Living costs for employee households rose 1.5 per cent in the June 2023 quarter, according to the latest data from the Australian Bureau of Statistics (ABS).
Michelle Marquardt, ABS head of prices statistics, said: “All household types saw rises in living costs equal to or higher than the Consumer Price Index. The impact of price changes on household budgets varies between household types with their different spending patterns.
“Increases in living costs in the June 2023 quarter ranged from 0.8 per cent to 1.5 per cent. Employee households recorded the largest rise of all household types.
“Higher prices for insurance, food and housing contributed to increased living costs for all household types.”
Insurance premiums rose across house, house contents and motor vehicle insurance. Meals out and takeaway foods, and fruit and vegetables contributed to the rise in Food costs. Strong demand for rental properties amid a tight rental market contributed to the rise in Housing costs.
Annual living costs
A significant difference between the Living Cost Indexes and the Consumer Price Index (CPI) is that they include mortgage interest charges rather than the cost of building new dwellings. Increasing interest rates over the year have contributed to living cost rises ranging from 6.3 per cent to 9.6 per cent. These are all higher than the 6.0 per cent annual increase in the CPI.
Over the past 12 months, higher food and utilities prices contributed to increased living costs for all household types.
“Annually, food prices rose between 7 and 8 per cent, driven by rises for meals out and takeaway foods, and fruit and vegetables. Utilities prices rose between 12 per cent and 14 per cent, driven by higher wholesale prices for gas and electricity being passed on to consumers,” Ms Marquardt said.
Living costs for employee households recorded the largest annual rise of all household types, at 9.6 per cent.
“The rise in annual living costs for employee households is 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,” Ms Marquardt said.
Employee households were most impacted by rising mortgage interest charges, which are a larger part of their spending than for other household types. Mortgage interest charges rose 91.6 per cent over the year. This was up from a 78.9 per cent annual rise in the March 2023 quarter reflecting the impact of the Reserve Bank of Australia’s cash rate rises and the rollover of some expired fixed rate mortgages to higher rate variable mortgages.