Finance Finance News ABS figures confirm the basics of life are getting more expensive

ABS figures confirm the basics of life are getting more expensive

Household costs rise.
Basic costs are taking up more of household budgets. Photo: Getty
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Spending on the basics of life is consuming more of Australians’ weekly incomes with housing costs driving that change, according to new figures from the Australian Bureau of Statistics.

The ABS Household Expenditure Survey, done every six years, shows that Australian households spent an average of $1425 a week in 2015-16 — $190 more than six years earlier.

Of that, housing costs accounted for 19.6 per cent. Six years ago housing accounted for 18 per cent and when the survey began back in 1984 it was only 13 per cent.

The ABS said nearly 30 per cent of Australian households were over-burdened with debt, with mortgages the driving cause.

Debt has grown faster than the incomes and assets of households over the survey period, helping to drive the proportion of households who are over-indebted, up from 21 per cent in 2003-04 to 29 per cent in 2015-16.

The average family spent $279.12 a week on housing in the latest survey compared to $223.14 back in 2008-9. That is a rise of 25.1 per cent while incomes rose 24 per cent and overall expenditures rose 15.3 per cent.

Utilities were another driver of spending, rising 25.8 per cent over the survey period to an average of $40.92 a week. That’s a rise of 11 per cent when inflation is taken out.

Over that time median incomes rose 21.5 per cent to $1607 a week.

Other big spending increases were in education (up 44 per cent), household services (up 30 per cent), health care (up 26 per cent) and housing (up 25 per cent).

On the other hand, spending on alcohol, tobacco, clothing and footwear and household furnishings has not changed significantly from six years ago.

The survey showed the relative number of people doing it really tough had declined. Around 1.3 million Australian households (15 per cent) reported four or more markers of financial stress, down from 16 per cent in 2009-10.

In addition, the proportion of Australian households who did not report experiencing any markers of financial stress has steadily increased, from 54 per cent in 2009-10, to 59 per cent in 2015-16.

Low income growth has helped drive debt growth with average household debt doubling over the survey period. The top 20 per cent of households control more than 60 per cent of all wealth, while the lowest 20 per cent control less than 1 per cent.

Overall, however, inequality has lessened slightly over the past decade. But one in six Australians still couldn’t afford a night out once a fortnight and one in 10 could only afford second-hand clothes.

Average home loans for over-indebted households were over four times the size of home loans held by households with more moderate debt levels. The over-indebted carried an average of $286,400 compared to $59,500 for others.

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