The standard of living in Australia has been in sharp focus during this election campaign. Both major parties have been at pains to make their case to the electorate as to why they are better prepared to address this issue.

At the centre of the issue is uncertainty in the global economy due to the tariffs announced, and now paused, by President Trump after ‘Liberation Day’, and whether or not Australia is headed towards a recession.

When asked by reporters before the first election debate if Australia was at risk of a tariff-fuelled recession, Peter Dutton answered that we are if Labor is able to form government on May 3.

In contrast, the Prime Minister would not answer the question, opting instead to laud his government’s tax cuts and labelling the tariffs as ‘self-harm’ imposed on America by President Trump.

What has been missing from this discussion thus far has been the fact that mainstream Australians have been in a personal recession for the last two years.

According to the Australian Bureau of Statistics, GDP per capita has declined in seven of the last eight quarters. What this confirms is that Australians have been experiencing a decline in living standards years before the full economic impact of Trump’s tariffs is realised.

More importantly, it means any further economic decline cannot be solely blamed on President Trump and his tariffs.

This is particularly important to remember during an election campaign; we cannot ignore the culpability that the incumbent federal government owns in driving down living standards.

Having experienced two consecutive years of GDP per capita decline for the first time since 1982-83, research by the Institute of Public Affairs has found Australians are now at least $5,400 worse off than prior to the 2022 election.

This personal recession has been caused by two major factors: a weak private sector and out-of-control migration intakes.

There has been a total absence of improved economic productivity from the private sector, which is burdened by a record amount of red tape from both state and federal governments. Not only that, the private sector is increasingly being crowded out of the economy, with private sector investment and net exports only contributing a paltry 6 per cent of Australia’s economic growth under the Albanese government. Excluding the pandemic period, this is the lowest it has been in at least 50 years.

Out-of-control migration intakes are the main reason that headline economic growth has remained positive during this term of government. However, although the overall economic pie may have grown, it is leaving everyone, including new migrants themselves, with a decreasing slice in the absence of strong private sector growth.

There has been a complete lack of vision from this government regarding economic reform, the only reason the Albanese government has thus far been able to avoid a technical recession is because of their unprecedented migration intakes, as well as and debt-fuelled public spending. Last month’s budget revealed that federal spending will reach its highest level in 40 years next financial year. This is simply not sustainable in the long term.

The Albanese government is set to be the only federal government on record to oversee a real decline in GDP per capita over its term in office. It cannot simply blame events in the United States for Australia’s long-term decline in living standards.

Australians deserve an election debate in which both parties, particularly the Coalition, present an alternative economic vision underpinned by sustainable private sector growth, reductions in government spending, and genuine solutions to our cost-of-living and housing affordability crises.

This small target election campaign is not going to solve Australia’s big problems. Point scoring on whether we are going to enter an economy-wide recession is missing the point. Australians are already in one.

We need this election to drive an alternative vision for the economy, because more of the same simply won’t cut it anymore.

Saxon Davidson is a Research Fellow at the Institute of Public Affairs