Editing Economy of Australia (section)

===Economic Analysis Following the 2020 Recession===
Following the 2020 recession, triggered by the COVID-19 pandemic, Australia faced ongoing economic challenges under the Albanese Labor government, elected in May 2022. Inflation surged, migration exceeded planned targets, and housing affordability worsened, intensifying cost-of-living pressures. Inflation peaked at 6.1% in May 2022 due to global supply chain issues and energy price shocks,<ref>{{cite web |title=Consumer Price Index, December Quarter 2024 |url=https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release |website=Australian Bureau of Statistics |access-date=2 April 2025}}</ref> falling to 3.6% by March 2024 and 2.4% by December 2024, within the Reserve Bank of Australia’s 2–3% target.<ref name="ABS CPI 2024">{{cite web |title=Consumer Price Index, December Quarter 2024 |url=https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release |website=Australian Bureau of Statistics |access-date=2 April 2025}}</ref> However, core inflation remained at 3.5% in September 2024, with services inflation at 4.6%, indicating persistent domestic pressures.<ref>{{cite web |title=Australia: Staff Concluding Statement of the 2024 Article IV Mission |url=https://www.imf.org/en/News/Articles/2024/10/02/mcs-australia-staff-concluding-statement-of-the-2024-article-iv-mission |website=International Monetary Fund |date=2 October 2024 |access-date=2 April 2025}}</ref> Food prices rose 11.7% and gas 33.9% since 2022, outpacing wage growth of 3.5% annually,<ref>{{cite web |title=Factsheet: Inflation in Australia |url=https://www.aigroup.com.au/resourcecentre/research-economics/factsheets/factsheet-inflation-in-australia/ |website=Ai Group |date=31 January 2025 |access-date=2 April 2025}}</ref><ref>{{cite web |title=Wage Price Index, December 2024 |url=https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/latest-release |website=Australian Bureau of Statistics |access-date=2 April 2025}}</ref> while energy rebates capped electricity rises at 2.0% instead of 14.9%.<ref>{{cite web |title=Government spending and inflation |url=https://www.aph.gov.au/About_Parliament/Parliamentary_departments/Parliamentary_Library/Budget/reviews/2024-25/governmentSpendingInflation |website=Parliament of Australia |date=29 May 2024 |access-date=2 April 2025}}</ref>

Labor’s migration policy adopted flexible targets, setting 190,000 places for 2023–2024 and 185,000 for 2024–2025, unlike the Coalition’s stricter caps,<ref>{{cite web |title=Migration Program planning levels |url=https://immi.homeaffairs.gov.au/what-we-do/migration-program-planning-levels |website=Home Affairs |access-date=2 April 2025}}</ref> with a four-year planning cycle from 2025–2026 based on recommendations.<ref>{{cite web |title=AUSTRALIA - Impact of the 2024-2025 Federal Budget on Migration Policy |url=https://newlandchase.com/australia-impact-of-the-2024-2025-federal-budget-on-migration-policy/ |website=Newland Chase |date=21 May 2024 |access-date=2 April 2025}}</ref> However, net overseas migration hit 446,000 in 2023–2024, exceeding the 395,000 forecast by 51,000, after peaking at 528,000 in 2022–2023,<ref>{{cite web |title=Overseas Migration, 2023-24 financial year |url=https://www.abs.gov.au/statistics/people/population/overseas-migration/latest-release |website=Australian Bureau of Statistics |access-date=2 April 2025}}</ref><ref>{{cite web |title=Immigration – Budget Review 2024-25 |url=https://www.aph.gov.au/About_Parliament/Parliamentary_departments/Parliamentary_Library/Budget/reviews/2024-25/Immigration |website=Parliament of Australia |access-date=2 April 2025}}</ref> far above historical averages of 200,000–250,000. This “big Australia by stealth” was linked to six quarters of negative per capita GDP growth, with GDP per head down 0.3% in 2023–2024.<ref>{{cite web |title=ABS data confirms big Australia by stealth |url=https://ipa.org.au/publications-ipa/media-releases/abs-data-confirms-big-australia-by-stealth-migration-reduction-promise-shattered |website=Institute of Public Affairs |date=19 September 2024 |access-date=2 April 2025}}</ref><ref>{{cite web |title=National Accounts, December 2024 |url=https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/latest-release |website=Australian Bureau of Statistics |access-date=2 April 2025}}</ref> The Productivity Commission highlighted strains on housing and infrastructure from this surge.<ref>{{Cite web |last=corporateName=Commonwealth Parliament; address=Parliament House |first=Canberra |title=Immigration |url=https://www.aph.gov.au/About_Parliament/Parliamentary_departments/Parliamentary_Library/Budget/reviews/2024-25/Immigration |access-date=2025-04-01 |website=www.aph.gov.au |language=en-AU}}</ref>

