SENATOR DEAN SMITH
SHADOW ASSISTANT MINISTER TO THE SHADOW TREASURER
SHADOW ASSISTANT MINISTER FOR THE COST OF LIVING
LIBERAL SENATOR FOR WESTERN AUSTRALIA
8 July 2026
OECD CONFIRMS LABOR’S COST-OF-LIVING CRISIS IS LEAVING AUSTRALIANS WORSE OFF
The latest report from the Organisation for Economic Co-operation and Development (OECD) has confirmed Australia has experienced one of the sharpest declines in living standards anywhere in the developed world, with Australian families continuing to lose ground under the Albanese Government.
The OECD’s Employment Outlook 2026 shows Australians’ real wages have fallen by around five per cent since early 2021—one of the largest declines across the OECD—while workers across the average OECD country have enjoyed improving living standards over the same period.
Even more concerning, the OECD forecasts Australian real wages will fall again this year as inflation continues to outpace wage growth, further eroding household purchasing power.
The findings come as Deloitte Access Economics warns Australia is facing its weakest sustained period of economic growth since the recession of the early 1990s, with weak productivity, persistent inflation and slowing consumer spending weighing heavily on households.
Together, the OECD and Deloitte reports paint a deeply concerning picture of an economy where Australians are working hard but falling behind, families are being forced to stretch every pay packet further, and living standards continue to decline.
The OECD also identified Australia as one of only 11 OECD countries where the real minimum wage declined over the past year, placing even greater pressure on lower-income workers already struggling with rising household costs.
While Australia continues to enjoy comparatively strong employment and workforce participation, the OECD makes clear these strengths are not translating into higher living standards because inflation continues to erode wage growth and household purchasing power.
The report also reinforces the importance of restoring productivity growth and disciplined economic management.
Instead of tackling the structural drivers of inflation, the Albanese Government has continued to pursue higher spending, adding pressure to an economy already struggling with persistent inflation.
That has made it harder to bring inflation under control and prolonged the cost-of-living pressures facing Australian families.
Key quotes from the OECD’s Employment Outlook 2026:
“Since Q1 2021, real hourly wages in Australia have fallen by approximately 5%, representing one of the steepest declines among OECD countries, while the OECD median recorded slight gains over the same period.”
“This sustained erosion of purchasing power points to persistent pressures on household incomes…These pressures are compounded by a decline in the real minimum wage between April 2025 and April 2026, placing Australia among only 11 OECD countries where this occurred”
Key quotes from Deloitte Access Economics Business Outlook, June quarter 2026:
“Australia’s growth outlook has deteriorated over the past six months … the economy is expected to grow by just 1.3% in 2026-27, with less than 2% annual growth over the next two years – the longest stretch of sub-2% growth since the early 1990’s recession.”
“Headline inflation may remain above 4% for the remainder of the calendar year…households with an average-sized mortgage have already needed to find an additional $350 per month following three interest rate increases in 2026.”
Comments attributable to Senator Dean Smith:
“The OECD has delivered a damning verdict on Labor’s economic record, confirming Australians have suffered one of the sharpest declines in living standards anywhere in the developed world.”
“Australians do not need an OECD report to know they are going backwards, but this this report confirms our living standards have fallen while those in most comparable countries have improved.”
“The OECD’s warnings that real wages are expected to fall again this year means Australian families face the prospect of becoming even worse off.”
“Labor has a spending problem that has fuelled inflation. Kept prices higher for longer and made life more expensive for every Australian household.”
“After more than four years in office, the Albanese Government can no longer blame everyone else for an economy that is leaving Australians poorer.”
“Australians deserve an economy where inflation is under control, wages grow faster than prices, productivity is rising, and every generation has the opportunity to enjoy a better standard of living than the last.”