Now, we all know there is pressure on all of us with the cost of living. Increased prices in supermarkets put pressure on disposable household income. “Shrinkflation” is obvious with items showing smaller sizes, but maintained at the old price for the previous larger sizes. Taxes on fuel and alcohol have increased dramatically, which has increased pressure on household disposable income. Shoppers are now focusing on ‘needs’ rather than ‘wants’ in an effort to make their household disposable income go further. It is pretty obvious that our living standards, we once considered one of the highest in the world, has now rapidly declined.
The promise by Labor to cut household power bills by $275 per year never happened. Instead, power prices increased by at least 20%. Albanese and his frontbench ministers promised some 90 times that Labor would deliver a substantial cut in household power bills. Liar, liar, pants on fire! Albanese’s commitment to raise real wages has also fallen foul of the facts, with some households 8% worse off in real terms. By the time wages increase and tax cuts are delivered in July, you will still be worse off in ‘real terms’.
The latest accounts from the Australian Bureau of Statistics (ABS) showed that real household disposable income per capita collapsed by about 6% in the year to September 2023 to be tracking at around 2012 levels! To date, things have not improved but have actually declined even further.
Australia is now the worst nation out of all the OECD countries with regard to real gross disposable income per capita. (Organisation for Economic Cooperation and development of which 37 democracies have signed up to). The graphs are mind boggling when compared to other countries.
Australia’s decline was the largest in the year to September 2023, some 7.8% worse than the average gain of 1.7% across OECD countries.
Real household disposable income per capita is one of the best measures of how Australian households are feeling. It calculates in income after taking account of taxes and mortgage payments. At the same time, bracket creep is ratcheting up the average rate of tax paid, while aggregate measures of income and economic growth are driven by population growth, not productivity.
It is now projected that Australia’s real household disposable income per capita won’t recover to 2015 levels until 2026! In other words, we have gone so far backwards that even the promised wages increase and tax cuts will still not change the status quo.
Australia’s collapse of living standards extends beyond household income.
Underpinning the collapse of living standards is the federal government’s extreme immigration policy. Australia recorded 518,000 net overseas migration in 2022-2023, which was by far the largest intake on record.
The extreme overseas migration helped to place downward pressure on household income and has driven the nation’s rental vacancy to historical lows and crash landed everything in sight. Australia has the lowest rental availability among its peers.
The upshot is that Australia faces another ‘lost decade’ of falling living standards.
Unfortunately, our government does not have the strong leadership, nor the intelligence of ministers to focus on and rectify the real problem of our declining living standards.
Instead, we have a weak government more concerned with prioritising climate change, renewable resources, immigration, the Voice and other minority groups that make a big noise.
And it will get worse, because we have government ministers, such as our energy minister Chris Bowen, who claims wind energy and solar energy are cheap and clean. He is blind to the reality that despite all of this, our power bills are astronomical.
Now, Bowen’s claim that wind energy is cheap and clean is being routinely exposed by evidence that the economic viability of these projects (via the huge offshore wind farm in Western Australia) and solar farms is simply non-existent. If it is so cheap, why are power prices continually rising? More on this in the next issue.
Cheers from the Gecko.
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