In any election campaign were you playing a drinking game based around utterances of “cost of living pressures” you would not be long for this world, so poisoned with alcohol would you become. That is the case this time round even while the latest figures suggest cost of living growth is slowing. The picture is more complex and harsh for households when we consider income growth and which items are the ones with the biggest price rises.

Reality rarely gets a run in an election campaign full of feigned outrage | Greg Jericho Read more

There are a couple of golden rules of politics. The first is never go into a strip club with an undercover reporter while drunk and then abuse the women working there, but a close second is never, ever suggest cost of living pressures are anything but tightening.

The reality of course is that cost of living pressures at the moment are pretty low – and that is across all households.

The latest figures from the Bureau of Statistics suggest in the past year for employee households and for those on the age pension the cost of living rose a mere 1.4% while for self-funded retirees and households whose income comes from non-age pension benefits, the increase was 1.6%:

That is historically low, and yet should Scott Morrison start boasting about bringing down cost of living pressures, well ... he might as well hand over the keys to the Lodge now. People always feel that things are going up, and no politician regardless of reality is going to be able to tell them otherwise (at least not if that politician wants their vote).

And there are some good reasons for that view – it is not just about people only counting the price rises and not considering the falls.

Cost of living is essentially inflation with a few tweaks. First, instead of counting house prices as occurs in the CPI figures, the cost of living counts mortgage interest rate charges.

The ABS also splits up households into various income types, while the CPI is just an average of all households in Australia.

This means that the spending habits of different households is taken into account. Employee households for example spend on average 7.46% of their weekly expenditure on rent (remember this is an average so it includes those households who don’t rent) while those households on other government benefits spend 17.31% and self-funded retirees spend just 0.65%.

The big difference is mortgage rates – these greatly benefit employee households because they are the ones most likely to have a mortgage, compared with those who rent or the retirees who have paid off their home.

And because from 2012 to 2017 mortgage rates were falling and house prices were rising steadily, the cost of living for employee households was actually rising slower than overall inflation:

But since the end of 2017 with mortgage rates essentially flat, and even rising a little, while houses prises have come off the boil, the cost of living for employee households has been rising marginally faster than that of the CPI:

But even still cost of living remains low. So why do we still feel the pinch – or are we just imagining it?

The first aspect is that cost of living only takes into account the costs (obviously) – we need to look at income to see the real impact on our standard of living.

And here the problem is that while inflation growth has been very low, household income growth has been even lower:

Since the 2013 election inflation has grown 9.7%, but household incomes have grown only 7.8%. That makes for a 1.7% fall in household standards of living.

You’re not going to get very far boasting that cost of living pressures are easing in that scenario.

But also the items that are rising take up more of our spending than those that are falling.

In the past year the 20 items that had the biggest price rise accounted for 22% of employee households’ average weekly spending; while the 20 biggest price falls accounted for just 19.1%:

In essence it does feel like more prices are rising because those items with the biggest price rises take up more of our weekly share of spending than do the items that have had price falls.

Another way to look at it is the median price rise of the biggest items compared to the smallest ones.

Since the 2013 election the median price increase of the 32 items that account for more than 1% of the total weekly spend of employee households has been 13.3%, while the median increase of the 53 items that account for less than 1% of weekly spending is just 2.2%:

The bigger price rises are coming in the bigger items. Yes there are price falls, but we notice them less because they are for items we don’t spend as much of our income on individually.

The latest cost of living figures show just how little inflation growth there is in the economy. The lack of demand is feeding into little pressure to raise prices. But this is not a great picture for households. First, average household income is not rising faster than even the very weak growth of prices, and we continue to feel the biggest price rises in the biggest items – and more often than not – those are the items that we cannot avoid paying.

• Greg Jericho is a Guardian Australia columnist