On the most recent comparable data from the final three months of last year, living standards have gone backward.

While consumer prices increased by 0.7 of 1 per cent during that quarter, household incomes only went up 0.1 of 1 per cent.

That’s what we were told on Radio National yesterday.

Ben Phillips from Canberra University’s National Institute for Social and Economic Modelling says there’s a shift under way in our standard of living. Export prices are lower than they have been, the cost of services such as school education, electricity, and gas are going up. Incomes are not keeping pace.

Household debt is an issue.

Professor David Peetz of Griffith University says that the Bureau of Statistics’ wage price index, a key measure of household income, fell to its lowest level on record in the December quarter. He points out that the labour market is largely non-unionised and hence vulnerable with unemployment increasing.

The question is whether this is a temporary blip or the beginning of a longer trend. Given the commentary from the experts it’s looking like the latter.

In this context it looks as though interest rates will be on hold, given also that the CPI came in lower than expected. That was courtesy of falls in the price of furniture, clothing, footwear and car repairs, not big on my shopping list.

Given that the age of entitlement has ended, Treasurer Hockey is now looking at the Audit Commission big picture.

Fiscal stimulation seems very far from his mind. Hockey says “nothing is free” and warns that spending people have come to take for granted will be wound back. Co-payments and means tests are on the agenda.

I’m in favour of means tests, in moderation, but I fear Hockey’s ‘vision’ is to shrink Australia.