Key Points
- A new report argues people on lower-incomes pay a 'poverty premium'.
- Anglicare Australia's report says they end up paying more for essentials.
- The inability to buy in bulk or to shop around, or living far from work are some examples.
Australians on lower incomes end up paying more for essentials in the long run compared to those more advantaged and ultimately face higher living costs, a new report from charity Anglicare Australia has found.
Most of that is because to rely on, time to spend, or the resources available to do things such as buy in bulk, shop around or access the internet at home.
Anglicare Australia found lower-income residents end up paying up to one-and-a-half times more for the same services obtained by others.
"People balancing caring responsibilities with casual low-waged jobs rarely have the time to drive to multiple supermarkets to get the best price or call multiple providers to get the best deal," the report said.
People living in low socio-economic areas or remote communities were also often hit with higher commute and travel costs.
And most have to rely on payday loans with higher interest rates than standard credit loans. For example, the report said someone needing a $2000 loan in an emergency can pay 45 per cent more through a payday lender, compared to through a low-rate credit card.
For someone who is topping up their phone plan with data each week, the cost could be 25 per cent higher than someone on a regular monthly plan.
Driving an older car carries an 11 per cent higher fuel cost because of lower engine efficiency.
Anglicare Australia said poorer Australians not only pay for essentials with less money coming in, but also with penalties that higher-income households don’t experience.
"Our research shows that it costs more to be poor," Anglicare Australia executive director Kasy Chambers said.
"People pay more because they can’t afford to buy in bulk or to shop around. They pay penalties if they’re forced to live further away from their work and communities. And the best credit deals are for people with high credit scores and healthy bank balances.
"These extra costs are a poverty premium, punishing people who are already earning less."
She said this situation forced people into "debt spirals" as they tried to juggle all of their costs.
Others were forced to forego basic essentials by skipping meals, missing medical appointments, and avoiding getting insurance.
"These numbers show us that Australians doing it tough need real action, and real leadership," Chambers said.
"That means raising the rate of Centrelink payments, making the minimum wage a living wage, and creating cheaper insurance and energy options for people who need them."
