Aggregate inflation peaked at 8% last year, has averaged over 5% for the past 2½ years, and the RBA doesn’t expect inflation to return to its 2–3% target until late 2025. We have a significant inflation problem.

 

High inflation has seen significant declines in real wages and real incomes. But not all prices have increased by the same amount, for example over 2½ years the cost of holiday travel and accommodation increased by 172% but the cost of public transport fares fell by 20%. Given varied price increases and differing spending patterns of households, this raises the question: have some households escaped high inflation? The short answer is no. All household types have experienced very similar and significant inflation over the past three years.

 

The ABS publish data on living costs for five different household types covering retirees, other welfare recipients and working families (see Figure 1 and Table 1).

 

Figure 1

Table 1