1. Expenditure of Low Economic Resource Households
Dean Adams, Director
Household Characteristics, Social Reporting and Living Conditions

2. Overview
Economic wellbeing framework.
Low resource vs low expenditure.
An augmented resource-based measure (low income, expenditure and wealth).
Implications for future measurement.

3. How do we consider economic wellbeing?

4. Low Economic Resource Households
Equivalised disposable household income (including imputed rent)
Low economic resources
(low income and low wealth)
Low income only
Low wealth only
Income
Wealth
Equivalised net worth

5. Limitations of resource-based measures
Link to living standards not always clear.
Short-term fluctuations, particularly income.
Measurement challenges (e.g. businesses).
Possible under-reporting (e.g. interest).

6. A measure of consumption?
Longer-term expectations e.g. future job
Irregular expenditure
e.g. bills, appliances, property

7. Low Expenditure households
Household Expenditure Survey :
Low expenditure = bottom 20% of expenditures (including imputed rent).
Questions:
How do low expenditure measures differ to a resource-based measure like Low Economic Resources?
Can we improve our understanding and measurement of disadvantaged groups?

8. Resource vs Consumption - How do they compare?
Low expenditure
Low Economic Resources (LER)
Total population
Family composition of household
12% single parents
13% couple only
16% single parents
9% couple only
7% single parents
20% couple only
Average Age (household reference person)
52.6 years
45.2 years
51.3 years
Tenure Type
20% owners without a mortgage
45% renters
4% owners without a mortgage
65% renters
25% owners without a mortgage
30% renters
Reporting more than four financial stress indicators
34%
40%
15%
Main source of household income
43% government pension or allowance
37% government pension or allowance
18% government pension or allowance
Equivalised disposable household income
$595
$552
$1,009
Net worth (wealth)
$333,400
$118,500
$892,000
Average Weekly Household Expenditure
$623
$956
$1,422
Proportion of weekly expenditure towards ‘basics’
72%
67%
59%

9. Resource vs Consumption - How do they compare?
Low expenditure
Low Economic Resources (LER)
Total population
Family composition of household
12% single parents
13% couple only
16% single parents
9% couple only
7% single parents
20% couple only
Average Age (household reference person)
52.6 years
45.2 years
51.3 years
Tenure Type
20% owners without a mortgage
45% renters
4% owners without a mortgage
65% renters
25% owners without a mortgage
30% renters
Reporting more than four financial stress indicators
34%
40%
15%
Main source of household income
43% government pension or allowance
37% government pension or allowance
18% government pension or allowance
Equivalised disposable household income
$595
$552
$1,009
Net worth (wealth)
$333,400
$118,500
$892,000
Average Weekly Household Expenditure
$623
$956
$1,422
Proportion of weekly expenditure towards ‘basics’
72%
67%
59%

10. Resource vs Consumption - How do they compare?
Low expenditure
Low Economic Resources (LER)
Total population
Family composition of household
12% single parents
13% couple only
16% single parents
9% couple only
7% single parents
20% couple only
Average Age (household reference person)
52.6 years
45.2 years
51.3 years
Tenure Type
20% owners without a mortgage
45% renters
4% owners without a mortgage
65% renters
25% owners without a mortgage
30% renters
Reporting more than four financial stress indicators
34%
40%
15%
Main source of household income
43% government pension or allowance
37% government pension or allowance
18% government pension or allowance
Equivalised disposable household income
$595
$552
$1,009
Net worth (wealth)
$333,400
$118,500
$892,000
Average Weekly Household Expenditure
$623
$956
$1,422
Proportion of weekly expenditure towards ‘basics’
72%
67%
59% H

11. A combined resource and expenditure measure
Lower expenditure
Higher expenditure
Low Economic
Resources (LER)
LER - lower expenditure
(19% of persons)
Likely to be experiencing financial hardship
LER - higher expenditure
(5% persons)
May expect future resources
Income/wealth limitations
Not LER
Higher resources, lower expenditure
(27% of persons)
Potentially saving or accumulating wealth
Higher resources, Higher expenditure
(55% of persons)
Expenditure consistent with resources

12. Household characteristics

13. Tenure type and housing

14. Expenditure 100.0 $803 $1,486 LER Low Expenditure
LER Low Expenditure
LER Higher Expenditure
PROPORTION OF TOTAL GOODS AND SERVICES EXPENDITURE (%)
BASIC EXPENDITURES
69.8
60.7
Current housing costs (selected dwelling)
32.7
23.2
Food and non-alcoholic beverages
4.7
2.6
Domestic fuel and power (selected dwelling)
18.8
16.0
Medical care and health
3.6
Transport
10.2
15.4
DISCRETIONARY EXPENDITURES
29.8
40.6
Clothing and footwear
1.7
1.9
Household furnishings and equipment
1.4
Household services and operation
2.5
3.4
Communication
4.5
Education
2.8
3.2
Recreation
3.3
Personal care
6.6
9.8
Alcoholic beverages
1.8
Tobacco products
1.6
Miscellaneous goods and services
4.0
6.1
Total goods and services expenditure
100.0
Total goods and services expenditure ($)
$803
$1,486

15. Expenditure 100.0 $803 $1,486 LER Low Expenditure
LER Low Expenditure
LER Higher Expenditure
PROPORTION OF TOTAL GOODS AND SERVICES EXPENDITURE (%)
BASIC EXPENDITURES
69.8
60.7
Current housing costs (selected dwelling)
32.7
23.2
Food and non-alcoholic beverages
4.7
2.6
Domestic fuel and power (selected dwelling)
18.8
16.0
Medical care and health
3.6
Transport
10.2
15.4
DISCRETIONARY EXPENDITURES
29.8
40.6
Clothing and footwear
1.7
1.9
Household furnishings and equipment
1.4
Household services and operation
2.5
3.4
Communication
4.5
Education
2.8
3.2
Recreation
3.3
Personal care
6.6
9.8
Alcoholic beverages
1.8
Tobacco products
1.6
Miscellaneous goods and services
4.0
6.1
Total goods and services expenditure
100.0
Total goods and services expenditure ($)
$803
$1,486

16. LER Higher Expenditure
Labour Force Status
Household contains:
LER Low Expenditure %
LER Higher Expenditure
2 or more employed persons
32.6
38.1
1 employed person
37.9
50.0
No employed person but at least 1 unemployed person
5.5
*2.3
No persons in the labour force
23.7
9.8
Total
100.0

17. Income

18. Household Wealth

19. Financial Stress

20. In Summary Low Economic Resources, Low Expenditure
Low Economic Resources, Higher Expenditure
Average Age (household reference person)
46.6 years
40.7 years
Average number of people per household
2.9 persons
2.6 persons
Tenure Type – State and territory housing
10% 5%
Current housing costs
 $263
$344 
No persons in the labour force
24%
Reporting more than four financial stress indicators
 44%
Main source of income is government pension or allowance
41%
20%
Proportion of expenditure on ‘basics’
70% ~ $560 per week
61% ~ $902 per week
Has debt
59% ~ average $58,000 owing
76% ~ average $98,000 owing
Has debt more than 3 times annual income
17%
27%
Has superannuation
 62%
79%

21. Conclusions
Findings indicate two types of Low Economic Resource households. Both are vulnerable, but in different ways.
HES is conducted every six years. Financial stress*, housing costs and debt may be useful to differentiate and further understand vulnerable households when HES isn’t available (biennial SIH)
Child care, Social transfers in kind and additional housing cost and income analysis in late Fiscal Incidence Study early 2018.
* Not currently collected in biennial SIH.