Aussie Incomes Lag in OECD Amid Productivity Concerns
Aussie Incomes Lag in OECD Amid Productivity Concerns
0
Australia has recorded a sluggish rise in real per capita household disposable income over the past decade, making it the slowest growth among major English-speaking countries.
According to OECD data, from Q1 2015 to Q1 2025, Australian incomes only increased by 3.5%, starkly contrasted with Canada's 8.9%, the United States' 20.6%, and the United Kingdom's 8%.
The OECD average during this period was 18.7%, further highlighting Australia's economic challenges.
Recently released data from the Australian Bureau of Statistics signal a slight turnaround, with incomes rising by 2.4% in the 2024-2025 fiscal year—the most significant increase since late 2021. However, incomes are still 6.9% below their peak during the COVID-19 pandemic in mid-2022, returning to levels similar to 2020.
Veteran economist Chris Richardson has cautioned that without improvements in productivity, Australian incomes may not reach their pandemic-era peak until 2037. He attributes the recent increase to temporary factors, such as stage three tax cuts, lower inflation, and reduced interest rates, rather than sustained economic health.
Richardson states that unless productivity significantly improves, any gains in income will be unsustainable. He further suggests that if the Reserve Bank's forecast of a 0.7% annual productivity growth holds—a figure already optimistic compared to recent performance—Australian living standards may only climb back to their 2021 height by 2037.
The prospect of productivity growth appears challenging, given government strategies involving high levels of low-skilled immigration and increasing energy costs associated with achieving net-zero emissions. These factors could contribute to stagnant productivity, deteriorating living standards, and further deindustrialisation in Australia.
As policymakers and industry leaders grapple with these issues, significant measures to bolster productivity will be essential in reversing the current trajectory and securing long-term prosperity.
The Australian Securities and Investments Commission (ASIC) has introduced a new, consolidated legislative instrument that relates to financial advice. This update follows through on ASIC's May announcement regarding the remake of three existing advice-related instruments. - read more
Australia’s leading financial institution, the Commonwealth Bank of Australia, has openly criticised the Reserve Bank of Australia (RBA) for its calculations related to a proposed reduction in debit and credit card transaction fees. The RBA suggested that the reform would save Australian businesses $1.2 billion annually and benefit the majority of companies, a claim that the Commonwealth Bank strongly disputes. - read more
Welcome to our comprehensive guide on the essential steps to launching your start-up successfully. Whether you're a budding entrepreneur or an experienced business owner looking to refine your approach, having a solid plan in place is crucial for success. - read more
Entering the sphere of commercial property financing can often present a complex challenge for small business owners. In today's market, understanding the nuances of securing the necessary capital to invest in property can make the difference between the success or stagnation of a business. - read more
Need Help Finding a Loan?
All finance quotes are provided free (via our secure server) and without obligation. We
respect your
privacy.
Knowledgebase
Asset-Backed Security (ABS): A financial security backed by a pool of assets, such as loans, leases, credit card debt, royalties, or receivables.
