The Australian Financial Review’s Michael Read demonstrated how Australia experienced a sharp reduction in living standards during the third quarter of 2023, an outcome not seen within the OECD as a whole.

Productivity is the key to income levels and it has been falling in Australia. Real output per hour worked, following a brief post-lockdown recovery (the red line below) on the latest data (the June quarter of 2023), was over 7 per cent below the average level at the March quarter of 2022.