Prime Minister Anthony Albanese has come under fire after claiming household incomes and living standards have improved under his government.
During a heated Question Time on Thursday, Opposition Leader Angus Taylor challenged Albanese, citing national accounts data released on Wednesday.
Australia’s GDP grew 2.6 per cent over the year to December, up from 2.1 per cent the previous quarter, with quarterly GDP rising 0.8 per cent – its fastest pace in almost three years.
Treasurer Jim Chalmers claimed it was proof living standards were rising.
However GDP per capita was a tepid 0.9 per cent for 2025, and only 0.4 per cent in the quarte.
Taylor said the growth figure cited by the government was not the result of increased productivity, but was instead driven by a migration-fuelled rapid population rise.
Albanese rejected the claim, accusing the Coalition of ‘talking Australia down’.
‘The national accounts showed that the Australian economy was growing at its fastest rate in almost three years,’ he said.
Anthony Albanese (pictured) said the new data showed living standards were ‘going up’
‘Household incomes and living standards are going up,’ he said.
‘[The Opposition] only have two settings: tearing each other down, or talking Australia down.’
The Coalition ramped up its attack, highlighting that public demand was outpacing private sector growth.
Shadow Treasurer Tim Wilson pressed Chalmers on whether he still denied ‘the link between spending and driving inflation higher’.
Chalmers has faced criticism that Labor’s government spending is fuelling inflation, an argument echoed by some economists and the Opposition.
They argue excessive public expenditure has contributed to the Reserve Bank’s latest interest rate rise in February, with the cash rate now at 3.85 per cent.
Under Albanese, public spending has sat at roughly 26–28 per cent of GDP, above Australia’s long‑term average of 24–25 per cent – a gap the Coalition says is adding to inflation.
Chalmers defended the government’s approach, arguing the increase was due to defence spending
Under Albanese, public spending has sat at roughly 26–28 per cent of GDP, above Australia’s long‑term average of 24–25 per cent
‘Firstly, public demand in the quarter, the key driver of public demand was defence spending,’ he said.
‘Private demand grew faster and contributed three times more to economic growth than public in annual terms.
‘Within annual private demand more than tripled and public more than halved compared with 2024.’
Chalmers said on Wednesday the latest GDP figures were ‘very encouraging’.
‘Growth in our economy is now much stronger and broader, and that’s very welcome,’ he said.
The economic row came as new figures revealed real wages have declined, meaning wage growth is failing to keep up with inflation.
Australian Bureau of Statistics data shows wages grew 3.4 per cent in the year to December, but inflation over the same period was 3.7 per cent, erasing those gains.
The Coalition argues this means the average worker is poorer than a year ago, estimating Australians have lost about $1,500 in purchasing power each year under Labor.
