Episode Details

Believe it or not, over the past decade, the average Australian household has seen their real income grow by just 0.6 per cent a year. Compare that to the United States, where the equivalent figure is 22.6 per cent. Even Canada and the UK have left us behind.

We used to be the envy of the developed world. Back in 2018, The Economist ran a cover story calling us "the wonder down under." Today, we're recording our worst decade of income growth since the late 1950s.

Now, most people will tell you this is about interest rates, or inflation, or bracket creep, and those things are real. But I don't think they're the real story. I think the real story is underneath all of that, in the numbers that describe who we are, where we live, and how many of us there are.

Today Simon Kuestenmacher and I discussed why Australia's living standards have slipped so sharply.

We unpack the decade-long slowdown in real income growth and what it means for everyday Australians.

We explore how weak productivity growth has limited wage gains, business investment, and national prosperity.

We discuss how population growth has lifted headline GDP, while per-person wealth has failed to keep pace.

We also look at housing affordability, generational wealth gaps, and why younger Australians feel left behind.

Takeaways

• Real income growth has stalled, leaving households feeling poorer despite a growing economy.

• Productivity has flatlined, so wage gains no longer keep up with living costs.

• Population growth boosts GDP, but it dilutes wealth when output per person falls.

• Migration fills essential jobs, yet many roles add little to measured economic output.

• Older Australians have benefited more from property ownership and long-term asset growth.

• Younger households face bigger mortgages, later careers, and less time to build wealth.

• Retirees are increasingly renting, exposing them to rising housing and living costs.

• Overinvesting in property starves productive businesses of capital for innovation and expansion.

• Bracket creep quietly lifts tax bills as inflation pushes workers into higher tax brackets.

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