It has been nearly five years since inflation began rising sharply in Australia. A rebounding post-Covid economy met global supply shortages, sparking a cost-of-living crisis.
Key Price Increases
Electricity bills have risen 35% since 2022. The trend has remained strong despite federal and state subsidies, which have come and gone.
Gas prices are up 49%. Insurance premiums have surged 46% over nearly five years.
Rental costs are 27% higher. Homebuilding costs are 36% higher. These increases add pressure to household budgets, especially for those on fixed incomes.
Supermarket staples like oil and eggs have increased by more than 40%. Bread, milk, and fruit prices are up over 30% in five years.
Chicken and vegetables have risen less than inflation. These essentials remain relatively stable compared to broader food price trends.
Stable or Falling Prices
Non-essential items have seen the smallest price rises. Glassware, tableware, and household utensils are now cheaper than at the end of 2021.
Electrical appliances like toasters have not increased in price since 2021. Women’s clothing is 7% more expensive. Men’s clothing is only 4% higher.
Public transport fees have dropped 5%. This decline likely results from state and territory government decisions.
Childcare costs have risen only 7% since 2021. This is a modest increase compared to other essentials.
What Drives These Trends?
The cost-of-living crisis began in 2022. A post-Covid economy faced global supply shortages.
The invasion of Ukraine triggered the first major energy shock. This raised global energy prices and impacted Australia.
The U.S. and Israel’s actions against Iran led to a surge in fuel prices.
Oil prices have risen over 20% in the past year. These increases affect food and transport costs. Oil is essential in food production and fueling.
Global food prices hit a three-year high. Heatwaves and geopolitical conflicts have disrupted supply chains and driven up retail prices.
Why This Matters
Many Australians face rising energy and food costs. These increases affect daily budgets.
Not all essentials have risen equally. Lower-income families and those with fixed budgets feel the impact most.
While non-essentials have stayed stable or declined, the overall cost of living has increased. Understanding which items have risen most helps people plan spending and savings.
Limitations and Open Questions
The data covers price changes since 2021. It does not include income growth or employment trends.
It does not show how different income groups are affected. The full impact on households remains unclear.
Price indices do not capture changes in quality or availability. A product may cost more but offer less value.
Government subsidies have eased some costs, like electricity and gas. But these have been inconsistent and have not reversed long-term price trends.
More research is needed on regional differences, household size, and income levels. Without this, it’s hard to know how inflation affects different groups.
To learn more about inflation and affordability, visit Ask Economist Isabella Weber About Inflation and Affordability.
For details on how oil prices affect food, see How Oil Prices Influence Global Food Costs.
Explore the full inflation data at the Guardian’s inflation explorer.
Sources & further reading
Featured image: original publisher image. Via original publisher. Image source
