Are Australians just crying poor about cost of living?

Updated

If you listen to the nation's political leaders the 'hard-working families of Australia' are 'doing it tough'.

Prime Minister Julia Gillard has repeatedly promised to "support modern families with the stresses and strains of everyday life".

While last week Opposition Leader Tony Abbott pledged to "help the forgotten families of Australia with cost of living pressures".

It's a simple election pitch: almost everyone wants more financial help and opinion polls show cost of living is again a key concern in marginal electorates in the major cities.

But should it be?

"I would regard Australians as never having it so good," says Commsec chief economist Craig James.

"When you look at the overall cost of living it is growing at a much slower pace than our wages."

Some pensioners, students and low-income families are still struggling.

The cost of electricity and petrol has risen rapidly, Sydney and Melbourne are regularly ranked among the most expensive cities in the world and house prices remain relatively high.

"Australia has become a high cost country," says Sissel Rosengren from BIS Shrapnel's food service division.

"To go out and eat at a cafe in Sydney is much more expensive than in London for example. Households used to survive on one income and now they need two."

But Australia has experienced 21 years of uninterrupted economic growth and the high dollar means the cost of many imported goods has come down.

"So these things compensate for these higher more visible prices such as electricity and petrol," says Ben Phillips from the National Centre for Social and Economic Modelling (NATSEM).

He says the average household is more than $200 a week better off than in the mid-1980s.

"In fact right across the board our research shows Australian households, on average, are better off. We really are the lucky country."

Some demographers say the extra money has turned a generation of 'average battlers' into 'aspirational Aussies'.

"Australia is still very much focused on aspiration," says demographer Bernard Salt from KPMG.

"Two cars, four mobile phones, a Bali holiday, branded clothing, restaurant meals.

"I think this is what the average household expects in the western suburbs of Sydney or the western suburbs of Melbourne."

He says political leaders need to start talking to families about sacrifice, sustainability and saving for the greater good, particularly given budget revenue is falling.

"It's not about what your country can do for you. It's what you can do for your country. It's all too much about me, here and now. We need new leadership."

What do you think? Are living costs spiralling out of control? Or are Australians living a life of relative luxury?

Topics: federal-elections, consumer-protection, australia

First posted