Higher fuel and food prices are already costing households an extra $1,000 a year, CCIWA’s latest calculations reveal.
This follows CCIWA’s snap consumer confidence survey earlier this month which found 82% of households planned to cut discretionary spending.
Since the Middle East crisis began about seven weeks ago, fuel prices in Australia have risen by 38%, leading to increased transport and freight costs.
Power costs have also started to hurt households, with a 22% increase in Synergy customers unable to pay their bills and forced to pay through payment plans, as reported in The Sunday Times on April 19.
Food supply a growing concern
CCIWA Chief Economist Daniel Kiely said the next impact would likely be higher food prices.
“We estimate that the flow-on from that [fuel costs] will mean the average family of four will be paying $20 more per week for the food in their shopping trolley by June,” he said
“Over the course of a year, that’s more than $1,000 extra for the essentials.
“This will be a huge burden on families, especially for those already feeling the impacts of higher cost-of-living and the impact of higher interest rates.
“It will get increasingly difficult to find savings elsewhere in the household budget.”
According to CCIWA, the average Australian family of four (two adults, two children) spends $229.42 a week on food items. But now that same grocery shop would cost $249.47 by June.
This equates to a $20.05 increase per week, or $1,042.60 per year, close to a 9% increase since disruptions began.
Kiely said any further increases in fuel costs would flow through the household budget. “This will in turn flow on to other parts of the economy, as households will be cutting back on discretionary spending to pay for the essentials,” he said.
“It also remains to be seen what impact a potential shortage of fertiliser will have on food production and how that will flow through to pricing over the year ahead.”
CCIWA is monitoring the fuel situation and business impacts closely. See our Middle East Crisis Hub for updates, practical resources, advice and support available from CCIWA.
Become a CCIWA Member to ensure you access our business support services and receive the latest updates and information to help your business through this crisis. Contact us via [email protected] or on 1300 422 492.
