KATE EMERY: Why a six-figure salary ain’t what it used to be in Australia

A six figure salary used to be shorthand for a certain kind of lifestyle.

Wealthy, maybe.

Comfortable, definitely.

Scraping by, absolutely not.

Anyone who enjoys reading Australian Bureau of Statistics releases will have seen the signs that this may no longer be quite so, with ABS stats suggesting the average Australian full-time salary is nudging $100,000.

For those who think ABS is something on their car — or just those with a social life that precludes the consumption of data on a Saturday night — that revelation might have arrived via a post last week on a popular Facebook group.

The mother-of-two wrote: “My partner earns $130k annually. Every fortnight we get his pay, yet it instantly disappears towards bills. We have $0. Family have been helping us with essentials and food. But that isn’t a solution. I am not sure what to do.”

The woman goes on to say she would rather not return for work, partly to spend time with her young baby and partly because she’s not sure it’s worth it once daycare and travel costs are factored in.

The post ends like this: “There’s little we can take out of our budget, so we don’t know what to do. I’m at such a loss.”

Is $130,000 no longer enough to live comfortably?

Or is this a case of someone living beyond their means?

Likely a bit of both.

In response to hundreds of comments — some understanding, others. . . less so — the woman clarified that she and her partner rent in Perth, own a cheap car and haven’t had a holiday for a decade. But they have a “lot” of debt from taking out loans for, among other things, groceries.

(This column isn’t about the ethics of “buy now pay later” companies encouraging people to borrow for The Big Shop because my thoughts on that practice aren’t suitable for a family newspaper).

Older generations who have endured tough economic conditions at a time when takeaway coffees and a streaming service subscription weren’t considered necessities are probably reading this and thinking they could trim that household budget.

But this isn’t just about one family.

Because we are hearing this more and more.

Last year it was reported that the number of families on $100,000-plus turning to welfare agencies was up 190 per cent in three years.

Last month an equally bleak report found that renters earning $100,000-plus had to spend 43 per cent of their income to afford the average rent.

The ones struggling on six figures are, to some extent, the lucky ones. Others earning far less are struggling far more.

Because, while someone on $100,000-plus might be spending 43 per cent of their income on rent, that same report found that someone on $80,000 would pay have to pay more than half, or 52 per cent, of their income to pay the average rent. For someone on $40,000 that figure rose to a deeply unviable 93 per cent.

And while more families on $100,000 a year or more are contacting welfare agencies for the first time, the reality is that their hard decisions are the same ones that many other clients of welfare agencies have been grappling with for years, if not their entire lives.

But neither are the struggles of some families who are earning six-figure salaries simply imagined or the result of poor budgeting and an Uber Eats addiction.

In 2021 then Reserve Bank of Australia governor Philip Lowe said the cash rate was “very likely” to stay untouched until “at least 2024”, comments that would have led some homeowners to take on mortgages with a degree of confidence that their repayments would remain affordable for at least a couple of years.

The RBA subsequently hiked the cash rate 13 times between 2022 and 2023.

Rents in Australia’s capital cities have skyrocketed, growing faster than income in Sydney, Melbourne, Adelaide, Perth and Brisbane.

And, of course, inflation has similarly outpaced the growth in wages, meaning most of us have taken a pay cut at a time when prices for everything from groceries and power to water and petrol have been going up faster than Donald Trump’s tariffs against China.

Australians on six-figures who are doing it tough may not be doing it hardest. They are more likely to have options and they are still less likely to be the ones queuing up at Foodbank or sleeping in their car.

But the days when a six-figure salary was a bulwark against hard times are behind us, underscoring just how quickly and completely the cost of living crisis has arrived.