The past few years have been devastating for Australian households, with the latest Australian Bureau of Statistics (ABS) national accounts revealing a 6% decline in real per capita household disposable income. According to the ABS, this decline has brought household incomes down to levels last seen in 2011. Moreover, using OECD data to the June quarter of 2023, recent analysis from The Australian Financial Review (AFR) has highlighted that Australian households have experienced the most significant decline in incomes globally.
Further exacerbating the situation, new analysis from the ANU’s Centre for Social Research and Methods, as cited in The Australian, has reported that middle-Australian households, including those with an after-tax income of between $100,000 and $150,000, have suffered the largest fall in living standards. Similarly, Australian real inflation-adjusted wages have plummeted by 7.3% between June 2020 and September 2023, bringing them to the same level as June 2010. This decline mirrors the trajectory of real per capita household disposable income, which has also dipped to 2012 levels.
The outlook for Australia’s jobs market in 2024 appears equally bleak. A recent interview with several labor market economists by The New Daily suggests that Australia’s unemployment rate will continue to rise due to slower demand for workers and strong growth in labour supply, primarily driven by high net overseas migration. Melbourne professor Jeff Borland elaborated that the workforce shortages brought about by the COVID-19 pandemic have taken time to filter through the market, contributing to the delayed manifestation of a slowing economy in the unemployment rate.
In light of these challenges, Australian households are facing an unprecedented economic squeeze. The severe decline in disposable income and wages, coupled with the looming threat of rising unemployment, point to a period of significant financial hardship for many families. The future remains uncertain as households grapple with the profound impact of these economic downturns.
