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Choice survey reveals Aussies are under the pump trying to pay their bills

Choice survey reveals Aussies are under the pump trying to pay their bills

New research has revealed nine out of 10 Aussies say they are struggling to manage their household budgets amid the rising cost of living.

A survey by consumer group Choice found 90 per cent of more than 1000 participating households said their bills had increased since 2021 – with the biggest financial burdens health insurance and utilities.

Choice editor Marg Rafferty said almost all Aussie households were feeling the pressure of price rises, with the report highlighting how difficult it’s become to manage the household budget.

“Among the biggest financial burdens, the research found, was health insurance and utilities,” she said.

“Cost of living pressures continue to be a major issue for Australians.”

Almost three in five respondents reported concerns about their disposable income, with pulse data revealing 23 per cent of households are struggling to get by, which is up from 18 per cent in June last year.

Ms Rafferty offered advice to Australians struggling to keep up with their bills, saying “there’s a chance you could be getting a better deal elsewhere”.

“Our research shows you can save up to $935 a year on hospital cover by switching to a similar policy with a different provider.” she said.

“It always helps to spend some time comparing what’s on the market.”

According to the Australian Bureau of Statistics, household spending in June was up more than 10 per cent compared with the same time period last year.

But household bill hikes are not the only thing Aussies are spending their money on, with residents feeling the pinch of an additional 15 per cent increase on services and 5 per cent rise on goods.

The monthly figures, which were released on Tuesday, revealed both discretionary and non-discretionary spending increased following an inflation rate of 6.1 per cent.

Non-essential costs rose by 10.8 per cent, driven by spending in recreation and cultural activities, while essential spending rose by 9.8 per cent, due to the rising cost of transport.

The most significant area of ​​spending was on transport, up 22.7 per cent, driven by higher oil prices due to the ongoing war in Ukraine and the demand for air travel.

Spending at hospitality businesses like hotels, cafes and restaurants was up 17.1 per cent in what is viewed as a positive return to pre-pandemic levels.

There was also strong growth in spending on clothing and footwear – up 16.3 per cent, as well as a 15.5 per cent increase in recreation and culture.

Jacqui Vitas, from the Australia Bureau of Statistics, said June marked the 16th consecutive month of through-the-year increases in total household spending.

“This was off the back of consistent decreases in total household spending from March 2020 to February 2021, as responses to Covid-19 were experienced across the country,” she said.

“Spending categories most impacted from Covid-19 responses – transport, hotels, cafes and restaurants, and clothing and footwear – have now returned to pre-pandemic levels.”

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Cost of living: Australians react by eating out, spending $3 billion extra

Cost of living: Australians react by eating out, spending $3 billion extra

recession? Who cares! Aussies are spending wildly on dining out as the ship goes down.

Australia is officially sick of cooking dinner, and we’re done with Uber Eats: we eat in now. At current restaurants.

The latest retail trade data shows Australians have had it up to here with food that comes in plastic boxes and cardboard tubs. We want to go out. We want ambience. We want proper printed menus, commercial crockery, and the kind of wine glasses you’d never have at home because they are as big as your head.

As the next chart shows, it’s not that we’ve stopped buying takeaway food altogether – it’s just that we’ve gone mad for restaurant spending.

Forget pre-pandemic levels – Aussies spent $3 billion dollars on restaurants, cafes and catering in just the month of June. That’s unheard of. We don’t give a damn about Covid and we also don’t care about the possibility of an upcoming recession. We are living for the moment.

Special shout-out to Tasmania too, where spending has gone from under $30 million to almost $60 million. I feel sympathy for the stressed and overworked waiters of Hobart just looking at this chart.

There’s a lot of pent-up birthday dinners in the above charts. Wedding anniversaries too, as well as simple nights at the pub.

I know I’ve been taking the chance whenever I can order a coffee in a cup that doesn’t have a little plastic lid. I actually sit in a cafe and sip it. This chart shows I’m not alone.

Whether Australians are thronging to fine dining or greasy chip joints, we are doing it despite Covid. The most recent retail spending data is from the month of June, so it doesn’t fully capture the latest wave driven by variant BA.5, but Covid has been an ever-present threat throughout this period when restaurant spending was rising. We’re not post-pandemic yet, even if we would like to be.

But what is different from 2020 and 2021 seems to be attitudes: We couldn’t give a stuff. Restaurateurs must be loving it (while infectious disease physicians might have another view).

fear fatigue

Australians are overly concerned. Before we celebrate this too much, we should remember the many with chronic illnesses and immune susceptibility for whom fear fatigue is not an option. Covid is killing more of us than ever. What’s different is we’ve assimilated that information. It’s part of the background hum now, rather than a salient and terrifying factor that affects people’s choices.

New risks are more frightening than old risks. Which is why you might think economic factors could be impeding restaurant spending. There’s a lot of chatter about recession risk, and when you look at surveys of consumer confidence, people report feeling gloomy. ANZ calls it “recession-level” confidence.

Once upon a time consumer confidence was a good guide to spending. But not now, apparently! Real recession level confidence doesn’t make people go out for dinner. What does might be an unemployment rate of 3.5 per cent – ​​by far the lowest in decades.

