Earlier this week, MB’s David Llewellyn-Smith presented the below stunning chart showing how Australia’s real wage growth is forecast to decline the most under Treasurer Jim Chalmers in records dating back half a century:
The Guardian’s Greg Jericho has come to a similar conclusion by analysing Australia’s annual real total household disposable income, which is “set to fall below the level they would have been expected to be prior to the pandemic”, according to the Reserve Bank of Australia’s (RBA) forecasts:
According to Jericho, “the Reserve Bank’s estimates would see real household incomes some 3.6% below where they would have expected to be” by the end of 2024, which is “an astonishing fall”.
Moreover, this 3.6% real decline in household incomes would dwarf the 1.7% fall from peak experienced during the late 1970s recession, the 1.2% decline experienced during the 1982-83 recession, and the 1.9% drop over the early 1990s recession.
In fact, “in the 1990s it took nine quarters to get back above the pre-recession peak; whereas currently we are looking at still being below the level we are now in two-and-a-half years’ time”:
The picture would be even worse if the above data was adjusted for population growth and presented in per capita terms, given immigration is predicted to boom over the forecast period:
Federal Budget: Nearly one million net overseas migrants to arrive over next four years.
In just six months of office, the Albanese Government has dropped a wage-destroying immigration bomb while doing nothing to prevent the energy shock from sending inflation to the moon and decimating real household incomes.
The resulting real income smash will destroy Australian living standards at the fastest pace in modern history.
