Living Costs Surge Across All Australian Households

All household types saw rises in quarterly living costs in the March 2025 quarter ranging from 0.6 per cent to 1.6 per cent, according to the latest data from the Australian Bureau of Statistics (ABS).

Health, Housing, and Food and non-alcoholic beverages were the main contributors to higher living costs across all household types.

Neel Tikaram, ABS acting head of prices statistics, said: 'Rises in pharmaceutical products, medical and hospital services, electricity and fruit and vegetables have contributed to higher living costs for all household types this quarter.'

Households with government payments as their main source of income saw the largest rise in living costs this quarter.

Age pensioner, Other government transfer recipient, and Pensioner and beneficiary households had larger rises in Health costs compared to Employee and Self-funded retiree households.

The rise in Health costs came after the cyclical reduction in the proportion of households qualifying for subsidies under the Medicare Safety Net and Pharmaceutical Benefits Scheme (PBS). The safety net thresholds for both the PBS and Medicare are reset on 1 January each year.

'Out-of-pocket electricity costs rose as most households in Brisbane had used up the $1,000 Queensland State Government electricity rebate.

'Some households in the remaining states and territories also saw higher electricity bills this quarter due to the timing of the 2024-25 Commonwealth Energy Bill Relief Fund rebate payments,' Mr Tikaram said.

Fruit and vegetables like avocadoes, mangoes, asparagus, tomatoes, and lettuce saw seasonal price rises following reduced supply.

Living costs for Employee households rose 1.1 per cent this quarter.

Mortgage interest charges and Education make up a larger part of spending for Employee households compared to other household types. Mortgage interest charges rose 1.5 per cent in the March 2025 quarter, down from a rise of 1.7 per cent in the December 2024 quarter. Education, which covers primary, secondary and tertiary education, rose 5.3 per cent reflecting fee increases at the start of the year.

'The rise in mortgage interest charges was driven by higher mortgage debt levels and the continued rollover of expired fixed rate mortgages to higher variable rate mortgages.

'The effect of the Reserve Bank of Australia's cash rate cut in February 2025 will be seen in the June 2025 quarter due to the timing of the change in the cash rate,' Mr Tikaram said.

Self-funded retiree households had the smallest rise in living costs of all the household types this quarter, up 0.6 per cent. Self-funded retirees were more impacted by falls in Holiday travel and accommodation prices than other household types, as it makes up a larger proportion of their spending.

Annual living costs rise

'Higher mortgage interest charges, insurance premiums, and food prices over the year contributed to rises in annual living costs across all household types,' Mr Tikaram said.

Of the household types, Other government transfer recipient households had the largest annual rise in living costs, up 3.5 per cent. Rents and Tobacco, which rose over the year, make up a larger proportion of spending for this household type.

Employee households had the next largest annual rise in living costs, up 3.4 per cent.

'Annual growth of 3.4 per cent in Employee living costs has continued to slow this quarter and is down from the peak of 9.6 per cent in the June 2023 quarter,' Mr Tikaram said.

The most significant contributor to rises in Employee households' living costs was Mortgage interest charges. Mortgage interest charges have continued to moderate, up 8.8 per cent in the 12 months to the March 2025 quarter, but down from an annual rise of 14.7 per cent to the December 2024 quarter.