³Ô¹ÏÍøÕ¾

Employee households, whose primary source of income is wages and salaries, saw living costs rise 1.7 per cent in the March 2024 quarter, according to the latest data from the Australian Bureau of Statistics (ABS).

Michelle Marquardt, ABS head of prices statistics, said: “Increases in living costs in the March 2024 quarter ranged from 0.7 per cent to 1.7 per cent, depending on the expenditure patterns of the different household types, compared to a rise of 1.0 per cent in the Consumer Price Index (CPI).

“Employee households recorded the largest increase in living costs of all household types. Quarterly increases in living costs for Employee households have been higher than the CPI since September 2022.”

A significant difference between the Living Cost Indexes (LCIs) and the CPI is that the LCIs include mortgage interest charges rather than the cost of building new dwellings.

Employee households were most impacted by rising mortgage interest charges, which are a larger part of their spending than for other household types.

“Mortgage interest charges rose 7.0 per cent in the March 2024 quarter, up from 5.4 per cent in the December 2023 quarter. The rise reflects the continued rollover of some expired fixed rate to higher variable rate mortgages, as well as flow on effects from an increase in the Reserve Bank of Australia’s cash rate of 25 basis points in November 2023,” Ms Marquardt said.

Living costs for each of the three indexes for households whose main source of income is government payments (age pensioner, other government transfer recipient, and pensioner and beneficiary households) increased more than the CPI in the March quarter. The primary reason for this was due to larger increases in Health costs for these households.

Annual living costs

Employee households recorded the largest annual rise in living costs of all household types with a rise of 6.5 per cent, down from the peak of 9.6 per cent in the June 2023 quarter. Mortgage interest charges rose 35.3 per cent annually, down from the peak of 91.6 per cent in the 12 months to June 2023.

“Increases in interest rates and insurance premiums over the year have contributed to annual living costs rises ranging from 3.3 per cent to 6.5 per cent for different household types. Employee, Other government transfer recipient, and Pensioner and beneficiary households recorded higher rises than the 3.6 per cent annual rise in the CPI,” Ms Marquardt said.

Higher food prices over the past 12 months also contributed to annual living cost increases for all household types.

“Annual inflation for Food and non-alcoholic beverages has declined this quarter. However, it remains high and continues to contribute to higher annual living costs for households,” Ms Marquardt said.