I know what you are thinking

You’re thinking: Hey, the rise in spending could be because of higher prices. What if it’s not more restaurant meals, just bigger restaurant bills because of inflation?

It’s a really good thing to look at, which is why I checked that data as soon as I saw the spending data I showed you above.

So what does the price data show? It shows the price of restaurant meals shot up in the June quarter, by 1.4 per cent. That is high in historical terms! But not nearly enough to explain how spending rose 10 per cent in the same period.

The numbers really do reflect more plates of scrambled eggs, more Quarter Pounders, more pho, more Diet Cokes and more froyo. It’s a sign Australia has changed: We’re fearless now.

Jason Murphy is an economist | @jasemurphy. He is the author of the book Incentivology.

Read related topics:Cost Of Living

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Business

ABS: Monthly household spending indicator reveals 10 per cent more spending

ABS: Monthly household spending indicator reveals 10 per cent more spending

Household spending in June was up more than 10 per cent compared with the same time last year, as Australia struggles through skyrocketing cost of living.

The latest monthly spending figures, released on Tuesday by the Australian Bureau of Statistics, show household spending increased 10.2 per cent through the year, with a 15.9 per cent increase on services and a 5.0 per cent increase on goods.

Both discretionary and non-discretionary spending increased – not surprising given the rate of inflation is 6.1 per cent.

Discretionary spending rose by 10.8 per cent, driven by spending in recreation and cultural activities, while non-discretionary spending on essentials rose 9.8 per cent, due to the rising cost of transport.

The most significant area of ​​spending was on transport, up 22.7 per cent, driven by higher oil prices due to the ongoing war in Ukraine and the demand for air travel.

Spending at hospitality businesses like hotels, cafes and restaurants was up 17.1 per cent in what is viewed as a positive return to pre-pandemic levels.

There was also strong growth in spending on clothing and footwear – up 16.3 per cent; as well as a 15.5 per cent increase in recreation and culture.

Jacqui Vitas, from the Australia Bureau of Statistics, said June marked the 16th consecutive month of through-the-year increases in total household spending.

“This was off the back of consistent decreases in total household spending from March 2020 to February 2021, as responses to Covid-19 were experienced across the country,” she said.

“Spending categories most impacted from Covid-19 responses – transport, hotels, cafes and restaurants, and clothing and footwear – have now returned to pre-pandemic levels.”

Queensland and Victoria recorded the highest state-based increases in spending through the year, spending 12.4 per cent and 11.8 per cent respectively more.

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Inflation: Why you could soon be back earning what you did back in 2008

Inflation: Why you could soon be back earning what you did back in 2008

It’s the grim graph that suggests Australian workers face a horror “back the future” scenario on wages.

Real wages – workers’ income that has been adjusted to reflect the rising cost of living – are going backwards.

Perhaps, that’s no surprise to anyone who has tried to buy fresh fruit and vegetables at the supermarket lately amid rising prices and massive interest rate hikes.

But Dr Greg Jericho, the Center for Future Work’s Policy Director has some bad news.

It’s even worse than it sounds.

As households struggle with the rising cost of essentials, real disposable household income is set to fall for months to come sending workers back to what they were earning in real terms over a decade ago.

“The latest Reserve Bank Statement on Monetary Policy estimates that real wages will continue to fall until the end of next year, at which point they will be back to 2008 levels,” he said.

Dr Jericho describes the graph as “horrific”.

“In real terms, prices and wages since 2008 will have gone up by exactly the same amount. So there’s no improvement,” Dr Jericho said.

“Your wages might have gone up 20 per cent. But prices have gone up by 30 per cent.

“It’s horrible. Normally it goes up. Before the pandemic, it was rising, perhaps a bit slower than it was during the mining boom, for example, but it still keeps going up. It’s pretty drastic.”

For three years, the RBA predicts wages are going backwards.

The RBA now estimates that real wages will fall fourteen consecutive quarters from the Sept 2020 quarter through to the Dec 2023 quarter.

The situation won’t improve until 2024 according to the Reserve Bank’s latest monetary policy update released on Friday.

“It’s most pronounced for low income people because what we’re seeing with inflation at the moment is that the prices of what we call non-discretionary items or essential items are rising faster than sort of discretionary luxury items,” Dr Jericho said.

“So the prices of things that you can avoid paying like food, like energy, bills, rent are rising faster than the things you can decide not to buy, like a holiday.

The big drivers of inflation are the war in Ukraine and the supply chain disruptions caused by Covid.

“Higher prices, especially for food and fuel, are likely to impact low-income households in particular (which tend to spend a larger share of their income on these necessary items),” the RBA said.

“While household balance sheets are generally strong and many households should be able to absorb these price increases, others have limited savings buffers and may have to reduce spending elsewhere.

“For some of these more vulnerable households, the impact of price rises will be mitigated to some extent by the indexation of social assistance payments twice per year, though price rises will reduce recipients’ real incomes in the near term.”

But the RBA’s grim predictions also raises fresh questions about Labor’s pledge to address cost of living.

Labor’s election campaign was based around the slogan that “everything is going up except your wages.”

This data suggests that’s not going to improve for months to come.

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