Affluents cruise, Cash-Strapped bear brunt of increases

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Several unusual factors affected prices in the March quarter. COVID-19 did have some impact, but shutdowns didn’t really begin until mid-March, which means only two weeks of the three-month quarter were affected. COVID-19 will have a very large impact on the next quarter (June 2020). However, bushfires raged through January and the drought continued to have an effect.

The biggest change in costs for the quarter were in food and non-alcoholic beverages, driven by a 6 per cent increase in fruit and vegetables and a 2 per cent increase in meat and seafood. The bushfires and drought had some effect, as did COVID-19 because, during the panic buying of essential products towards the end of the quarter, stores stopped discounting items.

The other big increase was in health, with 5.1 per cent increases in pharmaceutical products and 1.1 per cent increases in the cost of medical and hospital services.

Transport costs fell 1.9 per cent, driven by a 6 per cent reduction in automotive fuel. That’s a big drop, but fuel is still 5.9 per cent higher than it was a year ago.

Recreation fell 1.7 per cent, driven by falls of 3.1 per cent in domestic holidays and 3 per cent in international holidays.

The impact on our tribes was quite different this quarter. Most affected were Cash-Strapped Couples and Singles, who saw an increase in their cost of living of 0.4 per cent, while Affluent Couples saw no change. This is because Cash-Strapped tribes spend a larger proportion of their income on food (which increased), while Affluent Couples spend a larger proportion on recreation and transport (both fell). Constrained tribes’ cost of living increased 0.3 per cent.

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Written by Matt Grudnoff

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