Bold claim: Australians feel the pinch of a salary crisis more than ever, and 2026 is proving it to be real for many households. If you’ve started the year short on cash, you’re far from alone. An industry expert lays out why the sense of being stretched is now a common experience across the country.
Rhianna Farnan, who leads communications at mortgage broker Derwent Finance and serves as State President of Tasmania for the Finance Brokers Association of Australia (FBAA), pulls back the curtain on the sobering state of wages in Australia today. In a recent social-media video, the 27-year-old Hobart resident examines how drastically the value of a $100,000 salary has shifted over the decades.
Using the Reserve Bank of Australia inflation calculator, Farnan notes that a $100,000 salary in 1990 would translate to about $248,000 in today’s dollars. Conversely, earning $100,000 now would be roughly equivalent to about $40,000 in 1990 terms. “This is why Australians feel broke,” she explains.
The video quickly resonated online, drawing more than a million views and a flood of comments from viewers sharing their own struggles. One commenter wrote about paying for fuel and bread on a two-salaried household, expressing disbelief at how “broke” they felt. Others described having combined incomes around $210,000 or $320,000 yet still facing tight finances, with little room to save for big goals like a home deposit. Several people noted that house prices in their areas have surged while their salaries have not kept pace.
Speaking with news.com.au, Farnan said a frequently heard sentiment is that buying a house isn’t as hard as people claim. She points out that older generations often say they earned “peanuts” yet managed to buy property, but she argues those memories ignore today’s harsher financial reality. Even with lower interest rates, the overall cost of buying property today remains much higher than in the past, making homeownership far more challenging.
Currently, Australia’s average annual income sits above $100,000, roughly quadruple what it was in the 1990s. Yet the national median house price nears $1 million, a stark rise from about $184,000 in 1990. When adjusted for inflation, that 1990 figure would be around $457,000 today, highlighting a widening gap between earnings and home prices.
In the mortgage-broking sector, Farnan says the feeling of being “broke” is a daily encounter. She notes that even households with combined incomes like $210,000 may find it tough to manage costs such as daycare, working parents’ expenses, groceries, and rising everyday outlays—costs that have become more burdensome than before the Covid era.
The groups most affected include those who bought homes during the Covid-19 period when rates were at historic lows. With the cash rate now at 3.85%, current payments may stretch budgets further than expected.
Farnan believes the cost-of-living squeeze remains a defining feature of 2026. Many people are cutting back on small luxuries—like morning coffees—hoping to find extra savings. Her outlook hinges on future interest-rate movements: if rates hold steady or rise only modestly, many households should be able to cope. If rates keep climbing, she warns that more households could struggle again, even those who had recently started to save as mortgage repayments eased.
For those feeling the strain, Farnan urges a practical approach: this likely isn’t a permanent situation, but it’s a good moment to audit finances. Consider trimming nonessential expenses—nail and eyelash appointments, weekend dining or takeaways, subscriptions—and, most importantly, review your budget to identify where you can cut back without sacrificing essential needs.
