Cost of living outpacing income growth

Common household expenses such as utilities, groceries and rent have increased markedly in the past year, according to new modelling released by the WA Council of Social Service, with many low-income earners unable to keep pace.

The finding, which is based on yearly modelling performed by WACOSS based on analysis of aggregated household budgets for families accessing financial counselling, showed housing had become 45.5 per cent of fortnightly spending for low-income households.

For households below the poverty line, that increased to 72 per cent of fortnightly spending.

Regionally, the Kimberley and Pilbara were found to be the hardest hit by the increases, with food and beverage as well as electricity driving up costs for households.

WACOSS chief executive Louise Giolitto said households with two income earners were better equipped to absorb the costs, with those relying on income support payments like the Newstart Allowance harder hit.

“On even the most conservative estimations, it is clearly simply impossible for someone on Newstart to be able to afford the basics in life,” she said.

“Putting more money into the pockets of those on the lowest incomes and wages in our community is fundamental to driving increased activity in the economy.

“All the evidence shows that increases to the incomes of those with the least are immediately spent on essential goods and services, rather than being squirrelled away and hoarded.”

Ms Giolitto suggested the sector was in need of fairer and more adequate funding to better support workers and those in need of assistance.

“When people are doing it tough, they need the support of community services,” she said.

“We know though that services are struggling to keep up with demand.”