Basics a slug for budget

Little left over from household spend for little luxuries

VICTORIAN households are shelling out on average almost $75,000 a year on general living expenses, a major study on spending habits reveals.

And families feeling the pinch are diverting a bigger share of cash to essentials rather than life’s little luxuries.

More than half of our budget is blown on “basics” — a proportion that has steadily risen over three decades — latest Australian Bureau of Statistics data shows.

The Household Expenditure Survey found that of the average $1430 Victorians spent on goods and services each week in 2015-16, key essentials sucked $843 from hip pockets.

Housing costs such as rent, mortgage interest payments, rates and home and contents insurance were the biggest drain ($257).

This was followed by food, including meals out and nonalcoholic drinks ($244), and transport, such as car costs, public transport and taxis ($218).

Nationwide, the latest survey found housing, food, energy, health care and transport “essentials” were swallowing a growing share of spend as opposed to purchases.

“A growing portion of weekly outlays is spent on basics,” ABS chief economist Bruce Hockman said.

“Spending on basics accounted for 56 per cent of weekly household spending in 1984, growing to 59 per cent in 2015-16.”

Housing catapulted to the top of the national average “discretionary” spending table, taking up 20 per cent. Food absorbed 17 per cent and transport 15 per cent.

In 1984, food took up 20 per cent of household spending, then transport on 16 per cent and housing on 13 per cent.

Education spending surged most since the last survey in 2009-10, rising 44 per cent.

Services and operations such as childcare, cleaning products and pest control climbed 30 per cent, energy and healthcare both by 26 per cent, and housing by 25 per cent.

Alcohol and clothing and footwear fell slightly.

Overall, average goods and services spending jumped 15 per cent from 2009-10, and almost tripled from 1984.

The ABS said that was partly due to inflation, along with demographic changes such as age profiles and the number of households with mortgages or dependent children.