Madonna King: Avocado isn’t as smashed as our bank balances

A rate cut doesn’t mean much when a cup of coffee is forecast to hit the $12 mark, writes Madonna King.

This rate cut, lauded as the start of home budget festivities, is akin to opening a brightly wrapped Christmas gift, and finding it empty. Sure we get to keep the paper, and perhaps even the ribbon, but that’s how much it’s really worth to families.

But if you were one of those – a homeowner with a mortgage – who was granted the financial fillip, spend it today – because it will be stolen back tomorrow.

Private health insurance will increase from April 1. Insurers have twice been told to rework their figures – so we know we won’t pay less, and that they think 8 per cent is needed to cover the cost of delivering services.

Private school fees have jumped up to three times the rate of inflation – so if yours only climbed 6 per cent, grab yourself a coffee.

Actually, don’t. A single cup is expected to cost up to $12 by Christmas because of the rising costs of beans, and chocolate – with cocoa prices at a 50-year peak – will be moved to the luxury section of shops.

Beer this month became liquid gold, with a six-monthly tax hike sending a pint to as high as $15. Thank God, my last cigarette was 30 years ago.

Property owners in the north of the state are paying up to 12 times others on insurance premiums. But some equity will come with the next bill – expect at least 5 per cent.

Forget eggs for breakfast. At some places, they’ve doubled in price, if you can find them.

And avocado is out too. My local cafe posted this yesterday: “A $2 surcharge will be added to all meals featuring avocado as prices have gone up 35 per cent in one week.’’

So the Reserve Bank’s little February festive fair is a magic trick.

Look, if you are lucky enough to have a $600,000 mortgage, you’ll save $92 a month!

Sunday Mail columnist Madonna King. Picture David Clark

Made you look, you dirty chook. It’s gone! Don’t feel too bad though. Renters get nothing.

And that’s just the start.

Let’s take the Queensland electorate of Rankin, which includes Brisbane’s outer southern suburbs of Brisbane, and chunks of Logan. Incidentally, it’s represented by the federal Treasurer Jim Chalmers.

More than 35 per cent of residents are renters – and rent accounts for more than 30 per cent of household income in 34 per cent of homes.

Those 38 per cent who have a mortgage do better, certainly, because only 15 per cent of them are paying more than 30 per cent of their household income into a mortgage.

But they’re damned if they are expecting relief by stocking their households through buy-now, pay-later offers – which now account for 40 per cent of Australian online purchases and charge a 25 per cent penalty if you pay late. No rate relief there!

Nor in property rates, which are due in a few months. One year into a four-year electoral cycle we can expect many will take the chance to raise funds, thinking we’ll have forgotten come election time.

The ACCC has also put telcos and energy companies on notice that it will be watching their pricing this year. It carries a standard warning on its website that you are probably paying too much if you’ve not changed your energy retailer (or at least bargained them down) in the past year.

They also have their eyes on the big retailers. Bear in mind your grocery bill is determined by their behaviour and right now they’re accused of price manipulation designed to make sure you pay more.

And that’s before I even get to how they justify 25 cents to carry home groceries in paper bags that too often break!

When you look at your budget, it’s hard to see anything that will drop in price – and those gas and electricity subsidies can’t go on forever.

Every price rise that hurts you puts more money into government coffers. Higher insurance premiums mean higher stamp duty revenues for the state government. Higher anything means higher GST revenues for the federal government – and they’re going to need that if they plan to find ways to subsidise higher living costs.

A call around of services this week found grocery bills jumping 36 per cent before any meat purchase, couples putting off having children, and a jump in homeless single men.

Parents are eating less, so their children can eat more and others are selling their car, because they can’t afford petrol.

This rate cut is a magic trick, and the joke is on us. It just doesn’t add up