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Cost of living pains surge for Australian households

Electricity, fuel, food and groceries top list of cost concerns in latest CHOICE report

30 July 2015

CHOICE has released its latest national Consumer Pulse Report, showing across-the-board increases in cost-of-living concern for Australian households with 65% of consumers cutting back to cope with the financial pressure.
 
This is the consumer group's fifth quarterly survey[i], and provides a full year of data tracking household pressures. For the first time it has found rising concern across every major household expense, with electricity, fuel, food and groceries topping the list.
 
"Households are feeling increased pressure across the board, with 85% of Australians saying their household bills and expenses had increased over the year. Electricity remained the biggest cost concern for the fifth consecutive quarter," says CHOICE CEO Alan Kirkland.
 
"Concern over fuel prices has surged from 69% in March to 78% in June, and now sits alongside food and groceries as the second-biggest pressure. This reflects last week's CPI figures, which showed the largest quarterly rise in fuel prices since December 1990, offsetting a big fall in the previous quarter."[ii]
 
"Cost pressures are not evenly distributed, with renters, low-income households and the unemployed most likely to be struggling, and families with school-aged kids the group most concerned about rising household expenses.
 
"NSW is clearly the stand-out economic performer, with around four-in-ten rating the economy good compared to about a quarter in other states.
 
"As the political debate focuses on credit card interest rates, it is worrying that one-in-five Australians say they lived off a credit card to cover the gap until payday.
 
"We are concerned to see these signs of household stress at a time when inflation and mortgage interest rates are historically low.
 
The latest CHOICE Consumer Pulse report also points to an end-of-financial-year sting in insurance premiums, with concerns over the costs of home and contents insurance (60%), car insurance (68%), and health costs including health insurance (73%) all rising to their highest levels across the survey's five quarters.
 
"June is a time when many households are renewing insurance cover, and rising premiums are clearly a cause of concern," Mr Kirkland says.
 
"Our advice is don't pay the 'lazy tax' by settling for a premium increase without testing the market and looking for a better deal on insurance, whether it's home and contents, health or car insurance."
 
Read the full CHOICE Consumer Pulse findings at choice.com.au/consumerpulse
 
Top findings:

  1. For the first time since June 2014, concern over every major household expense has increased. Electricity, fuel and food & grocery prices top consumers' list of concerns.
  2. One in five people have lived off a credit card in the last twelve months to get through to payday.
  3. Families with school-aged children are feeling the squeeze, with nine out of ten saying bills increased in the last twelve months – significantly higher than the national average (85%).
  4. Three-quarters (74%) of parents with children under five are worried about childcare fees.
  5. Few are positive about the state of the Australian economy but people in NSW are much more optimistic than their interstate counterparts. Nearly four in ten people in NSW say the economy is good, compared to about a quarter of people in all other states.
  6. More Australians are worried about their finances now than in September 2014; half are worried about interest rates (50%), two-thirds are worried about their level of saving (66%) and just under half are worried about their level of debt (48%), including mortgage and credit card debt.

Cost of living concerns

Cost of living financial concerns

Cost of living most worried about

[i] The survey was designed and analysed by CHOICE with fieldwork by GMI/Lightspeed Research conducted with 1372 consumers aged 18-75 years between 15 and 24 June 2015. Final data has been weighted to ensure it is representative of the Australian population based on the 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 the overall views of Australians.
[ii] See Australian Bureau of Statistics, '6401.0 – Consumer Price Index, Australia, Jun 2015'

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