The cost of living is increasing for all households, mainly due to high oil prices, according to the latest release from ABS.
From retirees to politicians, all Australian households face a higher cost of living according to the latest Australian Bureau of Statistics (ABS) release.
The cost of living index (CCI) highlights the differences in the evolution of the prices of goods between five different types of households: employees; elderly retirees; other recipients of government benefits; self-funded retirees; and retirees and beneficiaries.
Annual increases in the cost of living continued to exceed 2.5% in the September quarter for all five groups.
This is largely explained by record fuel prices, due to rising global oil prices against a backdrop economic recovery and supply disruptions, according to ABS ‘hresponsible for prize statistics Michelle Marquardt.
“Over the past 12 months, auto fuel prices have increased by 25 percent, which has been the main contributor to the rising cost of living for Australian households,” Ms. Marquardt said.
More specifically, the cost of living has increased between 2.6% and 2.9% in different households over the past year.
“The impact of price changes on household cost of living may vary between household groups due to different patterns of household spending,” Ms. Marquardt said.
“For example, mortgage interest payments represent a higher proportion of the overall spending of employee households compared to other types of households.
The real estate boom contributes to the cost of living
While “transportation” was the main contributor to the increase in the cost of living, housing also influenced this quarter’s results.
Much of this is because real estate rates saw the biggest hike since 2016, after many councils implemented lower hikes, discounts or freezes last year.
However, interest charges on home loans fell 1.6% this quarter and 8.1% in the past 12 months.
Lower interest rates have lowered the cost of living for households with a mortgage, according to Ms. Marquardt.
“As a result, employee households had the lowest annual increase of 2.6% among household groups,” she said.
Why is this important?
LCI’s latest release comes on the heels of inflation data released last week, which revealed that inflation hit an annualized rate of 3% in the last quarter.
The importance of inflation is that it can influence the RBA cash rate, which was held yesterday at 0.10%.
The rising cost of goods was seen in the latest inflation data; however, the LCI details the increase in the cost of living between households.
The households that experienced the smallest increase in the cost of living were employees and retirees. The cost of living increased 2.6% for both groups.
Retirees and beneficiaries, as well as other recipients of government transfers, experienced an annual increase of 2.7% in the cost of living.
But it was the self-funded retirees who saw the biggest increase in the cost of living, which rose 2.9% in the past year.
These increases in the cost of living were influenced by the rise in the cost of automobile fuel (+ 7.1%); furniture (+ 3.8%); land rates and charges (+ 3.3%); and partially offset by the drop in fruit prices (-8.3%); and clothing and footwear (-3.8%).
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