High income earners

IBISWorld forecasts the share of total income received by high income earners to rise by 0.15 percentage points in 2024-25, to reach 40.49%. An increase in total business profit is anticipated to support growth over the year. This will be further supported by a higher performance in the All Ordinaries index and commodities, positively impacting investors. For example, the ASX 200 generated a 7.5% price return over the 2024 calendar year, while gold prices soared 27% (which also helped boost the ASX 200) during the same period, reinforcing resource sector outperformance. The increase in residential property prices is also set to aid in the wealth accumulation of high-income earners, either through selling their properties or due to the appreciation of their real estate investments. CoreLogic reports that housing values nationally have risen by 3.2% year on year as at 30 April 2025. However, ongoing global volatility and a sticky cash rate, still at 4.10% as of May 2025, may constrain growth by limiting investment opportunities. This would increase the cost of leverage and reduce after-tax returns, particularly exposing high-value portfolios to a greater risk of market corrections.

Total business profit in Australia is an appropriate indicator of the share of income that high-income earners generate, given that the quintile accounts for the largest proportion of business owners. Higher income earners also typically derive a more significant share of their income from equity markets. Higher income earners are also expected to hold a greater share of property relative to lower income brackets. Therefore, rising property prices over the past five years have benefited higher-income earners. The adverse effects of the COVID-19 pandemic have been more heavily felt by lower-income brackets over the past five years, notably lower-income earners working in retail and hospitality, as sporadic lockdowns restricted these sectors at the height of the pandemic. However, many high-income earners' business operations and investments were also exposed to the disruptions caused by the pandemic, limiting the increase in the share of total income received by high-income earners during the pandemic.

The share of income received by high income earners has trended upwards over the past two decades, despite sporadic periods of decline and sluggish growth. These declines have generally coincided with periods of slower economic growth when business profits and share values fall, which typically has a greater effect on high income earners as they are more exposed to financial markets. The increasing share of income going to households in the highest income quintile is a trend that is occurring in most developed countries. However, it is slightly lower in Australia due to a relatively high minimum wage, which as of July 1st 2025, will sit at $24.16 per hour. IBISWorld forecasts the share of income received by high-income earners to expand at an average annual rate of 0.37 percentage points over the five years through 2024-25.