RateCity.com.au
  1. Home
  2. Bank Accounts
  3. News
  4. Rising costs affecting vulnerable households

Rising costs affecting vulnerable households

Mark Bristow avatar
Mark Bristow
- 3 min read
Rising costs affecting vulnerable households

Pensioners and other recipients of government benefits have been the most affected by rising prices for goods and services, according to the latest figures from the Australian Bureau of Statistics (ABS).  

The ABS Selected Living Cost Indexes (LCI) show that in December 2017, Australian households for employees, pensioners, self-funded retirees and recipients of other government transfers, all saw their overall cost of living increase, both over the previous quarter and the past 12 months.

While the ABS Consumer Price Index (CPI) looks at the average costs of a variety of goods and services, the LCI looks at how much household incomes would need to grow to allow Australians to continue to buy these goods and services in the same quantities. This includes the costs of mortgage interest and consumer credit charges, as well as housing and insurance costs for different households.

All household types experienced increases in the cost of:

  • Food and non-alcoholic beverages
  • Alcohol and tobacco
  • Housing
  • Transport
  • Recreation and culture
  • Education
  • Insurance and financial services

Offsetting these increases were falls in the following categories:

  • Clothing and footwear
  • Furnishings, household equipment and services
  • Health
  • Communication
Weighted average of eight capital citiesPensioner and beneficiary LCIEmployee LCIAge pensioner LCIOther government transfer recipient LCISelf-funded retiree LCIConsumer Price Index (CPI)
Food and non-alcoholic beverages1.3%1.0%1.4%1.2%1.2%1.0%
Alcohol and tobacco4.8%3.0%3.4%5.6%1.9%3.2%
Clothing and footwear-0.3%-0.2%-0.4%-0.4%-0.5%-0.3%
Housing0.2%0.3%0.2%0.3%0.3%0.3%
Furnishings, household equipment and services-1.0%-0.8%-1.2%-0.8%-1.2%-0.8%
Health-2.0%-0.3%-1.7%-2.5%-0.7%-0.5%
Transport3.5%2.7%3.3%3.5%2.3%2.4%
Communication-1.3%-1.3%-1.2%-1.4%-1.3%-1.3%
Recreation and culture0.8%0.7%1.0%0.4%0.8%0.6%
Education0.1%0.1%0.0%0.1%0.1%0.1%
Insurance and financial services1.1%0.8%1.4%0.8%1.5%0.2%
All groups0.8%0.7%0.6%1.0%0.6%0.6%

Source: ABS

The higher cost of tobacco over the quarter was due to the flow-on effects of the federal excise tax increase effective 1 September 2017, while the increase to transport costs were driven largely by rising fuel prices. The rise in food and non-alcoholic beverage costs was driven by fruit, due to rises in the price of berries, particularly strawberries and grapes.

The reduced cost of health over the quarter was attributed to pharmaceutical products, due to the cyclical increase in the proportion of consumers exceeding the Pharmaceutical Benefits Scheme (PBS) safety net. Ongoing competition and continued discounting activity in the retail industry contributed to lowering the cost of household textiles, softening the furnishings, household equipment and services figure.

Disclaimer

This article is over two years old, last updated on February 7, 2018. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent bank accounts articles.

Compare bank accounts

Product database updated 30 Mar, 2024

This article was reviewed by Property & Personal Finance Writer Nick Bendel before it was published as part of RateCity's Fact Check process.

Share this page

LinkedInTwitterFacebookMail

Get updates on the latest financial news and products

By continuing, you agree to the RateCity Privacy Policy, Terms of Use and Disclaimer.

Related bank accounts articles