over, with other
inner- metropolitan SLAs – (all
Fremantle SLAs, Melville, Perth
(inner and Remainder), South
Perth, Stirling (Coastal and
Southeastern) and Vincent –
moving into the $75,001-$100,000
income bracket.
Despite this overall increased
wealth, the mean personal
income of 28 SLAs fell below the
Perth/Peel average of $86,352.
FACTBase Bulletin 37, July 2014 | 3
FACTBase
Bulletin 37, July 2014
National Trends
Figure 4: Mean personal income for Perth and Peel SLAs, 2012
Enlargement
Stirling Coastal
Stirling Central
Bayswater
Bassendean
Stirling South-Eastern
Vincent
Cambridge
Subiaco
Nedlands
Perth Remainder
Belmont
Perth Inner
Victoria
Park
Claremont
Cottesloe
South
Perth
Peppermint
Grove
Mosman
Park
Fremantle Inner
Wanneroo North-West
#
Canning
East
Fremantle
Melville
# Fremantle Remainder
Wanneroo North-East
Swan
Joondalup - North
Joondalup - South
Wanneroo - South
Mundaring
Kalamunda
Enlargement
Gosnells
Cockburn
Armadale
Kwinana
Fletcher and Guttman (2013)
noted Australia’s relative equality
when compared internationally
given its income growth across
all income groups. They found
Australia had ‘the second
highest ‘average’ income growth
between the mid-1990s and the
late 2000s amongst all OECD
nations’. Figure 5 disaggregates
income spatial inequality trends
for the capital cities of Adelaide,
Brisbane Melbourne, Perth and
Sydney. In short, Perth has had
moderate income inequality with
the most unequal cities being
Sydney and Melbourne. These
latter cities exhibited the greatest
rise in inequality between poor
and rich suburbs pre-GFC, hitting
0.39 and 0.34 respectively in
2007. They also displayed the
greatest adjustments declining
by -0.04 and -0.05 points in
2009, as opposed to the -0.01
point decline in Perth, Brisbane
and Adelaide.
Rockingham
Serpentine-Jarrahdale
Mandurah
Legend
Murray
Waroona
2012 Income ($)
Below $65,000
$65,001 - 75,000
$75,001 - 100,000
Above $100,001
0
10
20
40
km
In fact, Perth, Brisbane and
Adelaide have demonstrated
relatively less volatility in
inequality across their cities over
the entire study period. Despite
this, all cities experienced similar
point changes between 2005
and 2012. The Sydney/Melbourne
cohort declined by 0.01 points
(becoming more equal across
their respective cities), while the
Perth/Brisbane/Adelaide cohort
increased by 0.01-0.02 points.
FACTBase Bulletin 37, July 2014 | 4
FACTBase
Bulletin 37, July 2014
Figure 5: Spatial inequality of Australian cities
0.45
0.40
0.39
Spatial Inequality (Coefficient of Variation)
0.37
0.35
0.30
0.35
0.29
0.35
0.35
0.34
0.30
0.29
0.34
0.20
0.25
0.24
0.21
0.19
0.20
0.18
0.18
0.28
0.28
0.25
0.23
0.34
0.30
0.29
0.26
0.25
0.35
0.18
0.20
0.20
0.18
0.18
0.25
0.26
0.21
0.21
0.21
0.19
0.19
0.19
0.24
0.15
0.10
0.05
0.00
2005
2006
2007
Adelaide
Conclusion
In overall terms, mean personal
income in the Perth and Peel
region has increased since
the commencement of the
resources boom in the mid-2000s.
Furthermore, the WA economy,
in large part due to the resources
sector, has weathered the
challenges of the GFC. However,
the spatial impacts of the
economic prosperity enjoyed
by WA over the last decade has
not been evenly spread within
the Perth and Peel region. The
increasing income inequality
between 2005 and 2012 reflects
disparities in access to economic
opportunities related to WA’s
two-speed economy. While
the mean personal income of
the majority of SLAs has moved
into the next income bracket,
many still lag behind the Perth
and Peel average income level.
