People on lower incomes are paying more for essentials including food, energy bills, credit, transport, and insurance, new data has revealed.
The Poverty Premium report, released by Anglicare Australia, found Australians are penalised if they can’t afford to buy groceries in bulk, pay costs annually, or upgrade to a more fuel-efficient car.
The concerning data has prompted renewed calls for more support for Australians struggling to make ends meet during the cost-of-living crisis.
Groceries
Buying groceries was among the ways people living in poverty were forking out more money as they were unable to spend more upfront for cost-effective bulk buying options.
The report found a 20-pack of Quilton toilet paper from Coles was 31 cents per 100 pieces compared to 60 cents per 100 pieces for a six-pack — a 93 per cent difference.
A value pack of beef mince was also 22 per cent cheaper per kilo than a 500gm pack.
Credit and finance
Borrowers on lower incomes, who are most in need of temporary assistance during an emergency, often experience higher credit card fees, interest rates and overdraft penalties.
Those borrowing $2000 on a payday loan are spending about 45 per cent more than those borrowing the same amount on a Commonwealth Bank low-rate credit card.
Transport
People living below the poverty line are also more likely to drive an older car and not upgrade because of the cost causing them to pay more for fuel.
Cars made in 2000 or earlier average 11.4 litres of petrol per 100km, compared to 10.2 litres for cars made in 2011 or later. This means the cost of the trip in an older car is about 10 per cent higher.
Public transport can also be more costly for those that only have the money to buy daily tickets rather than an annual pass.
Phone data
Australians now rely on a phone for most things in their life with prepaid mobile options the preferred option for those with low incomes.
However, it can cost more if you are topping up often, which is usually the case for those only able to afford small instalments.
If they are topping up weekly the premiums are higher as $10 will only purchase 2GB of data, according to the report.
Energy bills
Many households are paying more than they need to but cheaper premiums require financial and online literacy.
People on low incomes also have the least ability to invest in renewable energy which costs more upfront but reduces bill costs over time.
The report revealed the average electricity bill for a family of three was 20 per cent higher than those that have solar.
Home and car insurance
Over 30 per cent of low income earners don’t have insurance due to the cost, which leaves them at risk of even more financial losses.
The report found to insure the same car in a poorer suburb was 61 per cent more.
Anglicare Australia executive director Kasy Chambers said it was unfair people on lower incomes were paying more for basic essentials.
“These extra costs are a poverty premium, punishing people who are already earning less. We’ve found that people can pay up to one and a half times more for the same service, pushing them even further behind,” she said.
“People on low incomes did not create Australia’s cost-of-living crisis. They shouldn’t be asked to pay a higher price for it. We need a plan to stop the lowest paid Australians from being pushed deeper into poverty.”