Price of bills set to soar by hundreds each year as Aussies battle the dire cost of inflation

Australians will soon have to fork out hundreds of dollars extra per year to keep up with the rising household bills as cost of living tightens its grip

It may be a new financial year, but there is no turning over a new leaf for thousands of Australians suffering from last calendar’s cost of living woes.

The 2022-2023 new financial year kicked off with a “same struggles, different day” mentality as grocery bills, health insurance premiums and interest rates continue to soar across the country.

And there’s little relief in sight, according to new research by Finder, which reveals how much bills are set to skyrocket in the next twelve months.

While pantry staples, petrol prices and home loans are facing more obvious price hikes, mobile plans, public transport and even a trip to the doctor have Australians digging a little deeper into their wallets.

Why are prices soaring now?

Economist Saul Eslake says a number of international and domestic events are to blame for Australia’s financial crisis, which has built up over the last two years.

This includes the ongoing war in Ukraine, repercussions of the pandemic and extreme weather events which are disrupting the supply chain.

As a result production and distribution costs are climbing, which in turn puts more pressure on vendors to raise their prices.

“Businesses have been able to pass on these cost increases to their customers in the form of higher prices because consumer demand has been so strong around the world,” Mr Eslake told news.com.au.

Additionally, Mr Eslake says an influx of monetary stimulus from the government and banks fuelled consumer demand as they had more savings to spend.

“What’s happening now is all these cost increases that businesses have faced all of a sudden have occurred in circumstances where they can actually put their prices up and still sell their stuff,” Mr Eslake said.

Inflation has occurred due to a number of factors affecting international and domestic supply chains. Picture: iStock

How much will my bills increase by?

Energy, home loans, mobile plans, health insurance and transport will all face price hikes this financial year, some by a significant margin.

Energy

We’ve known since last financial year that ballooning energy bills were on the horizon, after wholesale electricity prices already soared substantially by 141 per cent this year.

New South Wales is bracing for the biggest rise, as Sydneysiders prepare to spend up to $252 more on energy per year.

Queenslanders and South Australians will also spend more than $100 extra on their energy bills a year, thanks to increased default market offers (DMO).

Consumer network One Big Switch says the price of black coal and gas are largely to blame, while other energy providers urge their customers to switch suppliers or risk seeing their bills double.

Home Loans

Mortgage holders are also in the firing line as the Reserve Bank of Australia raises the cash rate for the third time this year.

Finder says the average homeowner with a $610,000 loan will soon see their monthly repayments increase by $351 a month if the cash rate increases by 100 basis points.

Those renting will also feel the financial sting off the back of investors who may raise weekly repayments to make up for rising costs.

Mobile and data plans

Big telco companies are also set to increase mobile and data plans. Telstra will charge its customers an additional $2 to $4 a month, while Optus will also increase monthly plans by $4 with Optus Sport to become a paid subscription service.

Senior editor of money at Finder, Sarah Megginson says Australians are spending up to $50 a month on phone plans, despite cheaper options available for the same service elsewhere.

“You can get a 10GB a month phone plan for as little as $10 on Finder,” Ms Megginson said.

From mobile phone plans to public transport fares, household bills are set to rise by hundreds of dollars. Picture: iStock

Health insurance and GPs

Health insurance may not have been a target of previous price rises but that’s all about to change from September.

Basic hospital cover will soon set back a single policyholder $167 a month, while extras cover will cost an average $68, adding up to a total cost of $1998 per year.

You should also be wary when booking in your next appointment with your general practitioner, as a number of public doctors went private from July 1.

Public Transport

NSW commuters will bear the brunt of rising public transport costs from today, with train, bus, light rail and ferry passengers all seeing a 3 per cent increase to their fare.

Certain routes will see transport users pay up to 12.80 extra a month as a result.

For those thinking about driving into work instead, already expensive road tolls have increased by 2 per cent meaning passenger vehicle drivers will pay up to $7.60 extra monthly.

The sting is worse for heavy vehicle drivers who will face additional costs of up to $22 per month.

It’s all about supply and demand says economist Saul Eslake. Picture: iStock

Will bills stop rising anytime soon?

While relief may not be imminent, prices will plateau once international and domestic supply chains return to their fully functional state.

For example, Economist Saul Eslake expects that once the war in Ukraine subsides, oil, petrol and possibly even food prices will drop.

The same goes for fresh produce and agriculture affected by the country’s wild weather events, as farmers will be able to produce more supply if their crops have time to grow.

“For some of those commodities, like food and petrol and so forth, what goes up sometimes does come down,” Mr Eslake said.

“But for services, and for things like electricity and so forth, it‘s pretty rare.”
Mr Eslake also said based on comments made by Governor of the Reserve Bank Philip Lowe and Treasurer Jim Chalmers, inflation will continue to occur until it peaks at 7 per cent at the end of this year.

“We know for example, petrol prices have kept coming up, and we know that there are big increases in electricity prices coming and they will feed into other things as well,” Mr Eslake said.

However there is some hope that the costs of goods and services that rely on a supply chain will ease once a sense of order is established.

“I think there‘s evidence that the price of inflation that’s driven by supply chain disruptions is easing. For example, container shipping costs went up by 400 per cent (during the pandemic), but now they’ve come down quite a bit,” Mr Eslake said.

While the cost of living won’t stop rising for some time, there’s a number of things that you can do to ease the financial burden of costly everyday essentials. Picture: iStock.

Tips to relieve financial pain

In the meantime, there’s a number of cost-effective ways to manage your bills even if you are financially struggling.

Research shows Australians spend up to $11.6 billion extra per year on essential household bills, perhaps even more now with the cost of living on the rise.

One way to significantly cut this number is to shop around, not just for insurance and home loans but for everyday necessities such as phone plans, internet and electricity.

“While households have many unavoidable ongoing expenses, by investing a couple of hours of time comparing your products and providers, you could save hundreds or even thousands of dollars each year,” Finder’s Sarah Megginson said.

Comparison sites are a good place to start, but it’s recommended that you go directly to the supplier to avoid any hidden fees or commission costs.

If you’re struggling to make ends meet between your home loan repayments and putting food on the table, banks offer a number of financial support options such as pausing repayments or changing the terms on your loan.

Finally, in terms of consumer habits, buying products in bulk from wholesalers or purchasing fruit and vegetables from markets opposed to supermarkets can save you money in the long term.

This is only a short list of easy money-saving hacks, but there are plenty of other tips out there that can save you a bucketload.

But at the end of the day, Ms Megginson urges consumers to think twice before buying and to weigh up whether each purchase meets your budget.

“If you think you are paying too much, you are probably right,” she said.