The AFR has revealed where Australia’s wealthiest reside. The newspaper names the top suburb where the average taxable income was $325,343 in 2019-20 when the Australian Tax Office mined its data on us.
And the best income-earning suburb is Peppermint Grove/Cottesloe in Perth!
Of course, this has always been a suburb for rich listers and up-and-coming WA’ers. Peppermint Grove/Cottesloe really came into focus when the likes of Alan Bond and the star entrepreneurs of the WA Inc rorts affair became national celebrities, ultimately for the wrong reasons.
Wikipedia tells us that: “Peppermint Grove is an affluent western suburb of Perth, Western Australia on the north bank of the Swan River at Freshwater Bay. Its local government area, the smallest in the country, is the Shire of Peppermint Grove. The suburb was named after its trademark Swan River peppermint trees lining many streets.”
To local Perth residents, this tiny suburb is tagged “millionaire’s row”, but the actual average income (i.e. taxable income) is $325,343. In 2018-19, it was $179,376 and the suburb was in sixth spot.
If you want to see how your suburb rates, check out the AFR’s tables. For Sydney, the top addresses are Darling Point, Edgecliff, Point Piper which all come under the postcode 2027, coming in at the Number 2 wealthiest suburbs in the country.
The third wealthiest was Bellevue Hill (postcode 2023), followed by postcode 2030, which houses Dover Heights, Watsons Bay and Vaucluse. Sixth on the cards was Mosman/Split Junction, while seventh went to Hunters Hill/Woolwich.
Woollahra came in at Number 8, then Northbridge. Double Bay, which was Number 1 in 2018-19, took 10th position.
The top Melbourne postcodes were 3142 in at Number 5, which has Toorak and Hawksburn.
While these stories are interesting, I like to ponder what these observations teach us.
So what explains such a big jump in the average taxable income for this top Perth postcode? Mining booms are always great for WA, pumping up the state’s riches. The kinds of people who live in this Perth suburb (i.e. entrepreneurs, investment bankers and other executives of corporations) would’ve been beneficiaries of the boom.
The stock market was no great help because the Coronavirus crash took away the gains that were building up in 2019 until share prices plummeted in March 2020.
What about house prices? Well, they fell and then recovered strongly, but these don’t actually help income unless the residents sell the properties or rent them out.
So we can rule out the stock market and property prices as the big reason for such a spike in income in Perth’s top suburb.
So what was the big change over 2019-20 compared to 2018-19? Well, it would have to be the lockout WA imposed that kept others out and WA’ers in. The McGowan Government boasted about its economy and its lockdown in March this year with this press release:
The state’s Premier Mark McGowan really crowed about the pluses of his lockout: “Western Australia's State Final Demand growing by 7.2 per cent over the past two years is a remarkable achievement - something nobody would have thought possible throughout a global pandemic,” he said. “My Government has provided almost $1.7 billion of business assistance over the past two years - and we will continue to provide necessary support where required as we move into this next phase of the pandemic.”
It looks like the rich people of Peppermint Grove/Cottesloe were huge winners over what was a very strained time for most Australians trying to earn income over 2019-20.
That’s a PhD paper waiting to be written by some young smart economist, with a title like: How lockouts work better than lockdowns!