Men still earn more than women

By Kate Perry

Pay packets swelled by almost 5 per cent over the year to November but male earnings are still way ahead of female wages.

Average weekly earnings including overtime rose 5 per cent for full time workers in the year to November. That sounds decent enough, but the extra income had to stretch to cover higher living costs, rising inflation, interest rate hikes and increasing levels of debt.

The average weekly income for a full time worker hit $1162.20 including overtime in November last year, up from $1107.20 the previous November, according to data released today by the Australian Bureau of Statistics.

The average weekly wage for an Australian male working full time and including overtime jumped 4.9 per cent over the year to $1247.60, while the average female's weekly earnings rose 5.2 per cent to $1009.40.

Excluding overtime, the average weekly wage rose 4.9 per cent to $1112,70. The average male's weekly income, excluding overtime, rose 4.8 per cent to $1180, while the average female's pay excluding overtime rose 5 per cent to $991.60.

Price hikes

The extra money would have come in handy to cover price rises over the year. Basics like milk jumped 10.1 per cent; bread rose 8.8 per cent; vegetable prices were up 8.6 per cent; and takeaways were 4.9 per cent more expensive.

Housing costs went up 5.6 per cent over the year, transport costs rose 5.6 per cent and health related costs jumped 4.1 per cent.

Inflation - or the rate at which prices are rising - is one of the major problems facing the Australian economy at the moment. Recently the rate of inflation breached the Reserve Bank of Australia's target band of 2 to 3 per cent growth. The RBA expects inflation to remain high for at least the next year - meaning more rate rises are inevitable.

Rates pain

In 2007 the RBA raised the official cash rate twice, hitting 6.75 per cent in December. Another rate rise in February lifted the central bank's key interest rate to 7 per cent, with plenty of pointers to another rate rise next month.

The retail banks went a step further than the RBA, opting to not just follow the RBA's hikes with their own, but to also raise their home loan rates in January, even though the central bank's official rate did not move.

The standard variable home loan rates on offer by the big banks are now nudging 8.5 per cent.

Debt trap

According to home affordability data put out by HIA and Commonwealth Bank, the average first homebuyer was paying $437,400 to get into the property market by the tail end of 2007.

Assuming a 10 per cent deposit and a base variable home loan rate of 8.5 per cent, the weekly repayments on a $393,660 mortgage taken out over 30 years would now be $695.

As well as a mortgage, the average Australia is likely to have racked up some credit card debt. The country's ongoing shopping binge has to some extent been funded by credit, with more than $41 billion of credit card debt racked up last year.

The average credit card debt sits at just over $3000. Interest rates and minimum repayments vary between credit card providers. But assuming only minimum repayments were made each month - say around 3 per cent of the outstanding balance - and the interest rate was 15 per cent, it would take 14 years to pay off that debt, including an additional $2005 in interest.