Assessment 3 - Storytelling with Open Data : Australia’s Cost of Living Crisis

Australia’s Cost of Living: A Data Story

Understanding CPI and Its Impact

  • The Consumer Price Index (CPI) measures the change in the cost of a range of goods and services over time in order to track inflation
  • CPI affects interest rates, wages, rents, and overall living standards.
  • After decades of stable growth, inflation has risen significantly in the past few years.

Australia’s Inflation Story: A Long-Term View

Decades of Relative Stability… Until Recently

  • Decades of stable inflation were disrupted post-2021.
  • In 2021, CPI began rising sharply due to global supply chain disruptions, stimulus-driven demand, and pandemic-related shortages marking the beginning of the cost of living crisis

This isn’t just a domestic issue

Australia compared to other advanced global economies

  • Australia’s inflation surge mirrors global trends driven by post-COVID recovery and supply shocks.

  • Countries like the US, UK, and New Zealand saw even sharper inflation peaks in 2022.

But what’s driving this price rise?

  • While inflation is often linked to discretionary spending, recent CPI increases have been driven largely by essential goods and services.

How much have core essentials increased in price?

Core Essentials have drastically increased in price

  • Core essentials including food, housing, transport, health, and insurance have experienced substantial price increases over the past five years.
  • Unlike discretionary items, these costs are unavoidable, meaning that even with higher prices, families cannot cut back easily.
  • Transport and housin saw especially sharp rises during 2022 and 2023, contributing significantly to overall CPI growth.
  • While inflation has moderated overall in 2024–2025, core essentials remain significantly more expensive than five years ago.

Wages are not rising accordingly

  • Wage growth has lagged behind inflation in most years since 2021, reducing real purchasing power.
  • The Wage Price Index (WPI) grew only 3.4% in the year to March 2025, while core essentials rose by significantly more.
  • Households are effectively earning less in real terms, despite nominal wage increases.
  • Essential spending like food, housing, transport, and insurance outpaces wage growth, leaving less room for savings or discretionary spending.
  • Stagnant wages, combined with persistent price increases, are a key driver of current cost-of-living pressures.

How do the capital cities compare?

Is it worth moving to another capital city for cost of living relief?

  • Cities like Adelaide and Brisbane have seen the highest cumulative CPI increases since 2020, outpacing national wage growth.
  • No capital city offers clear cost-of-living relief — while inflation varies, essential costs are rising everywhere, making relocation an unreliable solution.

Government Interventions – Easing the Pressure?

  • The Federal Government introduced energy bill relief payments in 2023–24 and 2024–25, providing up to $500–$650 per household to offset electricity cost increases.

  • State governments introduced additional measures, including:

    • Capped or free public transport fares
    • First home buyer grants and assistance schemes (at federal level too)

  • The Child Care Subsidy was expanded, offering increased support for families earning under $530,000, reducing out-of-pocket childcare expenses from July 2023.

  • Rent Assistance was increased in 2023 and 2024 to ease pressure on low-income renters, with ongoing indexation to inflation.

  • While these initiatives provide targeted relief, they are not large enough to offset broader CPI pressures, especially in housing and essentials.

Conclusion: Where To From Here?

Australia’s inflation has eased, but challenges still remain

  • Core essentials remain elevated despite headline CPI slowing.
  • Wage growth is not keeping pace with rising essential costs, especially for lower-income households.
  • Government supports have eased pressure, but many are still struggling to afford basics
  • Looking forward, targeted relief and structural reform are key to long-term affordability.

References: Australian Bureau of Statistics. (2021, July 28). Consumer Price Index, Australia, June 2021 | Australian Bureau of Statistics. Www.abs.gov.au. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release#main-contributors-to-change

Australian Bureau of Statistics. (2025, May 14). Wage Price Index, Australia. Www.abs.gov.au; Australian Bureau of Statistics. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/latest-release

Baglin, J. (2024, September 11). Chapter 1 Design and Integrity | Data Visualisation: From Theory to Practice. Stem.melbourne. https://data-visualisation.stem.melbourne/design-and-integrity