You would need to be living under a rock in a cave deep in the outback to have missed the one issue that unites us all – the cost of living in Australia. Australia used to be a very affordable country. However, Australia now ranks among the top ten most expensive countries to reside in. In the Economist Intelligence Unit’s latest bi-annual Worldwide Cost of Living Survey, Australian cities are among the most expensive places to live in the world. Sydney (3rd) & Melbourne (4th) are more expensive than London, Singapore (Paris, New York), Hong Kong and Singapore.
For the sake of brevity we aren’t going to get into the reasons why it is more expensive than ever to live in Australia or the anecdotal evidences of it that we can all point to. These are obvious, and have been covered many times before. Instead, look at actual numbers from the real-world.
Luckily, the Australian Bureau of Statistics has been recording the prices of good and services for a number of years. It is also available as a free download.
Of course we could simply regurgitate their data, but we don’t want to bore you to death. Andy Boyd, co-founder of creditcardcompare.com.au, whose team has taken years of ABS data and overlaid it on a Google map to create the aptly named ‘Australian Cost of Living Heatmap’.
“When you see the ABS pricing data in this visual format, it allows for a very interesting analysis of the price index. It is obvious that living costs have increased. It just lights up like a Christmas tree,” said Boyd.
And he’s right. The most reliable price index was available in 1975. The price index combined of goods (housing and alcohol, tobacco, clothes etc.) was available in 1975. It was not available at the time. services, including insurance and education. It shows a faintly green hue in both urban areas and suburbs. It was 27.4. Fast forward 35 years to 2010 and the price index for goods and services has risen to 171 – more than 6 times higher. The graph itself though doesn’t show a hockey stick rise. Rather, it’s quite steady, with the rise flattening out in the 90’s.
That doesn’t reveal the real story. “When you start to filter for separate goods and services, the rise is much more obvious. This is especially true when you consider goods such as alcohol and tobacco that have seen tax increases throughout the years. Their taxes have risen rapidly from 24 March 1975 up to 274.3 March 2010. That’s nearly 11.5x higher.”
Alcohol and tobacco aren’t the only things to get more expensive, as we all know. The price of housing rose from 24.1 in 2002 to 158.8 in March 2010. Transport rose by more than 75%, from 24.1 in 2002 to 158.8 in March 2010. Food prices rose 7x between 27.1 and April 1975 to 191.3 by February 2010.
What does the heatmap tell us? “Some verticals have seen relatively modest increases, like clothing and communications, while recreation and culture have actually seen a modest drop in the last few years. The resource boom has driven our economy and increased the cost of living, but graphs show a different story. If it wasn’t for China’s cheap imports, the situation might have been worse. The impact of cheap imported consumables is plain for all to see and without them, the cost of living in Australia would be even higher still.”