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Growth in Australia's income in the past financial year was the lowest in 54 years.

Wages are falling behind inflation, taxes are rising and households are dipping into their savings.

Falling petrol prices are providing some respite even with the weaker dollar, thanks to an oil glut caused by shale production in the United States and, more ominously, slower growth in China.

Also, electricity prices are falling after years of near double-digit rises.

Inflation is only running at 1.5 per cent but that's based on an average basket of goods and services. Everybody spends differently and it's likely to pick up due to the lower dollar, which has fallen 17 per cent so far this year, and the drought spreading. The Reserve Bank uses 2 to 2.5 per cent.

The weaker dollar is helping the job market, which has surprised economists with its strength when the economy is sluggish. Unfortunately it's also crimped the savings from buying online and increased the cost of overseas travel.

Australia's saving grace, so to speak, has been improving wealth overall as asset prices rise.

But the sharemarket is down almost 15 per cent from its post-global financial crisis peak five months ago. This correction is also dragging down average super returns, though a rally in the bond market and the weaker dollar partly offsetting falls in international equities are keeping losses in check.

Property prices are booming but that's only good if you're (a) an owner and (b) live in Sydney and Melbourne. Besides, they're not climbing as fast as they were last year.

The average super fund shrank almost 3 per cent last month, according to Chant West, although the annual return is still positive.

Low interest rates are proving a mixed blessing. Those they'd help most, first-home buyers, have been squeezed out by high property prices.

And retirees are doing it tough. The income from a term deposit of $100,000 has slumped from $6000 five years ago to $2650. In that time, $100,000 would have shrunk to $89,620 in real terms and that's before having to take out the annual minimum drawdown.

The one consolation is that earnings from dividends have grown. In a $500,000 balanced fund dividend, income would have grown from $37,000 to $44,000, according to Legg Mason.

In fact, a feature of the reporting season was that more dividends were lifted, or introduced, than were reduced. But even then, dividends outstripped the profit growth that pays for them, which can't continue.

Still, about $13 billion will be pumped into households and super funds by corporate Australia from this week until December as dividends are paid, according to CommSec chief economist Craig James. Some of this will leak to offshore investors.

It'll be needed. A raft of state and local government taxes and charges were hiked on July 1 and it's only because 2016 is an election year that the next budget won't be tough.

Even so, the sting from the last two budgets will become more pronounced this financial year.

Meanwhile, the Government is surreptitiously snatching money through fiscal drag, where incomes are pushed into the next tax bracket by inflation or pay rises.

Treasury estimates that someone on average earnings – almost $80,000 – will be pushed from the 34.5 per cent (including Medicare) to the 39 per cent tax rate this financial year. That's a 13 per cent cut in take-home pay on each extra dollar earned above $80,000.

The official measure of living standards, real net national disposable income, peaked four years ago, according to Deloitte Access Economics. It fell another 0.7 per cent in the past year yet  gross domestic product was growing 2.2 per cent.

The discrepancy between incomes and what the country is producing is due to population growth plus the slump in export prices.

So we're digging up more but getting less for it. This pay cut spreads far and wide through the economy as lower profits, wages and tax revenues.

Worse, on a per-capita basis, real net national disposable income fell 2.3 per cent seasonally adjusted last financial year. Almost half of that was recorded in the latest quarter.

Even more telling is that the gap between rich and poor is widening. Or rather, between the middle and the rich.

In the past three years, the poorest group (incomes below around $23,000) and richest (above $260,000) have fared best against their experience of the previous eight years, though still not as well.

The surprise is how badly middle Australia is doing. Their incomes are increasing at only one-sixth the rate they were over the years from 2003-04 to 2011-12.

The figures only go up to 2013-14 but there's no reason to suppose the trend has reversed. On the contrary, it's likely to have accelerated.

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