Australia took its interest rate medicine – and it has poisoned our living standards

‘The main reason why our living standards have fallen is because the Reserve Bank has been trying with all its might to reduce them.’ Photograph: Mark Baker/AP

I always worry when I hear politicians or economists talk about how the economy needs to be administered some painful medicine. Inevitably it means people suffering for no good reason. Right now the medicine of interest rate rises is poisoning the economy as living standards collapse.

If ever there was an example of the disconnect between “the economy” and what people actually experience, it came with the release of the annual gross state product (GSP) figures, which measure state economies much like GDP measures Australia’s economy.