Households have an average of $10,300 less per year to spend on non-essentials such as eating out, holidays and entertainment after the worst cost of living crunch in decades as those mortgages were left short by more than twice that amount.
Polis Partners economist and report author Rob Tyson said a financial “sugar hit” experienced by households due to generous income support and near zero interest rates during pandemic disruptions in 2020 had given way to a sustained“This cost of living squeeze has been the steepest and most prolonged period of deteriorating household finances since the start of the time series in the early 2000s,” he said.
“We used to get a coffee every day, but that’s gone, now we might buy a coffee once a week as a treat,” he said. The rate of inflation, which peaked at around 8 per cent in late 2022, has now been elevated for two years and, for much of that time, wages growth lagged price growth.