How is the cost of living impacting ordinary folk?
Badly it seems, according to a recent survey by Savvy – 62% of Australians say grocery prices are their biggest concern.
Here’s how people are living – Megan Polley said the mortgage on their home has gone up nearly $400 a fortnight with all the interest rate rises.
“My food bill costs have doubled, for the basics, going from $250/fortnight for five people to over $500. The cost of fuel is nearly killing all of us.”
Connie Gerstenberg said her family has changed what they eat by what they can afford and they make more casseroles.
“While the cost of living has soared, our household income halved with my husband passing away.
“Then a week later, my youngest child finished school so I also lost family benefits.
“Now there’s three of us with small income, and we all just help our survival. Fuel for travel and a lot of mowing is the biggest costs here at Wyan. There is no public transport either and that petrifies me.”
More than 68% of people surveyed said they are cutting back on non-essential expenses to make ends meet.
The national survey of 1000 adults revealed that petrol or fuel was the second biggest concern (47%) with utility bills coming in a close third (46%).
People aged 18-24s said that petrol or fuel costs were their biggest cost-of-living concern (61%).
For the 35–44s, groceries (58%) and mortgage repayments (57%) were almost of equal importance.
Over two-thirds (68%) of Australians are cutting back on non-essential expenses to deal with rising costs of living.
58% said they were seeking cheaper alternatives to higher-priced items, while 20% said they were seeking further sources of income.
As many struggle to make ends meet – what has put Australia in this cost-of-living crisis?
Well, it’s because of the high levels of inflation in the greater economy, the Savvy report says.
The Reserve Bank of Australia’s inflation target is 2-3%. The RBA has raised interest 10 times between May 2022 to March 2023.
The report explained it like this:
Inflation is an increase in the money supply which increases prices at a faster pace than interest on deposits or growth in wages. This decreases the purchasing power of your dollar over time, meaning you need more dollars to buy the same items or services, such as internet access or utilities.
One major way to combat inflation is to decrease the availability of money though increasing interest rates. The Reserve Bank increased rates from 0.1% to 4.35% over 2022 to 2023. These rises flow on to mortgages, personal loans, and credit cards.
As demand eases and people tend to save more, prices tend to fall. The RBA’s inflation target ranges between 2-3%. Right now, inflation is at 5.4%.
Although, for mortgage holders, they will also need to come up with more money to cover their repayments (if they are on variable rate home loans). Coupled with high inflation, this means they must come up with more money to maintain a certain standard of living.
And that’s where many of us are struggling.
The Federal Government recently appointed former trade and competition minister Craig Emerson to review the Food and Grocery Code of Conduct as one of the steps to address inflation and how much people are paying at supermarkets.
The larger supermarkets Coles and Woolworths have been criticised for their large profits amid rising prices of stock on the shelves.
One IndyNR.com reader said: “The cost of cat food has exploded!”
We’re not alone. The global cost of living crisis is reported on in an article with the sub-heading of Australia and New Zealand: using restraint to ease inflation.
Ways to save money
There are several ways you can save money during a cost-of-living crisis which you can use right now.
Save money on utilities by switching high-energy halogen or incandescent light bulbs to efficient LEDs.
You can also plug in appliances usually on standby into smart switches or foot switches, to turn them off completely and save significantly.
Also, compare your current energy plan with others in the market – if you haven’t shopped around in a while, this may save you quite a lot.
When heating or cooling your home, adjusting your temperature settings by one degree saves 10% in energy consumption.
Buy in bulk – especially non-perishables such as toilet paper or long-life foods such as rice and pasta – can save money.
Prepare meals ahead of time and reduce the temptation to buy fast food – sometimes feeding a family of four at the drive-thru costs as much as four to five meals made with fresh ingredients.