Health costs are driving up living expenses for Australian households
The rising cost of alcohol and tobacco is also identified as a key contributor to the cost of living.
The cost of living for most households in Australia increased by 0.1% for the June 2017 quarter, according to Australian Bureau of Statistics' (ABS) latest Selected Living Cost Index (LCI) released today. This is slightly less than the consumer price index (CPI) which rose by 0.2% over the same period.
Health related costs increased by 2.3% in the June 2017 quarter, which the ABS has pinpointed as a major contributor to the rise in employee household living expenses. This rise in medical and hospital related services is a direct link to the increase in private health insurance premiums on 1 April 2017, which saw policies rise by an average of 4.8%.
At the same time, the private health insurance (PHI) rebate decreased by 0.86% this quarter, meaning Australians get less money back from the government to help fund the ever-increasing cost of their private health insurance.
Alcohol and tobacco were also identified as factors influencing the increased cost of living, and saw a rise of 0.8% in the June 2017 quarter. The ABS says this increase was driven by the increased taxes placed on tobacco in March.
The rise of health expenses and tobacco were offset by the decrease in transport costs, which declined by 0.6% in the quarter. This is interesting considering the previous quarter's LCI saw a 1.6% rise in transport costs due to the increased cost of fuel and rising global oil prices.
This quarters' LCI increase of 0.1% is minimal in comparison to the March 2017 quarter, which saw a LCI rise of 0.5%. Over the last 12 months, the LCI for employee households increased by a total of 1.3%, while the CPI rose 1.9%. This is good news for Australian households and means living costs are not exceeding inflation.
If you're struggling to keep on top of rising living expenses, opening a high interest savings account is a good place to start.
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