31 July 2014
CHOICE has released a new report on Western Australian consumers’ cost-of-living concerns, revealing an anxious picture of the State’s households.
The survey of over 400 WA residents[i] found that in the face of rising bills over the last year, 42 per cent reported cutting back on essential spending and 64 per cent on non-essentials. More than half of those surveyed put entertainment (55 per cent) and clothing (51 per cent) at the top of the list of household cuts.
“Almost one-in-three respondents told us they find it difficult to get by on their current income, with one-in-five saying they have scraped through to payday by living off credit,” says CHOICE CEO Alan Kirkland.
“This reveals some genuine issues with cost-of-living in WA, which is perhaps not surprising at a time when inflation is outstripping sluggish wages growth and local retail sales are fragile,” Mr Kirkland says.[ii]
The CHOICE Cost of Living Report shows the squeeze is hardest on low-income WA households, renters and parents with school-aged children. Fuel and electricity top the list of WA household expense concerns, both at 83 per cent, with food and groceries close behind at 80 per cent.
The survey was undertaken just before the repeal of the carbon tax, and the high concern over electricity is consistent with national trends over the last three years.
“With such a drawn-out debate over the carbon tax it is not surprising to see electricity at the top of the list, although clearly WA prices are driven by a number of factors, including rising infrastructure costs,” Mr Kirkland says.
“We also identified government spending cuts as the main consumer worry in WA, perhaps reflecting the federal political debate, with the future of billions in budget savings, including family payments, still unresolved.”
CHOICE says that in the midst of ongoing concern around housing affordability, renters are doing it particularly tough.
“We found that 39 per cent of renters report difficulty getting by, compared to only 33 per cent of mortgage holders, with nearly half indicating they cut back on essentials last year,” Mr Kirkland says.
CHOICE has over 15,000 members in WA and will explore key issues from the survey at a special consumer forum in Perth this Thursday.
[i] The survey was designed and analysed by CHOICE with fieldwork by GMI/Lightspeed Research conducted with 405 WA consumers aged 18-75 years between 13 and 25 June 2014. Final data has been weighted to ensure it is representative of the Australian population based on ABS Census 2011. Cost of living questions about people’s concerns with expenses is based on the total population including people who do not have a given expense. We have done this to represent overall views.
[ii] For comparison of CPI and wages growth, see Australian Bureau of Statistics, ‘6401.0 - Consumer Price Index, Australia, Jun 2014’ and ‘6345.0 - Wage Price Index, Australia, Mar 2014’. For analysis of retail turnover see Australian Bureau of Statistics, ‘8501.0 - Retail Trade, Australia, May 2014’.