Politics has "gone mad", and Australian politicians shouldn't blame a rising tide of anti-Muslim sentiment or opposition to multiculturalism as the main reason.

Instead, according to Labor finance spokesman Jim Chalmers, it's because of a "deeper disillusionment" in society, linked to low wages growth and falling living standards.

And it's that same fall in wages and living standards that has driven the rise in popularity, on the right of politics, of Pauline Hanson, Donald Trump and the successful Brexit vote while on the left, it has driven the rise in popularity of Bernie Sanders and Jeremy Corbyn in the US and UK, respectively.

In a fiery behind-closed-doors speech to the Transport Workers Union, Dr Chalmers argued that the Australian economy - despite strong headline growth figures - was simply "not delivering for most people".