The Coalition government has held out personal income tax cuts as the solution to slumping living standards after the revelation household costs have grown faster than earnings for the fifth consecutive quarter.

According to Australian Bureau of Statistics data, analysed in the Australian, average household incomes dropped 1.6% in the year to September, after allowing for inflation, taxes and interest costs.

Despite the Australian economy growing 2.8% over the past year in seasonally adjusted terms, the average growth in compensation per employee was just 0.9%, below the rate of inflation (1.8%).

The deputy Labor leader, Tanya Plibersek, seized on the figures, saying Australia had not seen “such a run of uninterrupted, declining living standards” since the early 1990s.

“Malcolm Turnbull’s response [is] tax cuts for multinationals and multimillionaires and bugger the rest of us,” she told a news conference in Sydney.

The workplace and small business minister, Craig Laundy, said he heard about cost of living pressures “pretty much daily” and the Turnbull government “has a plan” in the form of personal income tax cuts and company tax cuts.

Laundy pointed to the green shoots of recovery such as a survey of economists by the Australian Financial Review, which suggested most believed wage growth would increase in 2018 and the fact that last year’s 3.3% increase in the minimum wage would not completely flow through until June.

In November, Malcolm Turnbull and the treasurer, Scott Morrison, foreshadowed personal income tax cuts in 2018 but the government is yet to provide details.

Asked how the government would deliver personal income tax cuts, Laundy said the treasury was working through the details but the Coalition had “a track record of having delivered on these promises”.

He highlighted other cost of living measures, including the changes to the childcare rebate and downward pressure on electricity prices from energy companies keeping more gas for domestic consumption.

Asked if employers should give their workers a pay rise, Laundy said that as company profits increased, wage growth “historically ... heightens with it”, although there tended to be a lag.

Plibersek said the Coalition had already increased taxes on 7 million Australians, in reference to the 0.5% Medicare rebate rise, which she said would amount to $300 a year for a nurse.

Asked whether company tax cuts were needed for international competitiveness, she said Australia competed “very well” with a highly educated workforce and good infrastructure.

“Most people who point to the competitive advantage of the United States don’t include state taxes when they make these comparisons,” she said, adding that Australia also had dividend imputation, which lowered the effective rate of tax.

Many businesses paid “nowhere near” the headline corporate tax rate and many paid “close to zero”.

In December, the tax office found 36% of the largest public companies and multinational entities in Australia paid no tax in the most recent financial year.

Asked what Labor would do to improve living standards, Plibersek said it would “keep taxes at the low end, particularly on low and middle income earners”.