Cost of Living Research: Australians Struggling with Groceries, Fuel and Rent

DemosAU Cost of Living Research Shows Struggling Australians Don’t Expect Their Financial Situation to Improve This Year

Seven out of ten Australians report having at least some difficulty in paying for their household groceries, according to new cost of living research from DemosAU.

DemosAU surveyed 2167 Australians between 8 December 2023 and 7 January 2024 and asked them about how the cost of living crisis was impacting their personal situation.

The results showed 56% of Australians reported some level of difficulty in paying their grocery bill, while a further 14% reported great difficulty. Three in 10 respondents said they had no difficulty paying for groceries.

Meanwhile, 63% reported having at least some difficulty paying their rent or mortgage, including 19% who said they had great difficulty making these payments each month.

Worryingly for the year ahead, only one in four Australians (27%) believe their financial situation will improve in the next 12 months, with just over one in three saying they believe it will get worse (35%).

However, older respondents are also less optimistic about the future, with only 14% believing their financial situation will improve in the next 12 months, while 41% believe it will get worse. By contrast, 44% of 18-24 year olds believe their financial position will improve, while 22% believe it will get worse.

Unsurprisingly, those on higher incomes had the least difficulty in meeting expenses and were the most optimistic about the future, with 56% of those earning more than $200,000 a year saying they had no trouble paying for groceries, compared to just 20% of those earning less than $45,000 and 29% of those earning between 45,000 and $75,000.

Almost one in two people (48%) earning more than $200,000 a year expected their financial situation to improve, compared to one in seven people (14%) earning under $45,000, and one in five (21%) of those earning between $45,000 and $75,000.

The cost of living research also shows younger respondents are having more difficulty meeting most expenses than other cohorts. For instance, only 23% of 18-24 year olds say they can meet rental or mortgage payments without difficulty, a figure that rises only slightly to 27% among 25-34 year olds and 26% among 35-44 year olds, before climbing to 37% for 45-54 year olds and 48% for over 55s.

You can fine demographic breakdowns from our cost of living research here.

Cost of Living Pain a Risk for Governments

Analysis from DemosAU Head of Research George Hasanakos

There is no political issue that has the near-universal impact of cost of living. Every day and in every way rising prices affect anybody who has to dip into their wallet.

DemosAU’s Cost of Living Research shows that seven out of ten Queenslanders report having at least some difficulty, or attempt to cut costs, when paying for groceries and petrol.

The belt is tightened even more for holidays and luxuries with over 8 in 10 of Queenslanders either having at least some difficulty or limiting these expenses.

With similar figures nationwide, there is no doubt that Queenslanders are feeling the pinch. The nationwide figures are similar, which clouds the national mood.

These figures should concern both the Miles and Albanese governments – both are heading towards elections with voters under considerable financial strain.

To make matters worse, only around a quarter of Queensland voters expect their financial situation to improve in the next 12 months.

The mood is especially dark in regional and outer metro areas. In inner city areas, nationally, 35% of respondents expect things to improve, compared to 25% of those in outer metro areas and 20% of those living in the regions. This is a serious risk for both incumbent governments.

For State Labor facing the polls in October these figures mean they will have a harder time defending their 14 regional seats, 11 of which are held on single digit margins.

For Federal Labor, cost of living is a very potent issue in the outer metro seats it holds, such Blair in Queensland, Hunter and Macquarie in NSW and McEwen in Victoria – where voter hip pocket pain will be more acute.

It is not the first time inflation has damaged the prospects of incumbent governments, but these effects are not necessarily terminal. The Howard Government lost the then safe seat of Ryan in March 2001 after the introduction of the GST spiked prices. As the price spike eased, in July the Liberals held the marginal seat of Aston, a sign of the Howard Government’s re-election in November in the shadow of September 11.

This week’s RBA monthly CPI Inflation reading of 4.3% (annualised), a near two year low, gives us a sign that cost of living pressures may be easing. After a sustained period of household belt tightening Australians are mixed in their expectation of relief. For pessimists, if inflation does have a sustained fall, it will be a welcome surprise.

For more information on this cost of living research, please see this report in The Courier-Mail. You can also check out our methodology statement.

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