The cost of living continues to soar – but not in all states

Are you concerned about the rising cost of living? Does it feel like the everyday items you purchase just continue to get more expensive?

On average, Australian household spending on goods and services has increased by a whopping 15 per cent between 2009-10 and 2015-16, going from an average of $1,236 per week to $1,425, according to the Australia Bureau of Statistics.

Housing costs ($279 per week), food and non-alcoholic drinks ($237 per week) and transport ($207 per week) are eating up most of the average weekly household spend, according to the ABS.

And if you live in the Northern Territory or ACT, you’re forking out the most amongst all Australians, with an average weekly spend on goods and services of $1,700 and $1,670 respectively. Those in Tasmania and South Australia have the lowest weekly spend on $1,141 and $1,192 respectively.

“Households may draw on their reserves of wealth to support their current and future spending, therefore some of the differences in household spending may relate to the net wealth of households,” the ABS found.

“Households in Tasmania had the lowest average net worth ($549,800). Households in New South Wales typically had the highest net worth ($1,091,200), followed by Victoria ($868,600) and Western Australia ($841,600).”

Spending in some states is more sensitive to the ups and downs of the economic cycle, particularly the resource-rich states of Western Australia and Queensland.

Between 2003-04 and 2009-10, growth in real household spending spiked at 25 per cent in Western Australia and Queensland, but other states experienced much slower spending growth, the ABC reported, quoting new research from Bankwest Curtin Econonics Centre.

Contrast this with the fact that real household spending in New South Wales has increased by 14 per cent in NSW between 2009-10 and 2015-16, and it only rose by four per cent in WA over the same period.

Housing prices are also having a substantial impact on the cost of living.

According to the Economist Intelligence Unit’s Worldwide Cost of Living Index, Sydney ranks as the most expensive city, followed by Melbourne, Brisbane, Adelaide and Perth.

“Sydney’s ranking as the most expensive city is mainly driven by increases in housing and education costs, which have risen by 5.7 per cent and 5 per cent, respectively, between 1995 and 2017, according to the ABC.

“Housing makes up one-quarter of households’ spending — the dominant share. So it’s no wonder that rises in housing prices in Sydney are so keenly felt.”

Are you concerned about the rising cost of living? Does it feel like the everyday items you purchase just continue to get more expensive?