Cost of living goes up, up …

MOST Australians face a faster cost of living rise than the official rate of 3.3 per cent.

The increase facing working families is 4.9 per cent, the increase facing age pension households is 4.1 per cent, and the increase facing Australians on welfare is 5.1 per cent, according to living cost indices published yesterday by the Bureau of Statistics.

Even self-funded retirees, the group with traditionally the slowest increase in the cost of living, faced an increase of 3.4 per cent in the year to March.

How can it be that most face prices rising faster than the CPI?

Mortgages, cigarettes and food provide the answers. The bureau says the price of tobacco products soared 27.5 per cent in the year to March, the direct result of higher tobacco taxes.

While tobacco is unimportant in most shopping baskets, combined with alcohol it accounts for 10 per cent of dollars spent by people on welfare. Food is also more important for those on benefits, accounting for 19 per cent of the total spent, compared with 15 per cent for the broader population. Floods and a cyclone have pushed up the price of vegetables by 21 per cent and fruit by 25 per cent.

Read more: http://www.theage.com.au/national/cost-of-living-goes-up-up-8230-20110516-1epxu.html#ixzz1Ma350Fjo