08 Sep 2017
Marriage equality in Australia would bring economic benefits to the tune of at least $A650 million in the form of additional expenditure related to weddings alone in the first 12 months following successful legislation.
While the macroeconomic implications of this sum are minuscule, for some sectors the impact will be more meaningful.
A government survey has shown the majority of Australians believe the law should be changed to allow same-sex couples to marry.
According to the ABS, of the eligible Australians who voted, 61.6 per cent responded ‘Yes’ and 38.4 per cent responded ‘No’. Nearly 80 per cent of eligible Australians voters participated, with all states and territories recording a majority ‘Yes’ response.
"Marriage equality in Australia would bring economic benefits to the tune of at least $A650 million.” - Cherelle Murphy
According to the 2016 Census, the number of Australians who formally identify themselves as being in a same sex relationship has increased and an increasing number of Australians believe in equal rights for same-sex couples.
If marriage equality is legislated, ANZ Research believes same-sex weddings would have a positive, though very small, impact on economic activity and confidence.
Two years ago, ANZ Research estimated the economic benefits of marriage equality related to weddings alone could be between $A500 million $A550 million in the first year. That figure has now grown.
As pointed out in 2015 note, there are several economic benefits.
· Expenditure on weddings. This could benefit a range of industries including retail trade, hospitality, arts and recreation, and professional services (pre-nuptial agreements and divorce).
· Increased service exports as offshore visitors choose to marry and honeymoon in Australia.
· Australian same-sex couples returning home who would otherwise have married overseas.
In 2016, 273 Australian couples were married in NZ, which was 29 per cent of total same-sex marriages and same-sex civil unions performed in New Zealand that year.
This may further boost the industries listed above.
· Increased state government revenue from same-sex marriage certificate charges and conducting on-site ceremonies in state-run registries of births, deaths and marriages.
· A small boost to consumer confidence is possible. The degree of direct economic impact will depend on the number of same-sex couples who intend to marry.
To assess this, we used the same assumptions as in our 2015 analysis, updated where we have new information.
In the initial phase after any successful legislation ANZ expects pent-up demand to result in higher-than-usual demand for weddings.
This was the case in the Australian Capital Territory during the 35 days in 2013 when marriage equality legislation was in place. Thirty-one same-sex marriages were registered, which was 12 per cent of total marriages over the period. This was clearly an over-representation of same-sex weddings.
According to the 2016 Census, there were nearly 47,000 same-sex couples in Australia. The 2011 Census showed around 96 per cent of individuals in same-sex couples were in a de facto relationship (4 per cent said they were already the husband or wife of a same-sex partner).
Extrapolating that growth rate by half of the past five years’ average rate suggests the pool of possible marrying couples would be around 47,000 to 48,000 by 2018. We assume, based on a 2010 study by the University of Queensland, around half of those couples would choose to marry.
We assume half of all couples who want to marry could do so within 12 months of marriage equality legislation. Therefore based on an average wedding spend in Australia of around $A54,000 the marriage spend would be around $A650 million in the first 12 months.
The risks to this figure are firmly to the upside given our very conservative assumptions. If the whole population of same-sex couples that state a desire to marry (according to the above survey) act within one year of being granted a legal right, wedding consumption would be around $A1.3 billion.
The wedding spend by same-sex couples could be higher than the existing average given their family incomes are on average higher than opposite-sex couples.
That suggests same-sex weddings would boost the estimated $A6.3 billion total spend on weddings by at least 10 per cent in the first year after the legislation. That’s an unsurprisingly large overrepresentation of same-sex compared to opposite-sex weddings. It is however only 0.06 per cent of annual nominal consumption and hence the macroeconomic benefits are minuscule.
There could also be other indirect benefits. The security that comes from a marriage would create an effective welfare safety net according to lobby group, Australian Marriage Equality, as spouses insure each other against a sudden loss of income.
It would also lower levels of stress and mental health problems, which are indirect consequences of legal discrimination and social exclusion according to the group.
Cherelle Murphy is a Senior Economist at ANZ
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
08 Sep 2017
15 Nov 2017