Real Household Disposable Income

IBISWorld forecasts real household disposable income to inch upward by 3.2% in 2024-25, to $1,165.6 billion. Tight labour market conditions are expected to support wage growth over the year, underpinning a rise in household disposable income. Federal and state governments have invested in several infrastructure projects to facilitate employment and ongoing economic growth in the aftermath of the pandemic. This rise in economic activity is anticipated to motivate businesses to provide more working hours, contributing to growth in household disposable income. However, inflationary pressures and the resulting high interest rates will continue to challenge economic growth, subduing growth in household disposable incomes.

Household disposable income rose strongly over the two years through 2020-21, despite the significant economic shock caused by the COVID-19 pandemic. Unemployment rose, and many Australians who remained employed had their working hours reduced. However, the drop in payroll wages was more than offset by a significant rise in social assistance payments to households. Examples of government policies that increased disposable income include JobKeeper, JobSeeker and Boosting Cash Flow for Employers.