Lexi Webster
Australia is a mixed market economy, with both state and private-owned businesses. The country's economy is largely driven by the mining and agricultural sectors. Each of Australia's eight states has a different level of economic success, with some benefiting more from mining and agriculture than others. The states with the highest income and wealth are Western Australia, New South Wales, and the Northern Territory. However, the worst-performing states are Tasmania and South Australia, with incomes and wealth below the national average.
| Characteristics | Values |
|---|---|
| Richest State | Western Australia |
| Average Household Annual Gross Income | $133,224 |
| Average Household Net Worth | $952,500 |
| National Average Household Annual Gross Income | $107,276 |
| National Average Household Net Worth | $809,900 |
| Second-Richest State | Northern Territory |
| GSP per capita | $96,906 |
| Worst-Performing States | Tasmania, South Australia |
| Tasmania Income | 26% below national average |
| South Australia Income | 19% below national average |
| Tasmania Wealth | 20% below national average |
| South Australia Wealth | 19% below national average |
| State with Highest Number of Exports | South Australia |
| State with Lowest Unemployment Rate | Australian Capital Territory |
| State with Highest Debt Outlook | Victoria |
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What You'll Learn
Western Australia: highest income and wealth
Western Australia is the country's leader in terms of income and wealth. The average household income in Western Australia is $133,224, which is well above the national average of $107,276. In terms of wealth, the average household net worth in Western Australia is $952,500, compared to the national average of $809,900.
Western Australia's income and wealth are heavily reliant on the mining sector. Between 2012 and 2014, household incomes in the state rose by 21%, almost double that of New South Wales, the leading east coast state. During the same period, wealth increased by 24%, again almost double that of the best-performing east coast states. However, the mining sector's fortunes can be unpredictable, and a slowdown in the industry can significantly impact earnings and wealth.
Western Australia encompasses the entire west coast of the country. Its income and wealth levels are significantly higher than the national averages, and other states, such as Tasmania and South Australia, which are well below the national averages. For example, Tasmania's income is 26% below the national average, while South Australia's is 19% lower.
In contrast, New South Wales is the second-best performer in terms of income and wealth. It has a stable economy with diverse industries and substantial infrastructure investments. New South Wales is the only state, apart from Western Australia, with both income and wealth above the national averages.
The Northern Territory has a fluctuating economy, similar to Western Australia's. While it has an average income above the national average, its wealth is below. The territory's economy relies heavily on the mining sector, which provides jobs for over 4,600 people and contributes around $2.5 billion to the state's gross product.
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New South Wales: stable economy, consistent income and wealth
New South Wales (NSW) has a diversified, knowledge-intensive economy, and it is the largest economy of any state in Australia, accounting for about a third of Australia's total economic output and contributing significantly to the country's knowledge-based economy. In 2021-22, NSW's economy was valued at A$660.6 billion, making up 30.6% of Australia's GDP.
The state boasts a highly trained, multilingual workforce, with over half of its residents aged 15-74 being tertiary qualified, and 22% speaking a language other than English at home. Sydney, the state's capital, is home to 42% of Australia's top 500 companies and is the Asia-Pacific headquarters for many multinational companies. NSW also has the largest workforce in Australia, with 4.5 million people contributing to its overall economy.
Agriculture is a key sector in NSW, with the state producing a large share of Australia's hay, fruit, legumes, lucerne, maize, nuts, wool, wheat, oats, oilseeds, poultry, rice, vegetables, fishing, and forestry. NSW is also Australia's most important timber-producing state, accounting for about half of the country's production. The state's viticulture has received increasing international recognition, and it is home to Australia's largest and most valuable Thoroughbred horse breeding area.
In addition to agriculture, NSW has a strong services sector, with 46.1% of Australia's finance and insurance industry based in Sydney. The state also has a broad revenue base, including income tax, and has consistently performed well in terms of wealth and income, with both above the national average. NSW has the largest number of total companies registered compared to other states, and it is home to more than half of Australia's fintech startups.
Overall, NSW's stable and diversified economy, driven by its educated population, contributes significantly to Australia's economic growth and development.
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Northern Territory: high GSP per capita
The Northern Territory has a high gross state product (GSP) per capita, which is the second highest in Australia at $96,906. This is higher than the national average. The Northern Territory's GSP per capita has been recorded at 130,630.000 AUD in 2024, a decrease from 131,581.000 AUD in 2023. The data reached an all-time high of 131,581.000 AUD in 2023 and a record low of 26,334.000 AUD in 1990. The median from June 1990 to 2024 was 68,989.000 AUD. The Northern Territory's GSP is about $23.648 billion, with the mining sector contributing around $2.5 billion. Mining is the principal economic activity in the Northern Territory, providing jobs for over 4,600 people.
