If you’re an age pensioner and thought it was tougher to make ends meet this year, you’re not wrong.
The living costs of age pensioner households rose 0.3 per cent in the March quarter, according to the Australian Bureau of Statistics (ABS), even though there was no movement in the consumer price index (CPI).
Meanwhile, if you’re a self-funded retiree, you may have noticed household costs had improved. The ABS says they fell by 0.2 per cent.
In other categories, pensioner and beneficiary households experienced a 0.3 per cent rise in costs, other government recipient households costs rose 0.2 per cent and employee households costs were static.
The main contributors to the rise for age pensioner households were health costs (+5 per cent), driven by the cost of pharmaceutical products and medical and hospital services, and food and non-alcoholic beverages (+1.5 per cent), driven by the cost of vegetables.
The ABS attributes the rise in pharmaceutical products and medical and hospital services to the cyclical reduction in the proportion of consumers who qualify for subsidies under the Pharmaceutical Benefits Scheme (PBS) and Medicare Benefits Scheme (MBS). The safety net threshold amount for both are reset on 1 January each year.
Transport (-2.5 per cent) contributed the most significant partial offset in the quarter, driven by automotive fuel, with falls in world oil prices flowing through to consumers.
The ABS says that in the past 12 months, age pensioner costs rose 1.4 per cent while the CPI rose 1.3 per cent.
The living cost index (LCI) for self-funded retiree households fell 0.2 per cent largely due to the fall is recreation and culture (-1.8 per cent) driven by domestic and international holiday, travel and accommodation. Transport (-1.7 per cent) also contributed to the fall, driven by automotive fuel.
Health (+2.2 per cent) and food and non-alcoholic beverages (+1.4 per cent) were the most significant positive contributors.
In the 12 months, the LCI for self-funded retiree households rose 1.6 per cent.
The weighted indices measure the impact of changes in prices for out-of-pocket expenses incurred by households buying a fixed basket of consumer goods and services.
CBA chief economist Michael Blythe notes that a number of essential costs have started to come back down, the Australian Financial Review reports.
“Inflation in the ‘pain spend’ on those items we have to buy but don’t enjoy (32 per cent of the CPI) has slowed sharply,” Mr Blythe said. “Both major parties are making additional promises to cut living costs in the current election campaign.”
The Reserve Bank of Australia (RBA) next meets on 7 May, with many pundits predicting it will cut the official interest rate.
Do you believe that budgeting is tougher or easier than 12 months ago? Have you noticed any significant price rises in key categories?