Almost half of Australians say cost of living is the most important issue facing the nation, according to the latest Sky News Pulse poll, as high inflation and interest rates continue to strain household budgets.
Cost of living dominates national concerns
The new Sky News Pulse/YouGov poll reveals that price pressures eroding Australians' purchasing power are suffocating the country. Approximately 45 percent of respondents identified cost of living as the most pressing issue among a list of 12 options facing Australia. This marks a four percent increase from the same question posed on February 26 and far exceeds the second-place priority of immigration, which garnered only 10 percent.
The survey, which polled 1,471 voters between May 26 and June 2, also found that 70 percent of Australians expect energy prices to surge over the coming year. This poses a challenge to Labor's green energy policy and its repeated promise that renewable energy will deliver the cheapest power to Australians.
Energy price fears hit families hardest
Families are bearing the brunt of the energy crunch, with at least 75 percent of Generation X predicting higher power prices in the next 12 months. Parents were more likely than non-parents to anticipate energy price increases, while 80 percent of One Nation voters forecast a hike.
Beyond cost of living, economic concerns dominated the list of worries. About nine percent of respondents said managing the economy and government debt were the most important issues, and another eight percent selected housing affordability. However, these ranked third and fourth respectively, each trailing cost of living by more than 35 percentage points.
Millennials were the most likely to choose cost of living as the leading issue, with 54 percent of that generation selecting it. At least 50 percent of Australians with a mortgage and 51 percent of renters also cited cost of living as their top concern.
Political fallout: One Nation tops Labor
Outside economic struggles, the latest Sky News Pulse reveals that One Nation has overtaken Labor on primary vote. One Nation rose four points to 29 percent, while Labor slipped two points to 26 percent. Labor's decline follows its unpopular May budget, which broke pre-election promises not to change capital gains tax or negative gearing. The CGT proposal, scrapping the discount and replacing it with a tax on real gains, sparked outcry from business leaders and entrepreneurs who warned founders would move overseas.
The Coalition has not gained Labor's disgruntled voters, despite vowing to repeal the changes, as the Opposition slipped three points to 20 percent.
Interest rate hikes and inflation persist
Labor's decline also coincides with the Reserve Bank of Australia (RBA) raising interest rates three times since the beginning of the year. This has added $272 per month in mortgage repayments for a household owing $600,000 on a 25-year loan. The central bank's rate hikes come as inflation in the year to April stood at 4.2 percent, well outside the RBA's 2-3 percent target band. Trimmed mean inflation, which covers the middle 70 percent of price changes, rose to 3.4 percent as housing costs remained elevated.
Government spending was partly blamed for the May rate hike, contradicting boasts from Treasurer Jim Chalmers after the decision. "The Reserve Bank statement does not point to public spending as a factor in their decision to increase interest rates today," Mr Chalmers told reporters in early May. "To those people that are pretending that the government's budget is the sole driver of prices in our economy or interest rate decisions - they weren't saying that when interest rates were cut three times."
RBA Governor Michele Bullock acknowledged that government spending had made the central bank's inflation fight more challenging. "We have a situation in Australia prior to the war, where we had demand above supply," Ms Bullock said. "The ability of the economy to supply the goods and services that were being demanded in total - including by government and by the private sector - was outstripping the ability of the economy to supply it." She added, "The extent to which government make up the shortfalls for households by giving them more money - it makes it harder to dampen demand."
The RBA will announce its next cash rate decision on June 16, and it is widely expected to hold the cash rate at 4.35 percent after unemployment unexpectedly climbed in April.
