Spike in fuel costs drives cost-of-living increase T he Consumer Price Index (CPI) rose 0.6 per cent in the March quarter, with higher fuel prices, compared to the low prices in 2020, accounting for much of the rise.
A rise in prices for accessories (+7.3 per cent) reflected high consumer confidence and demand for discretionary items such as jewellery, allowing jewellers to pass through elevated input costs.
The most significant rises were automotive fuel (+8.7 per cent), medical and hospital services (+1.5 per cent) and pharmaceutical products (+5.3 per cent) due to the resetting of the Medicare and Pharmaceutical Benefits Scheme (PBS) safety nets.
The CPI rose in all eight capital cities, ranging from 0.3 per cent in Melbourne to 1.4 per cent in Perth and 2.6 per cent in Darwin.
This had the biggest impact on constrained couples (+0.8 per cent), who spend a bigger proportion of their income on transport and medical care, mainly through private health insurance. Constrained singles and well-off couples and singles (+0.6 per cent) were also affected. Cash-strapped couples (+0.5 per cent) and singles (+0.4 per cent) were least affected as they tend to travel less and cannot afford private medical care.
Weekly expenditure for retirees aged 54+ Expenditure items Housing As a percentage of expenditure Domestic fuel & power As a percentage of expenditure Food & non-alcoholic beverages As a percentage of expenditure Alcoholic beverages & tobacco products As a percentage of expenditure Clothing and footwear As a percentage of expenditure Household furnishings & equipment As a percentage of expenditure Household services & operation As a percentage of expenditure Medical & health care As a percentage of expenditure Transport As a percentage of expenditure Communication As a percentage of expenditure Recreation As a percentage of expenditure Education As a percentage of expenditure Personal care As a percentage of expenditure Miscellaneous goods & services As a percentage of expenditure Total weekly expenditure Total monthly expenditure Total annual expenditure
Well-off couples
BIS Oxford Economics chief economist Dr Sarah Hunter said she expected inflation to accelerate sharply in the June quarter – above 3 per cent – for reasons including childcare costs, a further rise in average fuel prices, lifts in the cost of some insurance products and upward pressure on new dwelling costs as a result of commodity and labour shortages in the sector. “Notwithstanding these one-off factors, core inflation is likely to remain weak for some time,” she said.
Constrained couples
Couple Couple homeowners homeowners with private on Age income Pension $183.60 $108.51 12% 13% $42.02 $31.56 3% 4% $249.51 $175.74 17% 20% (-1%) $57.20 $31.08 4% 4% $30.81 $17.49 2% 2% $75.79 $32.88 5% 4% $43.55 $30.81 3% 4% $153.82 $109.64 10% 13% $195.43 $126.86 13% 15% (+1%) $34.34 $24.34 2% 3% $301.25 $102.30 20% 12% $0.62 $0.22 0% 0% $29.75 $18.06 2% 2% $90.78 $48.96 6% 6% $1,488.47 $858.44 +$9.48* +$6.72* $6,450.02 $3,719.90 +$41.07* +$29.10* $77,400.21 $44,638.79 +$492.83* +$349.13*
*Percentage and dollar changes compared with December quarter figures
Cashstrapped couples Couple who rent on Age Pension $205.51 28% (-1%) $33.31 5% $158.90 22% $50.51 7% $9.25 1% $20.01 3% $16.64 2% $37.96 5% $60.32 8% $26.34 4% $66.52 9% $0 0% $12.55 2% $24.48 3% $722.30 +$3.35* $3,129.96 +$14.51* $37,559.56 +$174.10*
Well-off singles
Constrained singles
Cashstrapped singles
Single Single Single who homeowner homeowner rents on Age with private on Age Pension income Pension $123.36 $91.05 $161.91 15% 19% 36% $30.39 $27.20 $23.09 4% 6% 5% $125.35 $88.11 $78.96 15% 19% 17% $30.70 $18.23 $25.58 4% 4% 6% $20.50 $8.89 $7.33 2% 2% 2% $41.47 $19.26 $15.36 5% 4% 3% $39.29 $22.20 $11.80 5% 5% 3% $88.32 $39.11 $23.14 10% 8% 5% $103.52 $52.80 $35.61 12% 11% 8% $33.24 $17.16 $13.39 4% 4% 3% $140.31 $52.78 $31.85 17% 11% 7% $0.13 $0.12 $0.01 0% 0% 0% $18.53 $9.78 $8.67 2% 2% 2% $55.10 $26.82 $16.71 6% (-1%) 6% 4% $850.22 $473.50 $453.40 +$5.30* +$2.73* +$1.82* $3,684.29 $2,051.81 $1,964.72 +$22.98* +$11.81* +$7.88* $44,211.45 $24,621.76 $23,576.70 +$275.67* +$141.75* +$94.68*
YourLifeChoices Retirement Affordability Index™ May 2021
7
