When the conversation on Australia’s rate of inflation is mentioned, the Consumer Price Index is used, there is actually a highly varied tale that is not told. Different people will tell you different stories depending on their incomes and personal circumstances, since the cost-of-living crisis has really affected different people based on who they are.
Here, we take a closer look at what has been going on with inflation and spending using information provided by the Australian Bureau of Statistics on different household types in Australia.
Not all households face the same inflation rate. The ABS publishes separate Living Cost Indexes for five different household types. This chart shows how annual living cost changes have tracked over time for each group.
Hover over the lines to see values. Click the legend to show or hide a household type.
Conclusion: What this indicates is that during the period of rising inflation between 2022 and 2023, government payment recipients and retirees experienced greater increases in their cost of living compared to employee families. Employee families enjoyed reductions in mortgage interest rates, which is something that retirees do not experience.
Each price increase will affect the household expenditure sector that the consumer allocates funds to more than others. The following heat map displays the average yearly increase in costs based on four sectors of expenditure and five household categories amid the years of high inflation (2022–2025).
Hover over any cell for the exact figure.
Conclusion: Food prices were consistently the biggest headache for everyone, costing about 5% per year on average. High costs related to mortgages affected employees more, but there is nothing comparable for pensioners and those who rely on transfers to ease the pressure.
The low-income quintile spends a significantly larger proportion of its budget on the necessities than any other quintile. The information used to produce the above chart was obtained from the Australian Bureau of Statistics Household Expenditure Survey data. Inflation across food, housing and energy hits the low quintile the hardest.
Click on a category in the legend to hide or show it.
Conclusion: The first quintile allocates about 43% of its income towards spending on accommodation, food, and fuel, which are three of the items whose prices increased sharply during 2021 through 2025. The fifth quintile is in a better position because of higher expenditure on discretionary items such as recreation.
Behind those numbers are real households facing real challenges. The following chart indicates the percentage of households within each income quintile that experienced financial struggle during the 12 months preceding the 2015-16 study period. The disparity between the lowest and the highest income quintile is consistent for all indicators.
Hover over any dot to see the exact figure.
Conclusion: The difference between the income brackets is huge. In the lowest income bracket, almost 4 out of 10 individuals did not even have enough money for a holiday. One out of four people in this lowest income bracket had no way to pay off $2,000 worth of expenses.
The cost of housing represents one of the greatest stress points — but not all families have received the respite in the form of more stable home loan rates. The following graph highlights this through housing costs since 2019.
Hover over lines for exact values. Use the legend to isolate household types.
Conclusion: Costs for employee families reached a peak and then declined owing to stability in mortgage interest rates starting from 2023. The retirees and government benefits receivers, most of whom are tenants, experienced rising costs of housing until 2026 with no such easing.
Rather than one cost of living crisis, the inflation problem Australia has experienced has occurred in phases, each affecting households quite differently from each other. On the surface, the Consumer Price Index may be an accurate gauge, but there is a dualistic nature hidden behind the headline number. Those low-income individuals, retirees, or people who rely on social security benefits find themselves in a tougher cost of living environment than salaried workers due to their reliance on the items whose prices soared higher, their lesser capacity to cushion the blows, and the absence of coping tools such as the ability to borrow money at lower interest rates or negotiate wages.
The right way to tackle the cost of living crisis, then, is to get past that single number.
Australian Bureau of Statistics. (2017). Household expenditure survey, Australia: Summary of results, 2015–16 (Cat. No. 6530.0). https://www.abs.gov.au/statistics/economy/finance/household-expenditure-survey-australia-summary-results/latest-release
Australian Bureau of Statistics. (2026). Selected living cost indexes, Australia, March quarter 2026 (Cat. No. 6467.0). https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/selected-living-cost-indexes-australia/latest-release
Australian Bureau of Statistics. (2026). Consumer price index, Australia, April 2026 (Cat. No. 6401.0). https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release
All visualisations produced in R using plotly and tidyverse. Data sourced from the Australian Bureau of Statistics.