Transport draining household budgets

The cost of transport on the family budget continues to rise year-on-year.

Australians will pay more than $700 more on transporting their families than they did in 2017, according to the Australian Automobile Association’s quarterly Transport Affordability Index.

About 14% of the total city-based household income is spent on transport. It has also risen in regional areas to 12.7%.

A “typical metropolitan Australian family” spent $18,221 in the year to September 2018, 4.2% up on the $17,485 of the year prior.

The AAA says this does not fare favourably against the consumer price index (CPI) which increased 1.9% this year.

The cost of a new car rose over the third quarter by $145 after the end of financial year blitz, meaning loan repayments went up about $33 per year.

The index shows Sydney remains the most expensive city transport-wise, with motorists handing over nearly $22,500 per year, despite being the fourth-ranked city for affordability.

However, Sydney remains the “most affordable city” to take out a new car loan due to “relatively low upfront costs” and lower interest rates offered.

Canberra has exceeded Melbourne as the most expensive city for car loan repayments.

Hobartians are paying the highest price for fuel, to the tune of roughly $2.71 more each week than the rest of the Apple Isle and mainland – an extra $141 approximately per year.

Melbourne (up $225 per year) is marginally second most expensive after Sydney, with Brisbane third; all three of which are above the 2018 third-quarter average.

Bunbury, Geelong and Alice Springs are the most expensive regional cities, with Wagga Wagga the among the cheapest.

Fuel costs, car loan repayments, comprehensive insurance premiums, on-road costs including registration, CTP and licensing fees are the top expenses draining household budgets.

The AAA’s report also notes the higher average costs regional families face for fuel compared to city-dwellers, the significantly cheaper insurance premiums found between states and territories in respective regional areas, and the considerably cheaper registration and CTP for South Australians due to the government’s regional/metro pricing structures.

Roadside assistance has increased slightly on average and so too has the cost of servicing and tyres due to CPI increases.

Sydney-siders should be grateful for the Toll Relief Shceme which has saved NSW city households a $41 increase in fees and charges.

AAA chief executive Michael Bradley says families are generally paying more than they have in a long time.

“Even an increase in average weekly earnings for the typical city and regional families has not eased the burden of transport costs,” he says in the report.

“The last quarter’s rise in transport costs was largely driven by repeated increases in fuel prices across all capital cities and regions,” Bradley explains.

“Transport is a significant and unavoidable cost to households. Governments at all levels must consider these cost pressures when formulating policy,” he adds.