Sarah-Jane Tasker: Path out of the living cost crisis looks long and arduous
When KFC is messing with its menu by substituting cabbage for lettuce, then you know the cost-of-living crisis has entered a new phase.
Even the Prime Minister weighed in on cabbage-gate, saying: “Cabbage isn’t the same as lettuce. That’s just wrong.”
What is wrong is that we are firmly in a cost-of-living crisis and while we can all joke about KFC’s new twist on lettuce, plenty of families aren’t laughing because they are already feeling the financial pinch.
This crisis is unparalleled and isn’t being driven by factors witnessed in other price surges, such as increased demand and wages.
It has been fuelled by a pandemic that upended global supply chains, the war in Ukraine that shows no sign of ending and an energy shock without a quick fix.
The West reported on Thursday that the average Aussie household was spending $85.76 a week more now than 12 months ago, with food, transport and housing representing the bulk of that figure.
The housing portion of that spend will keep rising, with the Reserve Bank of Australia lifting the official cash rate this week by an unexpected 50 basis points, with the promise of more significant increases.
The RBA is hoping its rate hike plan will cool inflation but given the experts there told us interest rates would not rise until at least 2024, we may not hold out hope they’ll achieve their goal.
What we can say for certain is the cost-of-living crisis is going to get worse before it gets better and it’ll take months to see the wider economic effects, which will be just in time for the Labor Government’s first Budget in October.
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