April 19, 2010

Some basic figgerin’

Posted in Uncategorized at 7:36 pm by Chris

To begin:

Median weekly income from all sources for the June 2009 quarter: $538, from here. $538/wk = $27 976/pa (yes, that’s incredibly low, about half of what I’ve seen quoted elsewhere, but the source is as good as they get).

Tax on $27 000/pa = 21%, so cash-in-hand for the median earner = $425/week. Unless statsNZ already did that sum, which I can find no mention of on their website.

And then:

Average weekly rent for a 2-bedroom flat in Auckland (average of medians for Glenn Innes, Panmure, Mt Wellington, Onehunga and Remuera, from here, and if you want a better sample do it yourself): $308/week.

Fark. I think it’s fair to say we have a housing crisis in Auckland. Someone please tell I’ve done my sums wrong.

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3 Comments »

  1. Deborah said,

    Not quite. Not every $ you earn up to $27,976 is taxed at 21%. The first $14,000 is taxed at 12.5%, and the rest is taxed at 21%. So the total tax bill is $4,685. But you need to add in ACC (1.7% in the year to March 2010, or in this case, $476), so the tax + ACC bill is $5,161, leaving after tax + ACC income of $22,815 p.a., or $439 per week.

    The IRD has a handy little calculator for working out how much tax you pay on your income. But you need to add on the ACC as well. ACC rates are increasing for the year ending 31 March 2011, to 2%. On the median wage, that’s an increase of $84 p.a.

    This is just fiddling around the margins. Your basic calculations are in the right order – net income of about $430 per week, and basic rental costs of about $310 per week. You could probably reduce that rental cost by excluding Remmers from your calculations, and looking at middling suburbs rather than “better” ones, which might give a somewhat more fair calculation, but even so, your point will still be right i.e. people on the median wage can’t find anywhere to live in Auckland.

  2. Chris said,

    Presumably the median income includes the good people of Remuera as well as the residents of Glen Innes, so I think it’s fair to include a high-value suburb in the rental average as well.

  3. Sphen said,

    Also assuming single income, and from a very quick look at the 2001 census figures, I’m not sure that’s a reasonable assumption. But it also explains why Auckland pops up on the most expensive places to live list eg http://www.citymayors.com/economics/expensive_cities2.html
    altho the subjectivity of those results is another discussion.


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