Drought accelerates living costs increase

The years-long drought has pushed spending higher by 0.8% during the December 2019 quarter for retiree couples aged around 65, according to data.

The Association of Superannuation Funds of Australia (ASFA) retirement data found those couples needed to spend $62,269 per year and singles $44,146 – a 0.8% increase on the previous quarter.

Over the year to the December 2019 quarter, costs increased by 2.1% for couples compared to the 1.8% increase in the All Groups CPI. This equated at the comfortable level to couples needing to spend $1,292 more a year, and $829 more for singles.

ASFA chief executive, Dr Martin Fahy, said: “Cost increases for retirees have exceeded those for the general population and we’ve also seen an acceleration in the rate of increase in retirement expenses.

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“The drought has impacted on prices paid by retirees for food and there also have been other significant price increases.

“While the recent rains are very welcome, meat prices are likely to increase even further as farmers hold back their breeding stock from the market.”

Over the past 12 months the overall cost of food increased by 2.6%, largely as a result of the drought. Some of the price hikes were:

• Price of beef up by 8.2% and pork up by 7.9%;
• Price of vegetables up by 3.7%;
• Vegetarians also faced a 2.8% increase in price of cereal products;
• Price of milk up by 6.4% and cheese by 5.7%;
• Bread prices up by 3.1% and cake prices up by 4.5%;
• Poultry prices by 3.2%;
• Price of eggs up by 5.2%; and
• Take away food prices up 2.4% affected by rising ingredients costs.

Home ownership costs had also risen with maintenance costs up 2.7%, water and sewerage charges up 2.9%, and property rates up 2.5%.