The real cost of living is growing at almost double the inflation rate for millions of working families as their soaring mortgages and high insurance premiums wipe out the benefits of higher wages, tax cuts and government handouts. Source: The Age.
As Treasurer Jim Chalmers rejected suggestions that Government spending was adding to inflation and forcing the Reserve Bank to consider an interest rate hike, figures from the Australian Bureau of Statistics showed the cost-of-living increase for working households eased to 6.2 per cent for the year to June.
By contrast, the headline inflation rate was 3.8 per cent in June.
Mortgage interest charges – which are not included in the official Consumer Price Index inflation gauge – were a key component in the cost-of-living measure for working families, soaring 26.5 per cent over the year as mortgage debt levels increased, and more fixed-rate loans rolled onto higher variable rates.
Insurance costs for working households have climbed by 15.4 per cent over the past year, and have been above the official measure of inflation for three consecutive years.
It comes as Reserve Bank governor Michele Bullock on Tuesday killed off hopes of a pre-Christmas interest rate cut. On Wednesday, RBA assistant economic governor Sarah Hunter appearing before the Senate select committee on cost of living, said different groups were having varied experiences.
“We’re aware that for some people right now, and for some businesses as well, it’s really tough,” she said. “We know some people have had to squeeze themselves very, very hard to get by.”
Age pensioners and self-funded retirees saw the smallest increases in their cost of living at 3.7 per cent and 3.8 per cent, respectively.
The quarterly increase of 1.2 per cent for self-funded retirees was due to higher international holiday travel and accommodation prices amid an increase in demand for holiday travel to Europe, the bureau said.
FULL STORY
When it comes to cost-of-living pressures, there is one group being hit hardest (By Millie Muroi and Shane Wright, The Age)
