Low income working households are $12 a week worse off than they were a year ago and are struggling to keep pace with increases in housing and utility costs, a report by the Western Australian Council for Social Service finds.
The report looked at the cost of living in WA and found wages were failing to keep up with increases in prices across the board with rent, gas, water and electricity hikes pushing more and people into financial stress.
Based on a theoretical family of four relying on the minimum wage the report found that while wages had risen $31 a week in 2010-11, the cost of key expenses increased by $43 a week, leaving the family $12 a week or $624 a year worse off.
“Low and fixed income households are particularly vulnerable to rising cost pressures,” the report said.
It said people on low incomes were more likely to have to make tough choices between essentials such as rent, utilities and food and may be forced to forego social and recreational activities.
Chief executive officer for WACOSS Irina Cattalini said WA had the highest rate of income inequality in the country and the gap between those at the top and those at the bottom was growing.
She said low income households were considerably worse off this year than they had been the previous year, which saw a light easing in costs.
“Strong growth in Western Australia’s economy is delivering significant benefits to those sections of the community who work in or deliver services to the resource sector. However for many others in our community who rely on the minimum wage, the strength of our economy has meant that a rapid rise in the basic costs of life has outstripped modest gains in income,” Ms Cattalini said.
“The consequences of rising living costs can be stark. Over the last year we have seen record numbers of people seeking financial assistance to pay utility bills and a record number of home repossession applications in the courts.”