Australians are dealing with an escalating cost-of-living crisis, with inflation at the heart of the struggle. Critics say the government’s spending choices and policy missteps fueled skyrocketing prices, interest rate hikes, and an acute housing shortage, leaving families and businesses reeling.
Weak Inflation Response
The Reserve Bank of Australia raised interest rates 13 times since May 2022, with four 0.50% hikes and nine of 0.25%. The increases, aimed at curbing inflation, only added pressure on households already burdened by rising costs. These hikes were a reaction to inflation driven by government policies, including a fuel excise tax hike that increased transportation costs, rippling through the economy and exacerbating the crisis. The rate rises hurt Australians who were incapable of doing anything to reduce the government-caused inflation.
The amount of Government spending has also drawn fire. More than $1.1 billion was sent in foreign aid to Ukraine, a move most Australians see as misaligned with domestic priorities. At the same time, millions of dollars continue to flow into renewable energy projects, which critics argue lack short-term benefits for struggling Australians. The long-terms benefits are unknown due to their short lifespan and recyclability. Meanwhile, energy relief payments of $300 per household — issued after promises to lower energy costs failed — added further inflationary pressure.
“The government keeps blaming external factors, but their overspending created this crisis,” Australians critical of recent policies say.
Inflation, broken promises, cost of living crisis. NewsBlaze AI cartoon
Minimum Wage Increase
The Fair Work Commission’s decision to increase the minimum wage by 3.75% only added further strain on the economy. While well-intentioned, the policy led to business stress and closures as owners grapple with rising operational costs.
Housing affordability reached crisis levels, worsened by an unprecedented immigration surge of one million people. Critics say this influx was poorly planned, straining an already undersupplied housing market. Home prices surged by 25% or more in many areas, while rents rose over 12%, leaving many families struggling to find affordable housing.
Salvo Report
The Salvation Army’s May 2023 At Breaking Point report further highlighted the growing housing insecurity. It found that 27% of respondents were behind on rent, mortgage, or board payments, with 51% in arrears for up to two weeks and 78% up to four weeks. Additionally, 35% of private renters reported that finding and maintaining safe, affordable housing — and avoiding homelessness — was among their greatest challenges over the past year.
“The housing market is broken,” said David Bliss, Branch Secretary of the Shop, Distributive and Allied Employees’ Association (SDA) of Newcastle and Northern Branch. “Too many workers are struggling to put an affordable roof over their head.”
Squeezing Families
Families across the nation are squeezed between soaring living costs and escalating mortgage or rental payments. The Australian Senate’s Second Interim Cost of Living report revealed that an additional 766,000 households are now in mortgage stress, bringing the total to a record 1,573,000.
Australians are calling for urgent government action to address the inflation crisis and its cascading effects. The government doesn’t seems incapable of doing anything about that, expecting Australians to suffer through several more months until the Federal Reserve decided to drop interest rates. Any interest rate drop is unlikely to help many already under financial stress.
Economists suggest reforms to stabilize housing markets, reduce inflationary spending, and align immigration levels with infrastructure and housing capacity.
As the cost-of-living crisis deepens, the government faces mounting scrutiny over its role in driving inflation and leaving Australians to bear the brunt of rising costs.
