The Australian nation is currently facing a severe crisis of inflation, which is causing great distress among its citizens.
The hardest hit are Australians aged 30-34 and those who rent their homes,
who are grappling with skyrocketing housing expenses.
According to a report by CommBank IQ, essential item prices are rising in line with inflation, forcing Australian consumers to cut back on everyday spending.
Furthermore, travel and accommodation expenses have surged by over 39 percent in the January-March period compared to the same period last year.
The report highlights a stark disparity in spending patterns based on age groups.
While older Australians are increasing their expenditures, younger consumers are tightening their belts.
Individuals under the age of 35 account for a mere 3.4 percent of annual spending, which is nearly half of what their older counterparts spend.
Australians aged 25-29 are currently spending the least, while their average expenditure has risen even for the 18-24 age group.
CommBank iQ, a joint venture between Commonwealth Bank of Australia and The Quantum Group, provided this analysis.
The Deepening Housing Crisis
The housing and rental crisis is particularly impacting international students studying at Australian universities.
Many international students face the grave risk of poverty, poor health, and even homelessness.
For instance, Joe Jiang, a 27-year-old student from China, revealed that he is paying $300 per week to sleep in a tent within a hostel.
Similarly, Sherlyn, a 27-year-old from Zimbabwe, shared that she was compelled to stay in a homeless shelter for two weeks, alongside 30 other individuals, in Perth.
Root Cause of the Crisis
The inflationary pressures in Australia have been fueled by the significant profit margin increases observed in the country’s major supermarkets during the pandemic.
An examination of Coles and Woolworths’ financial accounts over the past five years reveals that these.
supermarkets took advantage of the pandemic not only to sell more goods but also to boost their sales turnover.
While Coles attributed the increased margin to savings in other areas, Woolworths claimed that inflation was driven by higher wholesale prices paid to suppliers.
Nonetheless, the rising profit margins in the supermarket sector suggest that shoppers are being charged more.
to offset costs and other escalating business expenses, such as energy bills.
Reportedly, Coles’ supermarket division’s gross margin rose from 24.7 percent shortly before the pandemic to 26.5 percent currently.
while Woolworths’ Australian food division saw an increase from 29.1 percent to 30.7 percent during the same period.
Coles and Woolworths collectively dominate two-thirds of Australia’s supermarket sector.
According to a spokesperson from Coles, the primary reason for inflation is the higher wholesale prices being paid to suppliers.
In the meantime, Woolworths had previously indicated in its financial results that overall price increases aligned with supplier cost increases.
Representatives from the supermarkets also pointed to factors such as the war in Ukraine impacting.
canned goods and fertilizers, as well as disruptions in supply chains due to the coronavirus, leading to higher food prices.
Moreover, the housing sector’s rising costs can be attributed to the lack of social housing in Australia.
A significant portion of international students in the country are facing unsafe housing conditions and an increasing cost of living.
Reports indicate that Australia is facing a shortage of 524,000 social housing units, which is projected to reach 671,000 in the next decade.
Meanwhile, the federal Labor government’s second budget, released on May 9, revealed a 31.8 percent cut in the housing and community facilities budget.
Calls for an inquiry into the profit margins earned by supermarkets in Australia over the past years have been made amidst the rising inflation. An expert at the competition