Economy

Feb 7, 2013

The strange case of the national delusion on cost of living

Polling has found many people think the cost of living is soaring -- when in fact it's not. Crikey investigates which purchases we're particularly deluded about.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

Last week, Essential Research asked voters to give their impressions of how much prices had changed on a range of basic consumer items over the last two to three years. The results give us an idea of how realistic voters actually are about what’s happening with inflation.

Let’s start with something on which there is universal agreement: 70% of voters said they were paying “a lot more” for electricity and gas (22% said “a little more”). And that corresponds with reality: according to ABS inflation data, electricity prices have increased by 38 index points since December 2009, or over 16% a year. Gas has gone up by 29 index points, or around 11% a year.

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29 comments

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29 thoughts on “The strange case of the national delusion on cost of living

  1. fredex

    Its not “strange” at all.

    It’s entirely as expected and according to the presentation in the mass media.

    Peter Martin, at his site [you can check it out], has a snip of Ch. 10 news totally misrepresenting the reality [and letting an ex-state LOTO blame the ALP in the process as an added bonus].
    Ch 9 did something the same about the same time and got quoted by the Liberals in a press release that was later ‘unreleased’.
    The COALition, of coarse [sic], bleats about the rising COL virtually on a daily basis – and gets dutifully repeated by the media.

    No wonder many people are misled.

    So why the surprise?
    Propaganda rules.

  2. Mark Duffett

    It’s this sort of thing that really makes you have second thoughts about democracy.

  3. Holden Back

    Isn’t part of the basic assumption of consumers noticing prices falling that they are always buying the same things?

    Let’s say you have children – the buggers keep growing, and you’re not going back to buy the same items of clothing each year. It would be difficult to perceive the overall reduction, as your growing children develop tastes and become part of particular target markets.

  4. Michael Hilliard

    As FD said, our sitting around and complaining is world best practice.

  5. Apollo

    So I’m about right to suggest that the dole only needs to be raised from 246/W to 260/W now to catch up and 3% more next financial year.

    Petrol is only a tat higher than in 2007 when Howard lost the election.

    Problem is low income earners get hit by rent increase.

    I wonder if they half the amount of negative gearing rebates over 5 years by reducing 10% per year, or over 7 years by reducing 7% per year ( or even allow only full deduction for the first investment home loan and reduce the rest); and use the budget savings to build affordable public housings and infrastructures that would actually boost productivity and living standard without damaging the housing market.

    I saw a documentary on SBS on Saturday about people who collect recyclable at rubbish dump and the art project to help them. It was sad and inspiring at the same times, it brought tears to my eyes. Some of them even had to eat food from the garbage. Australians just whine too much.

    I went to a few functions over the festive season, half of the food was wasted, made my heart ache. The amount of energy to grow, transport, storage and cook all wasted and more pollution to the environment. Means while the farmers get squeezed by the whole salers and the supermarket. There should be a law and allow customer to waste 100g of food only and $1 per gram tax for anymore excess wastage, give back to the farmers and the fishermen.

  6. Apollo

    SBS documentary on Brazil

  7. Honest Johnny

    Of course when you add wage rises to the equation, the national delusion becomes even more strange. I think Bernard has done some earlier work showing that the majority of voters are actually better off now than a few years ago.
    Having said that, there are some sections in our society where people are “doing it tough”, for example people living on welfare.

  8. Hunt Ian

    I don’t have second thoughts about democracy as such but do have second thoughts about “democracy” in Australia, where ownership of MSM is more highly concentrated than in most other formal democracies. All of our formal democracies suffer from the fact that only a few in government and MSM set the public agenda of debate (treasury was obviously interested in getting the govt to free taxing income from super but the belting from MSM forced the govt to reiterate its position that over 60s would not have their super income taxed, which then let some MSM belt the govt for changing its mind) and only a few control commentary in the MSM. What would be the chances of a political party to win elections, if it campaigned to have the dominance of MSM reduced?

  9. Mike Flanagan

    Your so right Apollo. There are millions of Indians that have never had any other source of money or sutainance than the trash and food waste disposed of by the middle classes.
    A recent UK published study showed that in excess 20% of all foodstuffs end up in the waste.

  10. John Bennetts

    Quote:”according to ABS inflation data, electricity prices have increased by 38 index points since December 2009, or over 16% a year.”

    Let’s assume that the period in question is only 3 years and that prices have risen by 38%. That is less than 12 percent per annum, compounded.

    Unless, that is, the phrase “38 index points” means something altogether different and not yet defined.

    With respect, Mr Keane, this is no way to say whatever it was that you were trying to say. Was half of your article chopped by the subs? Or did a dog eat your homework?

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