Living costs to outpace wage growth leaving families $21,000 worse off

Working families will be thousands of dollars worse off over the next four years as wages fall behind the cost of living.

The Federal Government’s May budget forecast wage growth would be outpaced by the cost of living over the next two years.

It will finally increase and reach the same level over the third and fourth years.

Families on average household incomes are likely to be down anywhere between $9,000 and $21,000.

A couple earning $170,000 will be $3,800 worse off this year, and $4,300 next year.

Australian working families are expected to become $21,000 worse off over the next four years as wages fall behind the cost of living (stock image)

Their loss is expected to skyrocket to $21,000 by the end of the four years.

A single parent family will also lose out on $9,114 throughout the same period.

The figures are based on modelling commissioned by Labor deputy leader Richard Marles.

Mr Marles said the massive wage loss was a kick in the guts for hardworking families.

‘Based on the government’s own numbers, over the next four years the pay of working Australians will not keep pace with the cost of living – that is, Aussies will be working more and affording less,’ he told Herald Sun.

A single parent family will also lose out on $9,114 throughout the same period (stock image)

‘Families are going to be forced to make really tough decisions all because of this government.’

The low and middle-income tax offset was extended for another year in the May budget and will provide a tax break from up to $1,080 when 2021/22 tax returns are lodged next year.

‘This is more money to spend in local businesses, giving them the confidence to take on an extra worker, offer an extra shift or buy a new piece of equipment,’ Treasurer Josh Frydenberg and Finance Minister Simon Birmingham said in a joint statement.

For businesses with an annual turnover below $50 billion their tax rate will fall to 25 per cent from 26 per cent, the last in a series of incremental reductions.

Bigger businesses will still be paying a tax rate of 30 per cent.