An interesting prediction suggests Australians could be thousands of dollars better off within a decade, but the nation’s top international economic official says major changes are needed to make it happen.

Imagine having an extra $14,000 a year to help cover household bills, enjoy retirement or simply take some pressure off the family budget.

That’s the potential financial benefit being highlighted by Mathias Cormann, Australia’s former finance minister and now secretary-general of the Organisation for Economic Co-operation and Development (OECD).

Cormann has warned that Australia’s sluggish productivity growth is holding back wages and living standards, with the country becoming increasingly expensive for ordinary households.

His message is straightforward: unless Australia changes the way its economy operates, the cost-of-living squeeze could continue for years.

The $14,000 figure comes from Productivity Commission modelling showing that restoring productivity growth to its historical average could make full-time Australian workers substantially better off by 2035.

Productivity measures how much value workers and businesses produce with the resources available to them. When it improves, businesses can potentially pay higher wages without passing additional costs on to consumers.

Cormann believes Australia needs sweeping reforms to achieve that growth, including changes to income and company taxes, greater competition and faster housing construction. He’s also urging governments and businesses to embrace artificial intelligence, arguing that new technology offers opportunities to improve efficiency and strengthen the economy.

But what does this mean for older Australians?

For those still working in their 50s and 60s, stronger wage growth could improve retirement savings and provide greater financial breathing room.

However, the $14,000 is not a guaranteed pay rise, government payment or increase to the Age Pension.

Retirees living on fixed incomes would not automatically receive the projected benefit, while proposed changes to consumption and property taxes could affect household budgets differently.

Cormann has also questioned the effectiveness of temporary government rebates, arguing that lasting improvements in living standards depend on stronger economic growth.

The challenge now is whether governments are prepared to pursue potentially unpopular reforms, nd for Australians watching every dollar, the bigger question remains whether those promised economic gains will eventually reach their own pockets.