The biggest living cost rise in two decades is hitting Aussie households
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As we move further into 2023, Aussie households have been forced to endure one of the steepest year-on-year increases in living costs in two decades.
From struggling with multiple interest rate hikes to digesting the especially troubling costs associated with food, things are as tough as ever for Aussies' finances.
The latest data released by the Australian Bureau of Statistics (ABS) has revealed that the cost of living for Australian households is on the rise, with employee households — people whose primary source of income is their wages — experiencing a 9.3 per cent rise in living costs over the past year.
This is the highest annual increase in living expenses since 1987.
Unfortunately, households with other primary income sources, such as self-funded retirees, have fared just as poorly, with annual living costs increasing by 7.6 per cent — the highest jump since 1999.
And to make matters even worse, age pensioners were also hit hard – seeing an unprecedented 7.3 per cent rise in their living costs.
Mortgages
Analysing figures from the ABS Living Cost Index, Head of Prices Statistics Michelle Marquardt said mortgages constitute a large component of expense for employee households and the rate hikes have been particularly crippling.
'Employee households have recorded their largest quarterly rise since the September 2000 quarter which followed the introduction of the GST, and the largest annual rise since the series commenced in 1999,' she said.
So how big are we talking?
'Mortgage interest charges for employee households rose 26.6 per cent over the quarter, and 61.3 per cent over the year, with banks passing on the Reserve Bank of Australia's cash rate rises to interest rates for both variable and new fixed rate home loans.'
Major components of inflation
Marquardt found that for all households, including pensioners and self-funded retirees, the largest increases in outgoings were associated with Christmas travel and recreation activities, as well as food shopping and bills for utilities like water, power, and gas.
She explained that part of the reason why Aussie households are dealing with such a significant cost of living hike is that large corporations, such as banks and utility suppliers, have increased their business costs, which are then passed on to their customers.
'Annually, food prices rose between nine to ten per cent, and the spike was the result of rises for both purchased meals (such as takeaway foods and restaurant meals) and fruit and vegetables,' Marquardt remarked.
Energy prices
Data released to news sources today reveals that utility prices have increased anywhere between 8-10 per cent, driven by rising wholesale gas and electricity prices that are passed onto consumers.
But the major news was that the country's biggest gas providers all released tariffs on February 1 which, if accepted, will see the average household's gas bill increase by almost $500 per year.
For those with Energy Australia, that's $480 more, Origin Energy customers will pay an extra $370 for the year, and AGL customers must now expect a further $326 extra annual bill.
The silver lining? If you live in NSW, the ACT, QLD, or SA, you're only subject to increases of less than $100.
Members, while this situation can feel intimidating, remember to stay informed, shop around and take control of your finances. Here are some of our top tips to help you plan your finances:
1. Cultivate your own veggie and herb patch. This can save you a fortune on fresh produce.
2. Make sure you are on the best plan for your energy provider. This way you can stay up to date with the most competitive rates.
3. Take advantage of any discounts that are available to your age group. This can be anything from Council rebates to concession cards.
4. Cut back on luxury items, such as beauty and spa treatments and trips.
We wish you all the best in keeping costs low and making smarter shopping decisions. Let’s not let these soaring living costs put a dampener on our retirement years!
What are your thoughts on this? Share them with us in the comments below!
From struggling with multiple interest rate hikes to digesting the especially troubling costs associated with food, things are as tough as ever for Aussies' finances.
The latest data released by the Australian Bureau of Statistics (ABS) has revealed that the cost of living for Australian households is on the rise, with employee households — people whose primary source of income is their wages — experiencing a 9.3 per cent rise in living costs over the past year.
This is the highest annual increase in living expenses since 1987.
Australians are feeling the pinch as the ABS revealed new cost of living figures, which recorded the highest increase in 20 years. Credit: Pexels/Karolina Grabowska.
Unfortunately, households with other primary income sources, such as self-funded retirees, have fared just as poorly, with annual living costs increasing by 7.6 per cent — the highest jump since 1999.
And to make matters even worse, age pensioners were also hit hard – seeing an unprecedented 7.3 per cent rise in their living costs.
Mortgages
Analysing figures from the ABS Living Cost Index, Head of Prices Statistics Michelle Marquardt said mortgages constitute a large component of expense for employee households and the rate hikes have been particularly crippling.
'Employee households have recorded their largest quarterly rise since the September 2000 quarter which followed the introduction of the GST, and the largest annual rise since the series commenced in 1999,' she said.
Employee households will feel the most financial pressure as mortgage interests rose 26.6 per cent over the quarter and 61.3 per cent over the year. Credit: Pexels/Andrea Piacquadio.
So how big are we talking?
'Mortgage interest charges for employee households rose 26.6 per cent over the quarter, and 61.3 per cent over the year, with banks passing on the Reserve Bank of Australia's cash rate rises to interest rates for both variable and new fixed rate home loans.'
Major components of inflation
Marquardt found that for all households, including pensioners and self-funded retirees, the largest increases in outgoings were associated with Christmas travel and recreation activities, as well as food shopping and bills for utilities like water, power, and gas.
She explained that part of the reason why Aussie households are dealing with such a significant cost of living hike is that large corporations, such as banks and utility suppliers, have increased their business costs, which are then passed on to their customers.
'Annually, food prices rose between nine to ten per cent, and the spike was the result of rises for both purchased meals (such as takeaway foods and restaurant meals) and fruit and vegetables,' Marquardt remarked.
Energy prices
Data released to news sources today reveals that utility prices have increased anywhere between 8-10 per cent, driven by rising wholesale gas and electricity prices that are passed onto consumers.
But the major news was that the country's biggest gas providers all released tariffs on February 1 which, if accepted, will see the average household's gas bill increase by almost $500 per year.
Consumers should expect to pay more on their energy bills. Credit: Pexels/ Saya Kimura.
For those with Energy Australia, that's $480 more, Origin Energy customers will pay an extra $370 for the year, and AGL customers must now expect a further $326 extra annual bill.
The silver lining? If you live in NSW, the ACT, QLD, or SA, you're only subject to increases of less than $100.
Members, while this situation can feel intimidating, remember to stay informed, shop around and take control of your finances. Here are some of our top tips to help you plan your finances:
1. Cultivate your own veggie and herb patch. This can save you a fortune on fresh produce.
2. Make sure you are on the best plan for your energy provider. This way you can stay up to date with the most competitive rates.
3. Take advantage of any discounts that are available to your age group. This can be anything from Council rebates to concession cards.
4. Cut back on luxury items, such as beauty and spa treatments and trips.
We wish you all the best in keeping costs low and making smarter shopping decisions. Let’s not let these soaring living costs put a dampener on our retirement years!
What are your thoughts on this? Share them with us in the comments below!
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