What difference will increased Centrelink payments make amid surging inflation and rising cost of living?

| 17.03,23. 06:55 AM |

What difference will

increased Centrelink

payments make amid

surging inflation and

?rising cost of living

cash lays on a kitchen table beside a cup of tea and a list of bills owing
Australia is experiencing its biggest increases in living costs in more than 30 years.(ABC News: Sharon Gordon)

Increased welfare payments will hit bank accounts in coming days, but it's too little, too late for Australians already packing their bags and moving across the continent in search of a cheaper lifestyle.

From this Monday, payments such as Jobseeker, aged pension and single parent benefits will rise by about 3.7 per cent, as part of a biannual adjustment to reflect inflation.

It means the age and disability support pension will go up $37 a fortnight for single people, and Jobseeker by $25 a fortnight.

Financial counsellors are warning it's "a drop in the ocean" for those struggling to pay for food, fuel and utilities amid the highest inflation in more than 30 years.

Retiree Lesley Westlake receives a war widow's pension and will be among those benefiting.

A woman with short hair smiles at the camera while standing outside
Ms Westlake says she'll leave Broome sooner than planned due to high living costs.(ABC News: Erin Parke)

"It is certainly welcome, but it still won't bridge the gap," she said.

"Especially for those of us living in places like Broome, where the cost of everything – food, fuel, electricity – is already much more than in the city."

Residents flee to cheaper areas

The recent cost-of-living increases are being more keenly felt in remote and northern Australia, where groceries, bills and rent were already significantly more expensive.

And it's causing a little-documented migration of people to larger urban centres in search of a cheaper lifestyle.

Ms Westlake – who is 72 years old and owns her apartment in Broome – said she would have to leave the Kimberley region sooner than planned.

A woman in a kitchen reached for the fridge door
Ms Westlake worked as a school principal before becoming a full-time carer for her late husband. (ABC News: Erin Parke)

"I top up my pension from my savings, but that's not sustainable," she said.

"The costs up here are significantly higher, for fuel, food and electricity, and I don't think many people are aware of that."

An aerial image of blue ocean and coastal strip of land with dirt tracks
Northern towns are more expensive to live in due to the added cost of trucking supplies.(ABC News: Erin Parke)

Despite the sweltering wet season heat, she hasn't turned the air-conditioning on since moving into her home last June.

Instead, she showers multiple times a day and changes her clothes more often.

"I was hoping to live in Broome for 10 years, but I don't think I'll be able to afford to be here that long," she said.

A woman leans over groceries on her kitchen bench
Ms Westlake uses sales catalogues to try and save money on the weekly shop.(ABC News: Erin Parke)

"And I already know retired people who've moved down south this year because of the rising costs.

"If you don't have your accommodation and bills subsidised by an employer, it's a very expensive place to live."

Evidence living costs vary nationally

Nationally there is no data available on the variation in living costs across Australia.

The Consumer Price Index tracks the shift in costs in capital cities, but does not provide an apples-for-apples comparison of what it costs to live in different locations.

The Consumer Price Index updated for Dec 2022 quarter shown as a line graph, with steep increase over last eighteen months.
Economists believe inflation peaked in late 2022, with a slight reduction recorded in January 2023.(Australian Bureau of Statistics)

Nor does it capture data on regional areas.

But there is evidence northern and remote residents are doing it tougher than city-dwellers.

In WA, the Regional Price Index shows northern areas are at least 10 per cent more expensive than Perth.

The Pilbara mining town of Port Hedland is the most expensive in the state — costs there are an eye-watering 25 per cent higher than in the capital.

A hand holding a collection of Australian currency with dirt road in shot.
The WA Regional Price Index shows northern towns are more expensive.(ABC News)

A federal parliamentary inquiry in 2020 laid bare the inflated prices being paid by people in remote Aboriginal communities.

One example is the cost of fuel – in recent months, diesel and unleaded have cost more than fifty cents a litre more in Broome, than in cities like Perth and Sydney.

A coffee can cost as much as $6.50, and locals have taken to social media to express outrage at being charged $16.50 for a pint of beer at a pub.

?So are the growing cost pressures prompting people to move

'It's a sad state of affairs'

Veronica Johnson is a financial counsellor at the Circle House community centre in Broome.

Every day, she deals with an unprecedented backlog of locals facing financial stress.

A woman in a red dress smiles at the camera while standing outside.
Ms Johnson says many working people are struggling financially.(ABC News: Erin Parke)

She knows their pain firsthand – the same week the ABC visited for a chat, members of her own family were packing up and leaving town in search of a more affordable lifestyle.

"My daughter is leaving town on Friday, with her partner and grandson," she said.

"They're literally a young couple who can't afford to live with these expensive prices.

"It's really really sad … I wish they could stay, but I truly understand.

"It's virtually impossible for a young family to get a good start up here."

Hunting and fishing for food

Ms Johnson said some clients were living off 2-minute noodles, and were wracked with guilt about not being able to afford nutritious food for their kids.

"We are flat out with people just basically on the edge — and people actually commit suicide due to financial stress," she said.

A line of posters pinned on a wall outside saying 'Money Support Hub'
Financial counselling services are run in many remote Aboriginal communities.(ABC News: Erin Parke)

"And it's widespread among people who are working … I'm earning reasonable dollars, but also struggling sometimes.

"I think a lot of the time the prices in the Kimberley are catering to rich tourists and people earning big money mining."

She said more competition for food shopping options would help, as well as extra subsidies for people living in remote Aboriginal communities.

"Some people are going out fishing and hunting more, because it's just unaffordable at the community store," she said.

"So I think the increase in payments will be a drop in the ocean in terms of assisting clients who are in financial stress."

Two women in an office smiling as they look at paperwork
Ms Johnson has a been a financial counsellor in Broome for four years.(ABC News: Erin Parke)

The Albanese government has so far resisted calls for a more substantial increase to welfare payments, despite calling for it in opposition.

Economists believe inflation has peaked, but say it's difficult to predict if and when the price of goods and utilities will drop.

(Votes: 0)

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