Real disposable income to get a boost in 2024-25

The news: Real disposable income is due to rise in the next financial year, on the back of the stage-3 tax cuts and higher wages. If inflation falls back, the government estimates that real wages will be growing at their fastest rate in a decade when excluding the Covid pandemic.

The numbers: Treasury forecasts real disposable income to jump 3.5% in 2024-25. The stage 3 tax cuts are contributing 1 percentage point to this rise, with wage growth adding 4.5 percentage points, offsetting a slowing rate of inflation. The average tax cut received is worth $1,888.

The context: The cost of living crisis and inflation remaining higher than desirable has the government focused on increasing the real position of Australian households. Nominal wages are growing at their fastest rate in 15 years, which the government is attributing to a tight labour market and Fair Work Commission minimum wage decisions.

What they said: "We know people are under pressure and that’s why our wages policies and tax cuts for every taxpayer are so important," Treasurer Jim Chalmers said in a statement.