The latest release of the Living Cost Indexes (LCIs) for June 2023 reveals that all five LCIs experienced price increases between 0.8% and 1.5% during the quarter. Over the past twelve months, living costs for selected household types rose by 6.3% to 9.6%.
The main contributors to the quarterly rises in living costs were Insurance and financial services, Food and non-alcoholic beverages, and Housing. Notably, Employee households saw the strongest quarterly and annual rises due to increases in Mortgage interest charges.
In response to the continued increase in Australians holidaying overseas, the Australian Bureau of Statistics (ABS) will conduct a partial update to the SLCI weights in the September 2023 quarter. This update will see the weight for International holiday travel increase, while other components in the basket will be adjusted to offset the increase. The comprehensive update to the SLCI weights, typically conducted in December, will be implemented in March 2024 instead.
Quarterly Living Costs:
- Insurance and financial services, Food and non-alcoholic beverages, and Housing were the primary contributors to the rise in living costs across all household types in the June 2023 quarter.
- Mortgage interest charges significantly influenced the rise for Employee households.
- Rental prices continued to rise, reflecting strong demand amid low vacancy rates.
Annual Living Costs:
- Over the past twelve months, all LCIs rose between 6.3% and 9.6%.
- Employee households recorded the largest annual rise on record (+9.6%), driven by increased Mortgage interest charges due to banks passing on the Reserve Bank of Australia’s (RBA’s) cash rate rises to home loan interest rates.
- Self-funded retirees recorded the smallest annual rise (+6.3%) due to having the lowest proportion of expenditure for Mortgage interest charges in Insurance and financial services.
Contributors to Quarterly Change:
- Insurance and financial services, Food and non-alcoholic beverages, and Housing were the primary contributors to the rise in living costs for all household types in the June 2023 quarter.
The ABS will continue to monitor living costs and update the SLCI weights accordingly to ensure accurate reflection of contemporary household spending patterns.