Can median wage rate catch up to inflation?
The cost of living in Australia, has been increasing due to inflation with the Consumer Price Index (CPI) showing a rise of 3.6% in the 12 months to May 2024. Major sectors contributing to this increase include housing, food & non-alcoholic beverages, and transport.
Housing and transportation took the biggest hit during Covid 19 pandemic but over the past five years, these sectors have surged by more than 22%, leading the price escalations trend. The crisis has taken toll on the Aussie household on both material and psychological hardship. On the brighter note, Clothing and footwear remain reasonably priced, picking up only 5% over the same period.
The aggregate CPI has accumulated a surge of 20.4% while the median wage rate (WPI) has only increased by 14.5% over the 5 year period. This alarming gap has necessitated policymakers respond to maintain citizens' living standards. In reality, a A$3.5 billion cost of living package has been deployed for energy rebate and rental assistance in the most recent federal budget.
Is Sydney the most expensive city to live in Australia?
The largest KFC franchise has recently report peak sales amid staggering economy, suggesting that Aussie are preferring fast food over restaurant dinning for cost-cutting. Consumers are reported to feel the pinch of higher interest rate and inflation. A further investigation into other living aspects such as rent, groceries, restaurant, and purchasing power is conducted among 9 biggest cities in Oceania region.
Sydney, NSW, only ranks third in cost of living trailing Canberra and Adelaide. On the other side of the spectrum, Brisbane, QLD, and Melbourne, VIC, are more affordable than other cities on the list. However, Sydney claims the top spot in rent index, and rent-included cost of living index. Indeed, it becomes the most expensive city to live in Australia in aggregate.
Despite the high cost of living, groceries and dinning prices have soften the blow for Sydneysiders, leaving an appeal for tourism. The balance between high living costs and manageable everyday expenses creates a unique economic landscape for the Harbour City, influencing both local life and tourism positively.