Shocking report reveals West Aussies were feeling the pain before Middle East war kicked off

Everyday West Australians were feeling gloomy about their financial futures — with their budgets squeezed by cost-of-living hikes — even before the Middle East conflict triggered a fuel crisis, it can be revealed. Undertaken last month, just after the Reserve Bank hit mortgage holders with one of two interest rate hikes so far this year, the Chamber of Commerce and Industry WA’s latest survey found consumer confidence had slumped to the lowest level in three years. The study of 836 WA families over February 9-16, dispels the myth that rising fuel costs sparked by the war with Iran was the sole reason WA families were currently doing it tough, adding to the case put by social services groups that the Cook Government must deliver substantial cost-of-living relief in its May budget. The CCIWA survey found just over a quarter of households — or 28 per cent — were already expecting economic conditions to worsen, up six percentage points from the December quarter. Living costs, were identified as the biggest drag on confidence, identified by more than seven in ten — or 72 per cent — of WA households. And with motorists now paying more than $2.50 a litre for unleaded fuel, and over $3 a litre for diesel because of the Middle East conflict, economists warn financial pain felt by WA families would get much worse. “Since we conducted the survey in February, we’ve seen another interest rate rise, and of course the skyrocketing of petrol prices,” CCIWA’s Chief Economist, Dr Daniel Kiely said. “The hit to household budgets will be significant and comes at a time when many Western Australians were already feeling the pinch.” With the average new loan in WA now being $688,036, loan repayments are about $3900 a month - a rise of $218 a month since interest rates began to rise in February. If, as expected there is another interest rate hike in May, that will mean an extra $328 a month. WA families say their their household finances are taking a beating. “A concerning 38 per cent indicated their household finances were either worse or much worse than a year ago – an increase of eight percentage points,” CCIWA says. With a rise in living costs being the number one concern for WA families, the CCIWA survey found interest rates were the second most influential factor shaping consumer sentiment. “Nearly three in five respondents – 59 per cent – identified uncertainty around future rates as weighing on their economic expectations, up by five percentage points from the previous quarter,” CCIWA says. And it wasn’t just mortgage holders feeling the pinch. Spiralling rents, the median rent in Greater Perth now more than $700 a week, were hitting hard. “This deterioration (in household finances) was more pronounced among renters and households across regional areas, suggesting that cost pressures may be unevenly distributed across the State,” CCIWA says. Even before fuel costs began to skyrocket, WA families were already looking at ways to tighten their belts over the next six months. Around half of West Aussies surveyed they were looking for ways to save money – cutting nonessentials where possible. “Planned reductions (in spending) were highest in cafes and restaurants and consumer goods, with just over half (54 per cent) of households planning to cut spending across these categories.” The CCIWA report says. “This was followed closely by recreation and holidays (52 per cent) and bars, clubs and pubs (51 per cent). “Homewares and furniture did not escape consumer spending cuts, with just under half (49 per cent) planning to cut spending across this category.” Dr Kiely said he expected the belt tightening would go up a few notches over coming weeks. “Households were already showing caution around spending so we can expect consumers to tighten their spending even further as a result of fuel prices,” Dr Kiely said. In last year’s state Budget, the Cook Government estimated a “representative household” spent about $6500 a year on government fees and charges alone – charges like electricity and water charges as well as motor vehicle and public transport costs making up those costs. Ahead of the May 7 state Budget, Treasurer Rita Saffioti revealed to The Sunday Times last week that she was now having to re-think her budget’s cost-of-living measures in the wake of the Middle East conflict. About to announce its eighth consecutive budget surplus, already racking up a $2.4 billion surplus in the first six months of this fiscal year, the Cook Government is under pressure to deliver substantial cost-of-living reprieve. “We want to see a comprehensive cost-of-living strategy that ensures no West Australian is left behind,” Anglicare CEO Mark Glasson said. Financial Wellbeing Collective General Manager Helena Jakupovic told The Sunday Times this week emergency relief and food access service reached all time high last month, with calls reaching 5,122 – a 41 per cent increase from 3,645 last year, driven largely by cost‑of‑living pressures. Extra fuel costs since February had made the situation worse, Ms Jakupovic said. “Demand for fuel assistance is rising across Emergency Relief and Food Access Service. For some clients, the cost of fuel means they can’t even afford to drive to Foodbank WA, causing significant stress and deepening hardship - at times leaving people without reliable access to food or struggling to cover other essentials as pressures continue to mount,” she said.