Australia records biggest income decline in the developed world

Economists have urged Treasurer Jim Chalmers to overhaul Australia’s tax system after new data showed households suffered the largest fall in living standards of any advanced economy over the past year.

Inflation-adjusted disposable incomes have hit their lowest level since June 2019 as high inflation, a rapid increase in mortgage repayments and rising income taxes ravage household budgets, newly released data from the OECD shows.

As a result, a near-record 16.2 per cent of household incomes was lost to income tax in the three months to June, according to the national accounts.

The decline in real incomes over the past year contrasted with the OECD as a whole, where living standards increased 2.6 per cent.

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