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Tag Archives: indebtedness

May 2, 2012 

The government can’t solve all of our problems and we need to accept primary responsibility for solving them ourselves. Ross Gittins explains.

    COMPLAINTS about the rising cost of living appear to have little basis in fact, a new study reveals.

It shows that incomes have more than kept up with prices, and in 2009-10 the average family was $224 a week better off than in 2003-04.

Woolworths Supermarket Mona ValePhoto Michele MossopWednesday 29th April 2009FIRST USE AFReggsGeneric Woolies Woolworths supermarket food shopping retail economy cost of living trolley trolleys wages SPECIAL 105421“There’s been this ‘rising cost of living’ story over the last decade when really Australian households are doing better than ever” … Ben Phillips, author of the latest study by the National Centre for Social and Economic Modelling. Photo: Michele Mossop

”I don’t want to say everyone is doing wonderfully well,” said Ben Phillips, the study’s author. ”But there’s been this ‘rising cost of living’ story over the last decade when, really, Australian households are doing better than ever.”

The study, by the National Centre for Social and Economic Modelling at the University of Canberra and AMP, says it is ”bigger lifestyles” rather than higher costs that are exerting pressures on many households.

”If there are pressures they are coming from keeping up with the Joneses and our higher expectations,” Mr Phillips said. ”We’re spending bigger, and on a wider range of goods and services, such as private schools, and we’re spending more on discretionary or luxury items, like restaurants.”

The study shows income and pension gains and a decade of low inflation have meant all family types are relatively better off, including working families with children, pensioners, high-income earners, and even families in the lowest income quartile.

Working couples with children are $328 a week better off in real terms than in 2003, and single parents are better off – but only by $59 a week. The highest quintile of income earners are $576 a week better off.

The study, Prices These Days! The Cost of Living in Australia, says some necessities, including electricity, mortgages, medical services, fruit, bread and vegetables, have become more expensive but the price rises have been offset by dramatic falls in the cost of computers and audio/visual equipment. Items such as toys and household appliances have barely changed in price.

Petrol has increased by 208 per cent since 1984 but is still cheaper than in every country except the US, Canada and Mexico.

Both high- and low-income earners spend more than in the past on discretionary goods such as restaurants, holidays, prepared foods and alcohol and tobacco. Low-income earners devote more of their income to basics than richer people but still spend about one in three dollars on discretionary items.

”There has been no large increase in the relative expenditure devoted to basic necessities of life as might be commonly perceived,” the report says.

Sydney has the highest cost of living in Australia, because of housing prices, but incomes are also high. But the overall standard of living enjoyed by Sydneysiders after costs and incomes are taken into account puts them behind residents of Canberra, Darwin, Perth, Brisbane and Melbourne.

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