New data from the Australian Bureau of Statistics (ABS) has revealed older Australians are suffering the most from the rising cost of living.
In what has been the highest increase in 16 years, pensioners are experiencing an annual household living cost of 4.9 per cent.
Head of Prices Statistics at the ABS Michelle Marquardt said the main culprit affecting older Australians is the increase in grocery prices, but household costs also played a large role.
“These households were also more affected by increases in housing costs, as they have relatively higher expenditure levels on utilities, maintenance and repair, and property rates,” Marquardt said.
Marquardt said younger Australians avoided being hit the hardest by switching their mortgage to lower interest loans to combat the rise in the Consumer Price Index (CPI).
“While housing prices have been increasing, many households switched their mortgages to lower interest rate fixed loans and, as a result, mortgage interest charges fell over the last year,” she said.
“Interest charges account for almost six per cent of expenditure for Employee households, compared to around one to two per cent for other households.
“Mortgage interest charges for Employee households fell 5.4 per cent over the year. Consequently, Employee households had the lowest annual increase of all the different household types at 3.8 per cent.”
In his current election campaign, Prime Minister Scott Morrison promised to “shield” grey voters from the rising rates by freezing deeming rates, which will protect pension income support payments.
“This is another shield to help protect Australians from the cost-of-living pressures people could feel from an increase in interest rates,” Morrison said.
“In addition to our indexation of social security payments, we will guarantee the rate of income for people who could otherwise see their social security income drop because of the increase in interest rates.
“This guarantee will be a welcome relief to Australians who rely on both the social security system and modest income from investments by ensuring their payment rates are locked in.”
— Liberal Party (@LiberalAus) May 4, 2022
Opposition leader Anthony Albanese matched Morrison’s promise to freeze deeming rates, with Labor MP Linda Burney releasing a statement saying the Coalition wouldn’t follow through.
Australians are doing it tough. They need a government that will relieve the cost of living pressures. pic.twitter.com/WxZkB6VIEk
— Anthony Albanese (@AlboMP) May 4, 2022
“Deeming rates are important because they are part of the income test that determines access to the pension and social security payments, the part pension and the Commonwealth Seniors Health Card,” the release said.
“Between March 2015 to July 2019, interest rates fell four times but the government didn’t adjust the deeming rates once.
“The coalition’s record shows they cannot be trusted to deliver for older Australians and pensioners. Scott Morrison cut the pension for around 370,000 pensioners, scrapped pensioner concessions, and he tried to raise the pension age to 70.
“The reality is that cost of living pressures have reached crisis levels on Scott Morrison’s watch. Now, he is having to do a patch-up job.”