logo
Why your living standards will fall by $75k

Why your living standards will fall by $75k

Perth Now4 days ago
The country's living standards are tipped to fall over the next decade as ailing mining royalties and sluggish productivity smashes every Australian.
Analysis by Westpac senior economist Pat Bustamante found mining delivered more than 50 per cent of the gains in Australians' living standards for the two decades until 2020.
But this will come to an end as falling commodity prices and a lack of investment from the miners themselves means Australia will no longer be the 'Lucky Country.' Australia's living standards per person is tipped to fall by $75,000 over the next decade. NewsWire / John Appleyard Credit: News Corp Australia
'Without change, Australians are in for a period of anaemic growth in living standards over the next decade,' Mr Bustamante wrote in an economic note.
'This will cost the average Australian $75,000 in income over the next decade.'
While living standards is not a direct measurement of how much every Aussie pockets, it does give an indication of the income available to every country's resident by dividing total income by total people.
Mr Bustamante said the contribution mining had made to Australians' living standards had been primarily driven by rising export prices with iron ore which soared in recent decades.
But Westpac says the price of iron ore which is around $US103 a tonne today will slide to $US84 by 2027. Iron ore prices are unlikely to boost Australia's living standards. Picture by: Rebecca Le May Credit: NCA NewsWire
'And while we don't all 'work in the industry', we benefit indirectly from the demand for ancillary services, the investment undertaken by the industry, including in infrastructure like roads and ports, and the tax paid by the industry,' he said.
'Indeed, a large reason why the federal government and the mining states have been able to provide cost of living support, and increase the scope of public services, without becoming heavily indebted is because of the windfalls provided by the mining industry.'
But Westpac warns mining investment 'stalled' in post 2008 and another commodities super cycle is unlikely to occur.
Despite the warning, Mr Bustamante said Australia could offset the falling commodity prices if there is an uptick in productivity.
'Even without the 'free kick' from mineral export prices, productivity and growth in living standards can be put on a sound trajectory,' he said.
'But this requires changes in business practices, policy and culture, which will allow us to benefit from the technological advances already happening and in train.'
Treasurer Jim Chalmers has identified improving productivity as a major focus for the Albanese government's second term.
Mr Chalmers will host an economic reform roundtable on August 19 to 21 to look at improving productivity, enhancing economic resilience and strengthening budget sustainability.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

‘We are not Luddites': AFR readers react to AI productivity boost
‘We are not Luddites': AFR readers react to AI productivity boost

AU Financial Review

time24 minutes ago

  • AU Financial Review

‘We are not Luddites': AFR readers react to AI productivity boost

Almost 75 per cent of readers polled by The Australian Financial Review support a push by the Productivity Commission and business to embrace artificial intelligence as a way to lift productivity and boost the economy, but almost half do not support union involvement in AI regulation. Productivity Commission chairwoman Danielle Wood is recommending the Albanese government overhaul company tax, speed up planning approvals for infrastructure projects and embrace artificial intelligence to lift the economy out of stagnation. She said Australian full-time workers would be at least $14,000 better off by 2035 if productivity growth was boosted.

‘Tyrell-ble': Beloved chip brand Tyrrells pulled from major Australian supermarkets due to low demand
‘Tyrell-ble': Beloved chip brand Tyrrells pulled from major Australian supermarkets due to low demand

7NEWS

time24 minutes ago

  • 7NEWS

‘Tyrell-ble': Beloved chip brand Tyrrells pulled from major Australian supermarkets due to low demand

Australians have been caught off guard by the quiet disappearance of a beloved chip brand from supermarket shelves without warning. UK -born snack brand Tyrrells has been pulled from Woolworths, Coles and IGA stores, without an official announcement. The change was spotted by a frustrated Reddit user who posted about it last Thursday. 'Gone from their shelves without warning or even clearance tags. Didn't even get a chance to stock up,' the user wrote. 'These were f****** good, made in Australia with Aussie potatoes, and at $3.80 for 165g. Price does what it says, without stupid price hikes and fake offers.' Other users echoed the disappointment. 'WHAT! OUTRAGE! They were the only chips I bought,' one comment read. 'These are the king of chips and I am heartbroken,' another said. 'Damn, that's really disappointing. They were the best chips on the shelves,' a third added. 'Absolutely unacceptable. These are the only good chips,' someone else chimed in. 'That's tyrell-ble,' another joked. Snackbrands Australia, the maker of Tyrrells, confirmed the brand has been discontinued due to low demand. 'We always aim to bring delicious snacks to our consumers in line with their needs, however we sadly had to retire the Tyrrells brand from market due to insufficient levels of consumer demand,' the company said in a statement. 'We realise that there will always be true lovers of the brand out there however we need to balance the requirements of our consumers as well as our retail partners when making these tough decisions.' Both Coles and Woolworths confirmed to they are no longer stocking Tyrrells chips. has also reached out to IGA for confirmation. Snackbrands said Tyrrells will still be available 'for the foreseeable future' in some Harris Farm stores, and suggested fans try their other products. 'The good news is that we continue to innovate and offer great alternatives under our Kettle and Natural Chip Company brands,' a spokesperson added. Tyrrells chips can still be found on Amazon, with nine 165g bags of the classic Pot Crispy Salted flavour currently available for $15.86. Some Reddit users reported spotting a few bags at 7-Eleven and The Reject Shop. Tyrrells, originally founded on a farm in Herefordshire, England in 2002, is known for its hand-cooked, premium potato chips made from locally grown ingredients. The brand entered the Australian market in 2014, initially importing products from the UK. From 2016, following its acquisition of Yarra Valley Snack Foods, Tyrrells chips were made locally in Victoria using Australian potatoes. Stream free on

