All households saw increases in annual living costs in the March 2023 quarter, according to the latest data from the Australian Bureau of Statistics (ABS).
Michelle Marquardt, ABS head of prices statistics, said: “increases ranged from 7.1 to 9.6 per cent, all higher than the 7.0 per cent annual increase in the Consumer Price Index (CPI).
Selected Living Cost Indexes (LCIs) by household type and CPI, Australia, quarterly and annual movement (%)
“The magnitude of price changes varies between household types due to their different spending patterns.
“It’s important to note that today’s Living Cost Indexes include the impact of mortgage interest charges, but the CPI does not as it includes the cost of building a new dwelling instead. As a result, living costs for all household types rose more than the CPI,” Ms Marquardt said.
Main annual contributors to cost of living increases (per cent increase) | |
---|---|
Employee | Mortgage interest charges (78.9 per cent) Food (7.9 per cent) |
Age pensioner | Food (8.2 per cent) Housing (8.4 per cent) |
Other government transfer recipient | Housing (7.4 per cent) Food (8.3 per cent) |
Self-funded retiree | Recreation (10.0 per cent) Food (8.0 per cent) |
Pensioner and beneficiary (PBLCI) | Housing (7.8 per cent) Food (8.3 per cent) |
“Living costs for employee households recorded the largest annual rise of all household types, at 9.6 per cent; the largest increase since this series started in 1999. The last time the CPI recorded an annual increase of 9.6 per cent was in 1986.
“Employee households were particularly impacted by increases in mortgage interest charges, which are a larger proportion of their spending than for the other household types. Mortgage interest charges rose 78.9 per cent over the year. This was up from a 61.3 per cent annual rise in the December 2022 quarter reflecting the Reserve Bank of Australia’s cash rate rises,” Ms Marquardt said.
Quarterly living costs
Compared to the previous quarter, living costs for all household types increased between 1.3 and 2.2 per cent in the March 2023 quarter. All household types, except self-funded retirees, experienced a quarterly increase in living costs higher than the CPI (+1.4 per cent).
“Higher prices for health, housing, food and interest charges contributed to increased living costs for all household types,” Ms Marquardt said.
Main quarterly contributors to cost of living increases (per cent increase) | |
---|---|
Employee | Mortgage interest charges (11.0 per cent) Food (1.5 per cent) |
Age pensioner | Health (7.8 per cent) Housing (3.0 per cent) |
Other government transfer recipient | Housing (2.9 per cent) Health (9.8 per cent) |
Self-funded retiree | Health (4.3 per cent) Food (1.6 per cent) |
Pensioner and beneficiary (PBLCI) | Health (8.6 per cent) Housing (2.8 per cent) |
“Self-funded retirees recorded the smallest quarterly increase (+1.3 per cent) of all household types. These households have a larger proportion of their spending on international holiday travel and accommodation than the other household types. As international holiday travel and accommodation prices fell in many destinations due to the start of the off-peak season, this had a bigger impact on self-funded retirees,” Ms Marquardt said.