Incomes in Canberra dropped 11 per cent over five years, the largest drop in any region across the country, as national incomes remained largely stagnant.
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The new figures, from the Melbourne Institute's Household Income and Labour Dynamics Australia (HILDA) survey, show just how hard public service cuts have hit the capital, Labor MP Andrew Leigh says.
The latest HILDA report, from Melbourne University, found incomes across the nation were largely stagnant between 2012-13 and 2016-17, with a national increase of 0.6 per cent. Some areas recorded decreases, including 5.2 per cent in Perth and a 7 per cent drop in the rest of Western Australia.
Dr Leigh said the results showed cuts to the public service under the Liberal government had had a more marked effect on the Canberra economy than the end of the mining boom had in Perth.
"Just to put it in some perspective as a nation we've been talking about the impact on Perth of the end of the mining boom, but Perth real household incomes are only down 5.2 per cent over the course of the period since 2013," Dr Leigh, whose electorate covers Gungahlin and Belconnen, said.
"The drop in Canberra has been more than twice as big, so the hit to Canberra households has been twice as big Perth households at the end of the historic mining and construction boom."
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The median household income in the ACT plunged by $8200 a year over four years, from $74,394 to $66,230. Nationally, median incomes rose slightly, from $47,603 to $47,889. According to the survey, the drop in wages was most significant between 2012-13 and 2014-15 before dropping slightly again in the 2016-17 survey.
Canberra's median income is much higher than most of the country, although the Northern Territory overtook Canberra for the first time this century, at $67,061, in the latest data.
Canberra incomes experienced rapid growth between 2006 and 2011, then fell fast until 2015 and have not recovered.
Professor Roger Wilkins, deputy director of the HILDA survey, said cuts to public sector jobs could be a factor in the decrease, but said the survey didn't investigate the causes in drops.
"One candidate could be that there has been some reductions in public service jobs, under the Coalition government. That would be one hypothesis."
Professor Wilkins said he was surprised by the result, but pointed out household income figures released by the Australian Bureau of Statistics this month also showed a drop in income in the ACT.
He also pointed to slow wage growth across the country as explaining the almost imperceptible increase nationally.
"For many Canberra federal public servants they've seen their wages in real terms go backwards after inflation," Dr Leigh said.
"Canberra public servants in many departments are earning less than they did in previous years and that has flowed through to the private sector, so it's meant that private sector employers aren't increasing wages at the same pace, the scale of the drop is massive."
The shadow assistant minister for treasury said the data showed Canberran households were hurting.
"More than one in 10 public servants in Canberra have lost their jobs under the Liberals, that means two earner households are turning into one earner households, it means that Canberrans are feeling the squeeze at local level."
Canberra Times analysis published earlier this year shows one in 10 jobs were lost in the ACT since 2013, including jobs moved from Canberra to other parts of Australia under the decentralisation policy.
ACT Liberal Senator Zed Seselja disputed the figures at the time, saying 14,500 jobs were lost due to decisions by the former Labor government, referring to positions lost due to efficiency dividends introduced, "more efficient management structures", as well as jobs lost due to programs discontinuing all in the 2013-14 budget under Labor.
Reducing public service jobs by 12,000 was an election promise from Tony Abbott in 2013, and after forming government, the decision was made that a further 2,500 jobs needed to go to make up for a funding shortfall.