The September quarter national accounts revealed that Australia’s per capita household disposable income fell 0.8% over the quarter to be 4.1% lower year-on-year:
While average earnings per non-farm employee rose 4.7% over the past year and average earnings per hour worked rose 3.1%, both were well below the national account’s 6.8% inflation (GDP deflator) nor the CPI’s 7.3% inflation.
The result is unsurprising given Australian real wages have collapsed to their lowest level since December 2011 against headline CPI, and to December 2015 levels against underlying inflation:
The income situation facing households is also unlikely to improve anytime soon. According to the federal budget’s forecasts, by June 2026 real wages will still be 3.2% below pre-pandemic levels. And by then, they will only be back to the level they were in 2011:
The forecast decline would be the biggest haircut in real wages in this nation’s history.
The federal budget also projected a 56% rise in power prices over the next two years, which will “directly contribute ¾ of a percentage point and 1 percentage point to inflation in 2022–23 and 2023–24” (a massive underestimate) with further second-round impacts likely as businesses pass on higher energy costs to customers.
Thus, the best way for the Albanese Government to lift real Australian incomes is to address the energy crisis head-on, de-link east coast prices from international, and bring down inflation.
Labor must bring the foreign-owned energy cartel to heel, or watch on as Australian real incomes are decimated, businesses are shuttered, and an angry electorate revolts at the ballot box.
