David Gruen, who heads treasury’s macroeconomic group, has said Australian income growth will halve over the next ten years.
“The next decade will see the slowest income growth in Australia in half a century,” he said, according to the article.
According to the Australian Financial Review, he told a conference today that falling terms of trade and the accelerating withdrawal of baby boomers from the workforce will eliminate two of the key drivers of income growth.
Which means income will grow by less than one per cent over the next decade. The historic average, over the past 50 years, is about two per cent.
This means less income tax for governments, at the same time as Australia’s ageing population needs increased services such as healthcare.
There’s more here.