‘Dumb way' Australians measure their superannuation balances as expert shares how to hit $1 million by the time you retire
‘Dumb way' Australians measure their superannuation balances as expert shares how to hit $1 million by the time you retire

News.com.au

timean hour ago

  • News.com.au

‘Dumb way' Australians measure their superannuation balances as expert shares how to hit $1 million by the time you retire

For many Australians, a million in super has been a dream scenario. But it was more than was really necessary. Most Aussies who are retired never even got close and are absolutely fine. But for you? The person who isn't going to retire for ages? It is possible. It's actually even likely, if you are young enough. About half of all people aged 30 will end up with a million in super. But which half? A million dollars in super might be pretty nice to have in the future. Because the cost of living keeps going up. If inflation is high enough, a million dollars might be enough to buy Weet-Bix and keep the lights on! In this story we're going to look at who has what, and who is likely to end up with a million dollars in super. And we are going to look at some amazing graphs. No more averages please When I talk about super, I give the full story. Not just the averages. Averages are, in this context, dumb. Because almost nobody is the average. Super is not like height, where we are all fairly similar and an average is meaningful. When it comes to super, some people are like lego people and some are bigger than giraffes. The following charts break super up by age group. They also break your age group into 20 groups, from the zeroes on the left (no super) to the superheroes on the right (loads of super), and everyone else in the middle, in chunks of 5 per cent. This is useful because it shows you not just the average for your age, but where you stand compared to your peers. You can find yourself in the following charts (there's one for men and one for women) 1. First find your age group, 2. Then find the tallest column that is less than your super balance. That's your column. 3. See where your column stands. If it is the tallest you're in the top 5 per cent, second tallest top 10 per cent, etc. If your bar is near the right side, you're near the top. If your bar is near the left, you're closer to the bottom. Each bar is 5 per cent of that age group. The height of the bar is the minimum dollar amount to be in that group. My super balance is just below the second bar for my age group. Which means I'm in the third group – the top 15 per cent for my age. Not too bad, not amazing. My holidays in retirement might be a week at the coast not a month of cruising the Mediterranean, but at least I should get some holidays! Where will I end up? So … who is likely to end up with a million in super? If we make some simplifying assumptions – say everyone puts in $9000 a year and gets 7 per cent returns, we see the following. The charts are the same as the ones above, but I've coloured red the people who are able to hit a million by age 60. For women, we see about 20 per cent of those aged 35 to 39 will hit a million by age 60. Those whose balances are over $120,000 now are on their way to seven figures. For women under 30, all of them can hit a million. If they put $9000 a year away for 30 more years and get 7 per cent returns the magic of compounding will get them over the line. The following charts are for men. More men aged 35 to 39 will hit a million in super by age 60 – about 30 per cent of them. Again, all men under 30 can hit a million in super by age 60. In reality not everyone under 30 now will get there by 60. People who have no super at age 30 are not likely to start saving $9000 a year. Putting $9000 a year away is a lot for a person making below average income in 2025, so that assumption is a bit dubious, on the other hand some of these people will still be working in 30 years and at that point $9000 a year won't be much. The above charts are best thought of as a simplified model of what's possible. Should you worry about your super? Obviously this is just a projection – a guess, estimate, forecast. If you get promoted to manager or act super frugal you can end up with more than the projection. If someone drops a steel beam on your head or your business goes broke, you end up with less. And if you fall in a fiery volcano the day before your 60th birthday it won't matter at all. Super works only if civilisation still exists at retirement. And the longer the time frame you're looking at the harder it is to predict the future. Eighteen year olds aren't thinking about retirement and honestly good on them. Go have fun. Also, every so often history dishes up a big financial event that crashes markets and destroys wealth. If that arrives in your last five years before retirement, a lot of your good work in saving hard can be undone. The assumption I've made – of 7 per cent returns steadily each year – could come to look ridiculously optimistic. For anyone about to retire and stressing about the cost of living in retirement there is comfort in the knowledge that the pension is going to be there. Politicians have raised the pension age to 67 but no further rises are planned. If you can stretch your working life and savings to age 67 then the pension ($1051 per fortnight for a single) will carry you afterwards, and you needn't worry about super at all!

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store