Australia experienced the largest fall across the OECD over the past two years. Economists say it will take another two years to recover.
Already a subscriber?Australian households experienced the largest fall in disposable incomes across the OECD over the past two years, and economists forecast it will take another two years for purchasing power to recover to pre-pandemic levels.
The fall in real incomes has taken household purchasing power back to 2017 levels, forcing consumers to cut back.Retail spending was unchanged in July, the Australian Bureau of Statistics said on Friday, despite expectations the stage three tax cuts on July 1 would give consumers the confidence to spend more on discretionary items.
Only Chile and South Africa, where fixed-rate lending is essentially non-existent, have a greater proportion of variable loans, according to the International Monetary Fund. As a result, a near-record 16.4 per cent of household incomes was lost to income tax in the three months to March, according to the national accounts.
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