The cost of living, including essential everyday items like food and healthcare, has outpaced inflation over the past seven years, a new research project undertaken by the Australian Bureau of Statistics suggests.
Over a period spanning 2012 through to 2019, the ABS discovered that non-discretionary inflation was 14.8% while general inflation was 14% over the same period.
Non-discretionary spending is classified to include anything that meets a basic need, maintains current living arrangements, or is a legal obligation, and represents nearly 60% of household spending, according to the research project.
The cost of essential items even managed to outpace wage growth in some years, with the most recent being 2017 where wages grew by 1.9% and non-discretionary items rose by 2.4%.
It’s all reflective of an economy where a strain has indeed been placed on the average household budget, with the research project indicating price increases in housing, health, and education over the reporting period as the main contributors.
Meanwhile, the data suggests that discretionary spending – covering all things from take away meals and alcohol to holidays – increased by less than inflation at 12.9%, and even less when tobacco was taken away (6.4%).
The research project proposes that this is largely due to price drops in clothing, furniture, household appliances, and motor vehicles.