The Northern Territory's income is above the national average, but its wealth is below the national average. The territory has seen fluctuations in income and wealth, which is attributed to its reliance on the mining sector. The Northern Territory is the least populated state in Australia, covering a total area of 548,640 square miles with a population of 244,000.
In comparison to other states, Western Australia leads in terms of income and wealth, with an average household annual gross income of $133,224 and an average household net worth of $952,500. However, the mining slowdown has impacted earnings and wealth in this state. New South Wales is a consistent performer with a stable economy and the largest infrastructure investments in the nation. It has both income and wealth above the national average. Queensland is improving in income and wealth but remains below the national average. Victoria's wealth is above the national average due to the housing market, but its income has not reached the national average. South Australia and Tasmania are the worst-performing states, with incomes and wealth below the national average. South Australia's per capita income levels are the second lowest in Australia at around $58,253. Tasmania's GSP per capita is lower than the national average at $50,327.
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Queensland: improving income and wealth
Queensland is one of the states in Australia that is witnessing improvements in both income and wealth. However, the state currently falls below the national average in both these metrics. To further enhance its economic growth and prosperity, Queensland can focus on several key strategies.
Firstly, Queensland can aim to diversify its economy beyond its traditional strengths. While the state has a strong presence in sectors like agriculture, manufacturing, and resources, expanding into emerging industries can help future-proof its economy. This could include encouraging innovation and entrepreneurship in fields like renewable energy, biotechnology, and digital technologies.
Secondly, Queensland can invest in infrastructure development to enhance connectivity and support economic activities. This includes upgrading transport networks, such as roads, railways, and ports, as well as improving digital infrastructure to ensure reliable broadband access across the state. Such investments can attract businesses and create new economic opportunities.
Additionally, Queensland can prioritize attracting foreign investment and promoting international trade. The state can offer incentives to foreign companies looking to establish operations in Queensland, particularly in high-growth sectors. Trade agreements and partnerships with key global markets can also boost Queensland's exports and create more local job opportunities.
Education and workforce development are also crucial. Queensland can invest in upskilling and reskilling programs to ensure its workforce is adaptable and equipped with the skills needed for a changing economic landscape. This includes supporting vocational training, apprenticeships, and partnerships between educational institutions and local industries.
Lastly, Queensland can foster a culture of innovation and entrepreneurship by providing resources and support for local startups and small businesses. Incubators, accelerators, and mentorship programs can help local businesses thrive and create a vibrant startup ecosystem. These businesses are key drivers of economic growth and job creation, so ensuring they have the tools to succeed is vital for the state's overall economic health.
By implementing these strategies, Queensland can continue to enhance its income and wealth, creating a more prosperous future for its residents.
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South Australia: strong exports, weak income and wealth
Australia's economy is considered a mixed-market economy, with both state and private-owned businesses. In 2015, the country's GDP was $1.62 trillion, making it one of the leading economies in the world. The country's economy is heavily intertwined with East and Southeast Asian countries, with China as its main export and import partner.
South Australia has a strong export performance, with a record $4.37 billion worth of local goods sold to China, its largest two-way trading partner, in the year ending in September 2024. This represented a 48% increase. South Australia's exports to the United States, its second-largest trading partner, were valued at $2.14 billion, a 34% increase. The state's total exports reached $17.6 billion, marking the 20th consecutive month of exceeding $17 billion in annual exports. South Australia's manufacturing sector, which includes automotive, pharmaceuticals, defence technology, and electronic systems production, is the main contributor to its exports, accounting for about 11.7% of the GSP.
Despite South Australia's robust exports, the state lags in terms of income and wealth. In 2022, South Australia's average household income was 19% below the national average, and its net wealth was 20% below the national average. The state's per capita income levels are approximately $58,253, the second lowest in Australia.
The contrast between South Australia's strong exports and relatively weak income and wealth can be attributed to various factors. One factor is the state's economic structure, with a significant focus on exports. South Australia's manufacturing sector, which is a key exporter, may face challenges in terms of domestic consumption or value addition, impacting income levels within the state. Additionally, the state's income and wealth distribution may be influenced by factors such as population size, cost of living, and the performance of other sectors.
It is worth noting that South Australia's income and wealth figures are not stagnant, and there may be efforts to address these disparities. The state's income levels have shown some growth, albeit at a slower pace than other states. Fluctuations in export demand and commodity prices can impact the state's overall economic performance. South Australia's consistent export performance and the government's initiatives to support exporters indicate a potential pathway towards improving overall economic indicators, including income and wealth distribution.
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Frequently asked questions
Western Australia is the richest state in Australia, with a gross state product (GSP) of $952,500, which is well above the average household annual gross income.
Western Australia has a strong market for iron ore, the primary commodity, as well as favourable domestic consumption and a thriving jobs market. The state also has the lowest debt levels in the country at 7.5% of Gross State Product.
Tasmania is the poorest state in Australia, with incomes 26% below the national income and wealth average.
