INFLATION is hitting the hip pockets of working families harder than any other group, new figures show.
While average consumer prices rose 4.5 per cent last financial year, inflation in the basket of goods purchased by the typical "employee household" - where the principle source of income came from paid employment - was 5.7 per cent.
Mortgage costs, petrol, rent and health costs all make up a larger part of these households' basket of goods, helping to explain the difference.
Over the past decade, prices for working families have risen 40 per cent - the highest of any group - and well ahead of growth in general prices of 36 per cent.
The figures come from the Bureau of Statistics' latest annual breakdown of inflation for four household types - employed, pensioners, other welfare recipients and self-funded retires - which together represent nine out of 10 households.
Richard Denniss, the chief executive of the Australia Institute in Canberra, said the figures helped explain the "real pain" being felt by working families.
"What data like this does is allow us to actually see where the increases in pain really are versus where they're being imagined," he said. "It seems that the suburban families have probably had a more finely tuned radar on some of these issues than the consumer price index itself."
While previous surveys have highlighted the plight of pensioners and self-funded retirees, falling prices for fruit and vegetables - which make up a larger share of elderly households' weekly shop - meant the cost of living for these households rose by a relatively slower 4.3 per cent last financial year. This was down from a spike above 5 per cent in 2006 when the price of bananas spiralled upwards.
But Mr Denniss cautioned against thinking these groups were now better off.
"A slowing in the rate of growth doesn't mean they're back to where they started," he said. "While these latest numbers suggest that the last year's been a particularly bad one for families … we have also seen in previous years that pensioners and other welfare beneficiaries were doing it pretty tough."
The Prime Minister, Kevin Rudd, said in question time yesterday that pensioners had been struggling with the rising cost of groceries, rents and petrol for some time.
"They have certainly spiked in recent times because of factors like petrol and groceries … but the increased cost impact on the ability of single aged pensioners and married couples who are pensioners to survive on the basis of the age pension has been a challenge for a long long time."
The budget had provided an extra $7.5 billion in funding for pensioners, carers and those on disability support pensions, Mr Rudd said.
The Government's "root and branch" review of the taxation system would report in February on ways of getting the pension on a "more secure footing".
Mr Denniss said it would help policymakers if the Bureau of Statistics was given extra funding to produce its detailed breakdown of inflation every quarter with the consumer price index.
"If you spent a little bit more on the data, we'd have a more informed policy debate and we'd be able to respond to emerging problems more quickly," he said. "It is a pity that the ABS budget is being wound back so far that rather than getting data like this every time you get the CPI, we're only getting it once a year."
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