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Struggling to stay warm and pay rent, Australians feel the pinch

by Seb Starcevic | SebStarcevic | Thomson Reuters Foundation
Monday, 1 August 2022 08:00 GMT

Hairdresser Ally Barbagallo at her salon near Melbourne Australia, 19 July 2022.Thomson Reuters Foundation / Seb Starcevic

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The inflation diaries: Australians face a chilly 'winter of discontent' as heating costs soar

By Seb Starcevic

MELBOURNE, Aug 1 (Thomson Reuters Foundation) - On the coldest morning for years in the Australian city of Melbourne, Peter Sutton, 58, was forced to stay in bed - unable to turn on the heating because he cannot afford to pay the bills.

"It's very, very difficult," he said by phone from his flat in a southeastern suburb of the city. "By the time I pay my bills, there's not much left over."

Australia's cost-of-living crisis has been particularly hard on Sutton, a former bank and retail worker who has been unemployed since 2018 and receives a state disability pension.

"I don't go out as often as I used to," he told the Thomson Reuters Foundation. "I'm buying food that is past its best-before date because it's discounted."

Read more: The Inflation Diaries series

Inflation is running at its highest rate in more than 20 years in the country of 25 million people, driven by surging prices for groceries, petrol and other everyday goods.

In May, the central bank raised interest rates for the first time since 2010, putting pressure on mortgage holders.

As in other parts of the world, Australia's inflationary squeeze has been driven by the effects of the Ukraine war and the COVID-19 pandemic on global supply chains.

But economic analysts say domestic factors have also played a role, citing devastating floods on the east coast in 2022 that hit agricultural production, labour shortages despite record-high employment, and stagnating wages.

In the middle of the southern hemisphere winter, a jump in energy prices is proving especially painful.

Genevieve, who asked not to have her surname published, is the sole parent of an eight-year-old boy, and fears she and her son will be homeless after she was evicted from her home of 23 years in Melbourne's eastern suburbs.

She said she has been unable to find a house in the city's increasingly unaffordable rental market.

"They expect when you apply for a rental that you're not paying more than 30% of your income towards rent, but I would spend about 80%," she said.

"People are sleeping in their cars and pitching tents in freezing conditions. It's absolutely inhumane and an outrage that this is occurring in an affluent country like Australia."

As her son has multiple allergies, Genevieve has to prepare his food with special ingredients, and said the rising cost of groceries has made that more difficult. Utility bills have gone up too.

"I just got my electricity bill and it's almost double what it was this time last year," she said, adding that she often skips meals and other basic necessities to make sure her son has everything he needs.

"I just go without. I don't have any luxuries, I don't buy new clothes, I don't get my hair cut."

Hairdresser Ally Barbagallo said her expenses have risen sharply in the past few months, forcing her to charge her clients more.

Barbagallo, 30, pays 107.50 Australian dollars ($74.41) a day to rent a space at a salon, 5% more than last year. The products she uses have also become more expensive in recent months: hair dye now costs 17 dollars a tube, up from 15, and tubs of bleach go for 47 dollars, up from 42.

Sutton said it is the "most vulnerable people" – those who are unemployed, disabled or on low incomes – who are suffering the most from cost-of-living pressures.

"People who are getting the least are forced to carry the burden," he said.

($1 = 1.4447 Australian dollars)

Explore our interactive map below for more stories about the human impact of the cost of living crisis in our three-part series on The Inflation Diaries

 More from Part Three of The Inflation Diaries series:

In France, families turn to charity food boxes as inflation bites

Mexico's informal workers hit hard as high prices fuel poverty

Lebanese struggle to put food on the table as inflation tops 200%

Venezuelans exit hyperinflation but see few reasons to celebrate

In Germany, many struggle as Russian gas squeeze drives up prices

(Reporting by Seb Starcevic @SebStarcevic; Editing by Helen Popper and Hugo Greenhalgh. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

Our Standards: The Thomson Reuters Trust Principles.