Sydney, Aug 23: Australians now need to earn A$107,730 annually to keep up with the ongoing cost of living crisis, according to an analysis by Money.com.au.
This figure represents a significant increase from the average full-time salary of $90,000 at the start of the crisis in mid-2021.
Homeowners with a mortgage are facing even steeper financial challenges, needing $120,294 per year to keep pace with rising living costs and interest rates.
Since mid-2021, inflation has surged by 19.7 per cent, while wage growth has lagged behind at just 12.2 per cent.
This disparity has resulted in a 7.5 per cent loss in purchasing power for the average Australian.
Sean Callery, Money.com.au’s Finance Expert, highlighted the grim reality many Australians face: “Increasing living expenses and mortgage repayments are forcing many Australians to work extra hours just to continue putting food on the table and keep a roof over their head,” he said.
For homeowners, the situation is even more challenging.
With average home loan rates for owner-occupiers rising from 2.84 per cent to 6.03 per cent, those with an average loan of $555,600 are now paying $1,047 more per month, or $12,564 more per year, than they were in mid-2021.
Callery noted that while there has been some relief from higher interest rates on savings, energy rebates, and tax cuts, these measures have not been enough to offset the significant financial pressures many Australians face.
He emphasised that the impact of higher inflation and interest rates has been particularly painful for mortgage holders, who are “getting walloped by the Reserve Bank’s solution” to the cost of living crisis.
Sidharth Sondhi, a full-time accountant in Sydney, shared his personal experience, revealing that he needs to work an additional 8-10 hours per week, including driving Ubers on weekends, to supplement his income.
“A few years ago, a $100,000 salary was considered a high income, but with the current rate of inflation, a $100,000 salary is just mediocre these days,” Sondhi said.
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