Australian households saw living costs edge higher across the board in the June quarter, with rises ranging from 0.4 per cent to 1.0 per cent, according to new Australian Bureau of Statistics data.
ABS head of prices statistics Michelle Marquardt said: ‘Employee households had the smallest rise in living costs of all household types this quarter. The last time this happened was in the March 2022 quarter, before mortgage interest rates began rising.
‘Households with government payments as their main source of income saw the largest rises in living costs this quarter.’
On the ABS’s Selected Living Cost Indexes (LCIs), employee households were up 0.4 per cent in the quarter, compared with 1.0 per cent for pensioner and beneficiary, age pensioner, and other government transfer recipient households, and 0.6 per cent for self‑funded retirees. The LCIs differ from the Consumer Price Index (CPI) by including mortgage interest charges rather than the cost of building new homes.
The ABS said employee households benefited most from falling mortgage interest charges, given home loan costs make up a larger share of their spending than for other groups. ‘Mortgage interest charges fell 1.4 per cent in the quarter for employee households, as banks cut interest rates for both variable and new fixed rate home loans following the Reserve Bank of Australia’s decision to lower the cash rate target in February 2025,’ Ms Marquardt said.
housing and food were the main drivers of higher living costs across all household types. Out‑of‑pocket electricity bills rose as the second instalments of the Commonwealth Energy Bill Relief Fund and state rebates in Perth were used up in the March quarter, while Queensland households continued to work through the $1,000 state rebate. food and non‑alcoholic beverages rose across all household types, led by fruit and vegetables, with strawberries, blueberries, grapes, tomatoes and cucumbers all up on seasonally tighter supply.
On an annual basis, cost pressures eased compared with March. Employee households’ living costs rose 2.6 per cent through the year to June, down from 3.4 per cent in March. Annual increases were 2.9 per cent for pensioner and beneficiary households, 2.7 per cent for age pensioners, 3.1 per cent for other government transfer recipients and 1.7 per cent for self‑funded retirees. By comparison, CPI inflation was 2.1 per cent over the year.
The most significant driver for employee households over the year remained mortgage interest charges, but growth continued to slow — up 4.5 per cent annually to June, from 8.8 per cent in March. ‘Higher housing and food and non‑alcoholic beverages prices over the year contributed to rises in annual living costs across all household types,’ Ms Marquardt said.
The ABS noted the Pensioner and Beneficiary Living Cost Index (PBLCI) rose 2.9 per cent annually, outpacing the CPI’s 2.1 per cent. ‘Government pensions are indexed on 20 September and 20 March by the greater of the rise in the PBLCI and CPI over a six-month period.
‘Over the six months between the December 2024 quarter and June 2025 quarter, the PBLCI rose 2.7 per cent while the CPI rose 1.6 per cent,’ Ms Marquardt said.
Source: Australian Bureau of Statistics.
