The current cost of living crisis in Australia has two components – the incomes that people receive, and the prices they pay for goods and services. This is what Alan Fels has recently referred to as the “two faces” of the crisis .  Action to protect the living standards of Australians must address both faces of the crisis.

As part of a broader research initiative investigating the human costs of the crisis and the impact of austerity on Australian workers, the Australia Institute’s Centre for Future Work surveyed a nationally representative sample of 1014 adults living in Australia about their household income and the costs of living.  The results show that:

• Almost three-quarters (72%) of respondents felt their wages had grown slower than prices over the previous year.
• Over half of respondents (53%) said their household’s financial situation was worse that it was two years ago.
• The cost of living crisis has had differential impacts. Because it has affected lower-income Australians most severely, the cost of living crisis has exacerbated inequality.
• Respondents identified higher grocery prices as the most visible source of the increased cost of living. Six out of 10 (60%) of respondents identified groceries as the purchase where they have most noticed higher prices followed by utilities (21%) and transport (7%).
• There was strong support for measures across a broad range of policy areas to address the costs of living. 64% of respondents said it was very important to lower utility costs to reduce cost of living pressures. 64% said it was very important to increase supermarket competition, 60% to lower medical costs, and 58% to increase the pace of wages growth.

The respondents to this survey supported a suite of policy initiatives designed to both reduce the cost of living, and to increase wages and income supports. In their view, addressing the cost of living crisis requires a multi-dimensional approach, rather than a singular reliance on high interest rates to slow inflation.

The report is published by the Centre for Future Work in conjunction with a one-day symposium it is hosting in Melbourne on 17 October on the crisis in living standards in Australia, and how to address it through greater investments in wages, public services, and affordable housing and energy.