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Workers have never had it so good

FAR from being squeezed, working people are better off than ever, according to the latest figures, with lower costs from interest rates counteracting the higher costs imposed by the carbon tax.

Average wages climbed 3.7 per cent in the past year (3.9 per cent in the private sector, 3.3 per cent in the public sector). But the living costs faced by working households climbed only 1 per cent in the year to September, an increase that took account of all of the price rises that flowed from the carbon tax.

The stunningly low cost-of-living increase - half the official inflation rate - was because the Australian Bureau of Statistics' cost-of-living measure incorporated household mortgage interest costs which slid 6.7 per cent over the year to September and 2.5 per cent in the past three months. It also gave a high weight to motoring costs, which slid 0.8 per cent in the past three months as a result of lower petrol prices.

The 1 per cent annual rise in living costs was one of the lowest on record and had only been bettered on other occasions when interest rates had been falling.

Other households for whom mortgage charges and petrol prices were less important were hit harder.

In Parliament, the Climate Change Minister, Greg Combet, ridiculed a series of "notorious" warnings about the carbon tax from the Opposition Leader, Tony Abbott.

The ABS said the living costs faced by pensioners and households relying on Newstart climbed 2 per cent. Self-funded retirees' costs rose 1.5 per cent.

Other figures showed private sector house building approvals were up 1.2 per cent in September. Approvals for renovations surged 11.5 per cent.

The BT Financial Group chief economist, Chris Caton, said the news was "not so much a sign of strength as a sign of hope". Building approvals were volatile and they did not respond predictably to interest rate cuts.

The Reserve Bank has cut interest rates 1.50 percentage points over the past year.

186 comments

  • It's absolutely absurd to claim cost of living only went up 1% in the year to September. Just ask anyone who pays an electricity bill if that's true.

    Commenter
    Shervin
    Date and time
    November 01, 2012, 12:23PM
    • I think people forget how much things used to cost. So a few things look to be more expensive - like electricity but so many things are so much cheaper than they used to be. When I was growing up 30 years ago most families could only afford the basics. Now families, like mine have one of everything. Sure there are some people doing it tough especially those out of work but for those with a job life is pretty good at the moment. The people that I know that have jobs but are still struggling are generally overspeding on credit, paying for private schools etc. Perhaps things just seem cheap when you live within your means.

      Commenter
      The Sloth
      Date and time
      November 01, 2012, 1:16PM
    • The ABS uses "baskets" of goods and commodities consumed by "representative" people/families, and calculate the price rises across those. Any stage of this calculation is fraught. In our case, the rise in utility, fuel and insurance costs more than offset reductions in mortgage and groceries.

      Neither did we get the pay rises the ABS thinks people did, even though we are representatives of major groups: for those figures to be correct some people must have done exceptionally well.

      Commenter
      morrgo
      Date and time
      November 01, 2012, 1:31PM
    • More Swann / Gillard accounting (fudging)

      Commenter
      Head Cheer Leader - LNP
      Date and time
      November 01, 2012, 1:31PM
    • No, you confuse cheaper "one off" costs with much more expensive recurring costs.

      It's fantastic that a decent laptop can be purchased for $500, when a few years ago you would have paid $3,000 - but I don't buy a laptop every quarter.

      I do pay for electricity every quarter, and have seen bills go from $400 to $1200 in the same period that laptop prices have crashed - and that's with gas cooking, instant gas hot water, reverse-cycle ducted air as the only method of heating/ cooling and a well-insulated home with high ceilings.

      I also pay for water (increased ridiculously), gas (up, up, up), Council rates (up, up, up as Council staff slurp up that ratepayer gravy) and insurance - a real killer. You could once insure a new, average car for less than $500 - try it for less than $1,000 today. Home & contents insurance, medical insurance, motor vehicle insurance - all climbing rapidly.

      But at least I can buy books for half the local price on Amazon, eh?

      1%? Pig's arse.

      Commenter
      Scott Hillard
      Location
      Newcastle
      Date and time
      November 01, 2012, 1:37PM
    • How much do you spend on electricity? It's about 2% of my annual expenses... So even though it has gone up a lot (20%) it's not a huge impact, it's also been balanced by a tax cut that returns about half of that 20%.

      It's been balanced out by the fact that I can buy good quality t-shirts for $5 and other clothes for next-to-nothing. Electronics and other consumer goods are cheaper than ever. and I've also had a pay rise.

      Commenter
      Tsudo
      Date and time
      November 01, 2012, 1:41PM
    • Why did my new car cost the same as the one I bought in 1988, yet come with Bluetooth and a bunch of other stuff? Why is my television half the weight but twice the size of my 2006 model, but for the same cost? Why are whingers continually unhappy? Oh never mind, I've got the answer to that one already.

      Commenter
      skifan
      Location
      Sydney
      Date and time
      November 01, 2012, 1:46PM
    • Whilst the cost of electricity has gone up, lots of other things have gone down. Mortgage rates are low, food is low, electrcal ect is low.

      I personally feel I am in a good position. Good income, low rates ALL GOOD HERE!

      Commenter
      Steve
      Location
      Sydney
      Date and time
      November 01, 2012, 1:46PM
    • We have a 4 bedroom, 3 bathroom house, a swimming pool, we live off tank and bore water (i.e. run two pumps) 3 TVs, 4 computers......and our electricity bill last quarter wsa a staggering $360.

      I have no idea what people do to run up bills of $1000+ per quarter.

      Australians have turned into a bunch of spoilt whingers who have no idea how good they really have it.

      Commenter
      Sarah
      Date and time
      November 01, 2012, 1:48PM
    • Yeah because that damn electricity bill is 50% of my households expenditure....so i've had a massive increase =P
      Lets do some maths...whats the median household income in australia? $70k conservatively.
      whats an average electricity bill? $2k for the year...even if we go nuts and say its $3500 (since that goes into 70k easier) its 5% of their income...it rose by 20% at worst....so 1%...WOW exactly the figure quoted by the ABS..who also take into account the reduction in mortage interest to balance out any increases in food.

      Commenter
      Cheshire Cat
      Date and time
      November 01, 2012, 2:08PM

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