Australian families feel the squeeze: who is hit hardest by the cost-of-living crisis

Australia's cost-of-living crisis has deepened, with new data showing that some families have taken a massive financial hit. The worst affected are low-income households, renters, and single-parent families, who are spending a larger share of their income on essentials like housing, food, and energy. Rising interest rates and high inflation have eroded purchasing power, while wage growth has lagged behind. For many, the buffer of savings built during the pandemic has been exhausted. The Reserve Bank's aggressive tightening cycle, aimed at curbing inflation, has pushed mortgage repayments sharply higher, particularly for those who borrowed heavily in recent years. Meanwhile, rents have surged in most capital cities, leaving tenants with little room to negotiate. Essential items such as electricity, gas, and groceries have also become more expensive, forcing families to cut back on discretionary spending. The burden is not evenly shared: households in outer suburbs and regional areas, where car dependence is high, face additional fuel and transport costs. The Australian Council of Social Service has warned that the crisis is pushing more people into poverty, with demand for emergency relief services at record levels. The government has responded with targeted measures including energy bill rebates and increased rental assistance, but many advocates say these are inadequate given the scale of the problem. The data underscores a growing divide between those with fixed-rate mortgages or no debt and those exposed to variable rates and rising rents. As the economy slows and unemployment edges up, the immediate outlook for these families remains challenging.