Cost of living
Prices fall, prices rise, inflation and wages fluctuate all over the place – but what does it actually mean? By adjusting 100 years of prices for inflation to the present day, and projecting prices in to the future, we can see how the cost of living in Australia has really changed..Get started
Average wages in Australia have gone up by considerably more than inflation over the past 100 years, and are set to do the same again in the years to come. It may sound like good news for the wallet, but how far does that money stretch?
% of income
Spent on rent
Although rents have risen at a rate of more than 20 times inflation over the past 100 years, they have corresponded with even higher rises in wages, meaning the renter of today, and of the future, is far better off than those in the first half of the 20th century. However, rents have gone up a bit in relation to wages since the 90's, when they were at their lowest.
House prices have gone up at a much faster rate than both inflation and wages, meaning it would take much longer to save up for a deposit today – and even longer still in the future – than it would have done 100 years ago.
It could take more than
5 yearsto save a deposit
The price of petrol is currently an important issue for Australia. It's fairly safe to say that someone on the average wage would have been unable to afford their own car in 1910, and potentially in 1950 also, but a look at the average price per litre in the 1980's onwards – when it was first recorded as part of the Australian Bureau of Statistics' averages – shows that even if it looks like it's gone up by quite a lot in recent memory, it's actually come down in real terms.
Australians spend about 10% of their wages on food. In 2010, that stretched to a comfortable $90 a week, but in 1910, it would have amounted to about $0.32. The percentage of the weekly wage spent on covering the basics has varied a lot over the years, just take a look at some of these examples:Shopping values
Two litres of milk
The price of milk has been all over the place: two litres in 1910 would have cost the equivalent of $26 today, but now most places charge just over a dollar a litre. Although prices are set to rise again in the future, inflation means that it should take a smaller chunk out of the budget.
1lb of Tea
1lb is actually quite a lot, but bulk-buying products such as tea was a lot more common earlier in the 20th Century. Apart from a period of low prices in the 50's and relatively low prices in the 90s, the price of tea has risen quite a lot in real terms more recently.
Making a cup of tea
But what does that actually mean per cup? Let's take a look.
The recommended amount of tea per cup is 2.5g. There is 453 grams in 1lb, making 181 cups of tea.
Using about 20ml a cup will make you around 90 cups of tea with two litres of milk.
So dividing the price of tea by 181 and the price of milk by 90 shows you the rough price of a cup of tea.
The price of bread has fluctuated a lot as well and, unlike milk, is currently at its most expensive. Although the price is set to rise, it's likely it will eat in to the food budget a bit less by 2030.
Butter has behaved a bit differently – the price has come down much more regularly in
relation to wages as it has become less and less of a luxury item.
The average price of meat is a bit harder to pin down as there are so many variables in type, quality and quantity. But from looking at various averages over the years for typical spends on a kilogram, you can see how the relative price has lowered as meat has become less of a luxury.
• An average of 20 slices per loaf – ten sandwiches.
• The butter will make sandwiches for a family of four for a week – 28 sandwiches.
• The meat stretches to one round of four sandwiches.
So dividing the average prices of each by those numbers gives you the typical cost of making a sandwich:
Once again, the falling price of once-luxury items means costs are coming down for some of today's basic necessities – it's almost as little as a third of the cost to make a sandwich in 2010 than it was in 1910.
Current as at 2014 levels indicated by Reserve Bank of Australia - www.rba.gov.au