The more affluent suburbs have
accumulated greater household
wealth relative to the remainder
Perth SLAs.
Similar patterns of income
inequality are found in other
Australian cities, with the
Sydney/Melbourne and
Brisbane/Adelaide cohorts
occupying positions of
2008
Melbourne
2009
Perth
Sydney
2010
2011
2012
Brisbane
most and least egalitarian
by income distribution.
This general rise in income
inequality is challenging the
‘fair go’ mentality that previously
defined Australia. Despite
this, Australia is well-placed
to address disadvantage with
one of the most comprehensive
income-testing for benefits and
progressive direct tax systems
in the OECD (Fletcher and
Guttman, 2013). As suggested
by Fletcher and Guttman (2013),
a focus on the symptoms of
entrenched disadvantage
may be a better means to
improve Australian well-being
than strategies targeting
spatial inequality.
References
ABS (2012) Postcode 2011
to Statistical Local Area
2011 (1270055006C184).
ABS, Canberra.
AMP (2008) Advance Australia
fair?: trends in same area socioeconomic inequality 2001-2006.
AMP NATSEM Income and
Wealth Report, Issue 20.
ATO (years 2004/05 – 2011/12)
Taxation Statistics. ATO,
Canberra.
Bankwest Curtin Economics
Centre (2104) Sharing the boom:
the distribution of income and
wealth in WA. Focus on Western
Australia Report Series, No.1.
Fletcher, M. and Guttman, B.
(2013) Income inequality in
Australia. Economic Roundup, 2.
Hunter, B. and Gregory, R. (1996)
An exploration of the relationship
between changing inequality
of individual, household and
regional inequality in Australian
Cities. Urban Policy and
Research, 14(3), 171-182.
Martinus, K. (2014) Perth’s
Prosperity Through the 2008
Global Financial Crisis, FACTBase
Bulletin 36, The University of
Western Australia and the
Committee for Perth, Perth.
Tonts, M. (2010a) Is Perth
Becoming More Unequal?,
FACTBase Bulletin 5, The University
of Western Australia and the
Committee for Perth, Perth.
Tonts, M. (2010b) Is Perth
Becoming More Unequal?
Updated, FACTBase Bulletin
16, The University of Western
Australia and the Committee
for Perth, Perth.
FACTBase Bulletin 37, July 2014 | 5
FACTBase
Bulletin 37, July 2014
About FACTBase
Copyright
FACTBase is a collaborative
research project between
the Committee for Perth and
The University of Western
Australia to benchmark the
liveability of Perth and its global
connectedness through an
examination of Perth’s economic,
social, demographic and
political character.
This paper is copyright of The
University of Western Australia
and the Committee for Perth.
While we encourage its use, it
should be referenced as:
Martinus, K. (2014) Spatial
Inequality Across Perth
and Peel: Stabilising PostGFC, FACTBase Bulletin
37, The University of
Western Australia and the
Committee for Perth, Perth.
The Committee for Perth is a member-funded organisation and
we acknowledge Foundation partners:
Kirsten Martinus is an Assistant
Professor at The University of
Western Australia’s School
of Earth and Environment.
She has broad research
and consulting experience
in North America, Asia and
Australia in projects relating to
international trade relations
as well as strategic economic
and regional development.
Her research interests lie in the
human geography impact of
globalisation and technology.
As part of her role at UWA,
she conducts research for the
FACTBase team and lectures in
regional analysis and planning,
economic geography and
global cities.
UniPrint 112997
The FACTBase team of
academics and researchers
condenses a plethora of existing
information and databases on
the major themes, map what is
happening in Perth in pictures
as well as words, and examine
how Perth compares with, and
connects to, other cities around
the world.
About the author
A complete list of current members is available at:
www.committeeforperth.com.au
FACTBase Bulletin 37, July 2014 | 6