Australian households are paying 23% more for goods and services than they were at the end of 2021, with electricity, insurance and supermarket staples among the steepest increases, an analysis of Australian Bureau of Statistics data shows.
It has been nearly five years since inflation crashed on to Australia's shores, as a rebounding post-Covid economy collided with a world of constrained supply. The affordability crisis was shaped in 2022 by Russia's invasion of Ukraine, which triggered the first of two global energy shocks. The second arrived in February this year, when the United States and Israel went to war with Iran. The analysis attributes the jump in inflation to 4.3% in the year to September in no small part to the ongoing Middle East conflict and the associated surge in fuel costs.
The figures, drawn from the Australian Bureau of Statistics consumer price index, show cumulative price growth of 23% since the end of 2021, with wide variation between categories. Household power bills are up 35% since the start of 2022, gas 49%, and insurance premiums 46% in nearly five years. Rents are 27% higher, homebuilding costs 36% higher, and postal services up 40%. Among staples, oil and eggs have increased by more than 40%, while bread, milk and fruit are up more than 30% in five years. Chicken and vegetables have risen by less than inflation.
The chart shows a zigzagging line for electricity as federal and state government subsidies turn on and off, and the analysis says those subsidies, while welcome at the time, did nothing to change the upwards trend.
Not everything has climbed. Glassware, tableware and household utensils are actually cheaper, and electrical items are on average no more expensive than they were at the end of 2021. Women's clothing is just 7% more expensive and men's only 4%. The biggest price decline has been in public transport fees, down 5%, which the analysis puts down, presumably, to state and territory government decisions. Childcare costs, while rising of late, are only 7% up since the end of 2021.
Analysis
Why This Matters
- Essentials are climbing faster than the overall index: electricity, gas, insurance, rents, homebuilding and basic foods have all outpaced the 23% cumulative rise in prices since the end of 2021.
- The findings put government relief under scrutiny, with energy subsidies producing temporary dips in the electricity line but no change to its upward direction.
- Australia's latest inflation jump is tied to global events, the Middle East conflict and fuel costs, pointing to pressures largely outside domestic policy control.
Background
The cost-of-living crisis began in 2022, when a rebounding post-Covid economy collided with constrained global supply, and deepened as Russia's invasion of Ukraine triggered the first of two global energy shocks. A second energy shock followed in February this year, when the United States and Israel went to war with Iran. Fuel costs have risen by more than 20% in the past year, though over the longer term they have matched overall inflation, which is still a very large increase. Annual inflation stood at 4.3% in the year to September.
What to Watch
- Fuel prices: with the conflict in the Middle East ongoing, the analysis identifies the associated surge in fuel costs as a key driver of the latest jump in inflation.
- Electricity subsidies: the zigzagging price line tracks federal and state rebates switching on and off; future decisions will help determine whether the upward trend resumes.
- Deflationary pockets: public transport fees are down 5% and some household goods are cheaper, offering households some relief even as staples and bills climb.
Checked
12 claims in this story checked against 1 source: 11 supported.
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- SupportedElectricity, insurance and eggs lead Australia’s five-year cost-of-living surge.Australia news | The Guardian: “No surprise that electricity is among the costs that have increased the most. Household power bills are up by 35% since the start of 2022. ... insurance ... premiums have surged by 46% in nearly five years. ... oil and eggs have increased by more than 40%”
- SupportedConsumer prices have risen 23% since the end of 2021.Australia news | The Guardian: “Our interactive chart shows inflation has climbed 23% since the end of 2021.”
- SupportedInflation was 4.3% in the year to September.Australia news | The Guardian: “inflation in Australia jumped to 4.3% in the year to September.”
- SupportedAustralian households are paying 23% more for goods and services than at the end of 2021.Australia news | The Guardian: “Our interactive chart shows inflation has climbed 23% since the end of 2021.”
- SupportedThe analysis draws on Australian Bureau of Statistics consumer price index data.Australia news | The Guardian: “Our inflation explorer tracks all the categories included in the Australian Bureau of Statistics’ consumer price index.”
- Partly supportedRussia’s invasion of Ukraine shaped the affordability crisis in 2022.Australia news | The Guardian: “The global cost-of-living crisis – or affordability crisis, as the Americans call it – has shaped our world from 2022 onwards. It was also the year that Russia invaded Ukraine, triggering the first of two global energy shocks.”
- SupportedRussia’s invasion of Ukraine triggered the first of two global energy shocks.Australia news | The Guardian: “It was also the year that Russia invaded Ukraine, triggering the first of two global energy shocks.”
- SupportedThe second energy shock arrived in February, when the United States and Israel went to war with Iran.Australia news | The Guardian: “The second energy shock, of course, arrived this February, when the United States and Israel decided to go to war with Iran.”
- SupportedThe ongoing Middle East conflict and associated fuel-cost surge contributed significantly to inflation reaching 4.3%.Australia news | The Guardian: “It’s in no small part due to the ongoing Middle East conflict, and the associated surge in fuel costs, that inflation in Australia jumped to 4.3% in the year to September.”
- SupportedHousehold power bills are up 35% since the start of 2022.Australia news | The Guardian: “Household power bills are up by 35% since the start of 2022.”
- SupportedInsurance premiums are up 46% in nearly five years.Australia news | The Guardian: “the chart shows premiums have surged by 46% in nearly five years.”
- SupportedOil and eggs have each increased by more than 40%.Australia news | The Guardian: “supermarket staples like oil and eggs have increased by more than 40%”