Interesting analysis from economics writer/blogger John Menadue on the phenomenon of falling living standards in Australia:

Low wage growth is an economic problem because the very dynamic of capitalism is a circular one, with wages driving consumption and consumption driving wages. That’s the simple mathematics of Economics 101 – a point missed by those business lobbies who continue to press for more “flexibility”, a term which suggests accommodation of the changing needs of corporations and employees, but which in reality means one-way flexibility on the corporate side and a squeeze on real wages, manifest most starkly in recent demands for cuts in weekend penalty rates...

...I suspect that readers don’t need official statistics to demonstrate that their real incomes are going backwards. The data used in this article is almost two months old, and by now people will be experiencing higher utility charges and higher fees for other services such as public transport and toll roads – the September quarter consumer price index usually shows a sharp rise as cash–strapped state governments lift fees and charges to compensate for Commonwealth–imposed fiscal stringency.

Will it take hard data showing that real wages are actually falling for our politicians to wake up to the need to change their policies?

The part that I don't understand is nobody recognises the danger that falling wages poses to whole financial system - a system that relies on fundamentally ever-increasing debt in order to keep the whole show going: It will grind to a complete halt if people have less money to secure borrowings with. Added to that pressure is the enormous growth in the cost of gas and electricity - things that grow at or above the official inflation rate of 1.9%.