Australia's growth is currently around average, but dependence on China "remains huge", and China's fortunes are more central to the globe than Britain's decision to leave the EU.

In its report, "Brexit: More huff than puff", Deloitte forecast projects through to the 2020-21 period and flagged that Australia's living standards would continue to fall from the peaks reached when China was booming and coal and iron ore prices were at record highs.

Deloitte said China's fortunes remain more central to the globe, and especially Australia, than Britain's decision to leave the European Union.

"You can see the continuing income squeeze evident in falling profits, weak wages and a federal budget still deeply in the red," the report said.

"Hopefully the worst of that weakness in national income has now passed, although much remains dependent on China. Unhappily, much also remains dependent on Australia's dysfunctional politics."

The report argued the close election saw "major parties effectively say they wouldn't recognise the mandate of the winner", and warned of more gridlock to come.

"Governments will continue to struggle to achieve much needed reforms, as those reforms will almost always be unpopular," the report reasoned.

"In turn that says reform proposals won't make it through the Senate or be shelved before even getting to the Senate ... both better living standards and budget repair require bi-partisanship, and we can't say we expect to see too much of that."

The Turnbull Government was returned to power by a slim majority, and conservative former minister Eric Abetz last week said the Liberal Party's result was a "big kick up the pants".

Australian families heavily indebted

The report also warned Australian families are now the world's most heavily indebted, and families are still taking on debt faster than incomes are growing.

Wage growth hit a fresh record low in the March quarter, with workers pay rising just 0.4 per cent, according to the Australian Bureau of Statistics.

In a state-by-state breakdown, Deloitte warned of a slowdown in resource rich states of Western Australia, Queensland and the Northern Territory, while stronger conditions prevailed in New South Wales and Victoria.

"That is a direct reflection of the shift from a mining construction boom to a housing construction boom," the report stated.

"Yet, as we often caution, no boom is permanent, and chances are today's housing boom will give way to a more challenging period down the track for some states."

Global recovery from the GFC has been patchy and protracted, Deloitte said, and it anticipates increased volatility and risk in the medium term before growth returns to close to trend in the global economy in 2016 and 2017.