Housing affordability declined, with approvals at 89,734 in 2024, below the 21,000 monthly needed for Labor’s 1.2 million homes target by 2029, causing a 12,000-dwelling shortfall in January 2025.<ref>{{cite web |title=Australian housing is a misery machine |url=https://www.macrobusiness.com.au/2025/02/australian-housing-is-a-misery-machine/ |website=MacroBusiness |date=10 February 2025 |access-date=2 April 2025}}</ref><ref name="MacroBusiness 2025"/> According to the Housing Industry Association (HIA), Australia constructed approximately 180,000 homes in the previous year, falling well short of the 240,000 needed annually to meet demand. This suggests a yearly shortfall of about 60,000 homes, highlighting the severity of the housing crisis.<ref>{{Cite web |title=Budget must tackle barriers to housing supply |url=https://hia.com.au/our-industry/newsroom/industry-policy/2025/01/budget-must-tackle-barriers-to-housing-supply?srsltid=AfmBOooiq2LmSMRw9nx8nJwKRDhk-_gS9xobiOEL4GS7f6MaFiyybaT9 |access-date=2025-04-01 |website=hia.com.au |language=en}}</ref><ref>{{Cite web |last=March 2025 |first=Leith van OnselenMonday 31 |date=2025-03-31 |title=Why Australia has a housing crisis |url=https://www.macrobusiness.com.au/2025/03/why-australia-has-a-housing-crisis/ |access-date=2025-04-01 |website=MacroBusiness}}</ref> Alan Kohler attributed a 30–40% cost rise to taxes like GST and stamp duty, pricing a two-bedroom apartment at $1 million, unaffordable for median earners at $65,000.<ref>{{cite web |title=Alan Kohler: Housing affordability is largely a matter of tax reform |url=https://www.thenewdaily.com.au/finance/2024/10/28/alan-kohler-housing-affordability-tax-reform |website=The New Daily |date=28 October 2024 |access-date=2 April 2025}}</ref><ref>{{cite web |title=Personal Income in Australia, 2024 |url=https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/personal-income-australia/latest-release |website=Australian Bureau of Statistics |access-date=2 April 2025}}</ref> He noted barriers like unionisation costs (up 40% since 2020) and NIMBYism, despite 59% of Sydney and 52% of Melbourne residents favouring denser housing.<ref name="MacroBusiness 2025">{{cite web |title=Why Australia has a housing crisis |url=https://www.macrobusiness.com.au/2025/03/why-australia-has-a-housing-crisis/ |website=MacroBusiness |date=31 March 2025 |access-date=2 April 2025}}</ref><ref>{{cite web |title=Setting Alan Kohler straight on housing policy |url=https://grattan.edu.au/news/setting-alan-kohler-straight-on-housing-policy/ |website=Grattan Institute |date=2 April 2024 |access-date=2 April 2025}}</ref> Rents rose 16.4% and housing costs 12.9% since 2022, driven by migration.<ref name="IMF 2024">{{cite web |title=Australia: Staff Concluding Statement of the 2024 Article IV Mission |url=https://www.imf.org/en/News/Articles/2024/10/02/mcs-australia-staff-concluding-statement-of-the-2024-article-iv-mission |website=International Monetary Fund |date=2 October 2024 |access-date=2 April 2025}}</ref>

Under Labor, Australian households experienced the sharpest decline in real disposable income of any country in the OECD. According to a comparative analysis of OECD data, real per capita household disposable income in Australia fell by 8.0% over the two years leading up to March 2024. This stands in marked contrast to the OECD average, which recorded a 2.6% increase over the same period.<ref name="afr.com">https://www.afr.com/policy/economy/how-australia-became-the-world-s-biggest-cost-of-living-loser-20241118-p5krgk#:~:text=Disposable%20income%20is%20even%20worse&text=On%20this%20measure%2C%20Australians%20have,cent%20higher%20across%20the%20OECD.</ref>

This performance positions Australia as an outlier among developed economies and has prompted growing concern over the government’s management of the cost-of-living crisis. While most OECD nations saw household incomes either stabilise or rise, supported by targeted fiscal interventions and effective inflation control, Australian households endured a sustained erosion of purchasing power.<ref>https://www.macrobusiness.com.au/2024/12/australians-suffer-world-record-income-collapse/</ref>

The severity of this decline cannot be attributed to global forces alone. Analysts have pointed to domestic policy settings—ranging from taxation and income support to housing affordability and wage policy—as compounding factors under Labor's administration.<ref>https://www.macrobusiness.com.au/2024/09/australian-households-suffer-lost-decade/</ref>

The fall in real incomes coincided with heightened inflationary pressures, elevated interest rates, and a housing market that remains inaccessible for many. The result has been a tangible reduction in living standards, particularly for middle- and low-income earners, with stagnant wages failing to keep pace with rising costs. Critics argue that the government’s fiscal strategy has lacked the responsiveness seen in peer nations, leading to Australia’s unique position as the OECD’s worst performer on this key economic indicator.<ref name="afr.com"/>