Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

The government has used average Australian earnings because, in our judgement, that is the most appropriate measure for the purpose of estimating the relevant impact of this personal income tax cut. The government has used the average full-time wage as calculated using the average weekly ordinary time earnings determined by the Australian Bureau of Statistics. This measures the average wage of a full-time worker. In 2014-15, it was $77,200 per annum and was forecast to exceed $80,000 in 2016-17. The Australian Bureau of Statistics classifies earnings as pre-tax earnings payable to award standard or agreed hours worked. It is calculated before deductions such as superannuation have been made. It does not include amounts that are salary sacrificed, overtime payments, bonuses not attributable to the reference period, government payments and reimbursements for travel and entertainment.

Conversely, the average wage measures both part-time and full-time average incomes. The average weekly earning in 2014-15 was $59,100 per annum. The Australian Bureau of Statistics classifies an employee as being full-time where they ordinarily work 35 hours or more per week. As I have indicated, in the government's judgement this is the most appropriate measure.