The Q4 national accounts release from the Australian Bureau of Statistics (ABS) revealed that households had suffered the largest decline in real per capita household disposable incomes on record, down around 8% from the mid-2022 peak.
New data from the OECD shows that Australia also recorded the largest decline in real per capita household disposable income in the developed world in 2024.
As the above chart from the Guardian shows, Australian real per capita household disposable income fell by 1.1% in 2024, compared with a 1.8% increase across the OECD.
Finland (-0.4%) was the only other developed nation to record a decline in 2024.
The following chart plots Australia’s real per capita household disposable income against the OECD average benchmarked to Q4 2019, just prior to the pandemic.
Australia’s real per capita household disposable income has risen by just 0.1% since Q4 2019, versus a 9.3% increase across the OECD as a whole.
The following chart plots Australia’s real per capita household disposable income since the start of the pandemic (Q4 2019) against other Anglo nations and the OECD average.
Australia’s 0.1% rise in real per capita household disposable income since Q4 2019 ranks poorly against Canada (5.5%), the United States (8.6%), and the United Kingdom (2.5%).
Finally, the chart below shows that Australia’s real per capita household disposable income growth has been much slower than the OECD average since the beginning of the series in Q1 2007.
Over this time, Australia’s real per capita household disposable income grew by only 18%, compared to the OECD’s 27% increase.
Given Australia’s sluggish labour productivity growth and the expected reduction in the nation’s terms of trade, the growth in real per capita household disposable income is likely to remain poor.
Australians will face another lost economic decade unless there is a sustained rebound in productivity growth.
