AAA Index: households under increasing pressure from transport costs

Australia’s peak motoring body today released its latest Transport Affordability Index which shows the average Australian household now paying $17,147 a year for land transport, up from $16,894 in the previous quarter. The Australian Automobile Association’s (AAA) Transport Affordability Index shows that nationally, transport costs also increased as a percentage of income over the quarter to December, from 13.4 per cent to 13.6 per cent. By comparison according to the ABS[i], household expenses relating to electricity and gas consume one to three per cent of household budgets. AAA Chief Executive Michael Bradley said: “The AAA’s latest Transport Affordability Index shows transport cost pressures continue to grow and should act as a reminder to all governments that policy must be designed and reviewed to minimise pressure on household budgets.” Summary of findings – Quarter 4, 2016:

• The largest increases occurred in Sydney and Melbourne at $397 and $519 respectively per year. In both cases, the greatest increases in any single category were in fuel.
• A typical family in Sydney is paying around $22,050.30 (up from $21,653.29 in Q3) while the annual cost of land transport is lowest in Hobart at $14,438.71 (up from $14,197.07 in Q3).
• A typical two-car Sydney household faces weekly transport costs of $424 — or $22,050 per year — ahead of Brisbane and then Melbourne at $19,409 and $18,575 per year respectively.
• In Perth and Canberra, weekly transport costs were $314 per week and $306 per week respectively.
• Brisbane was the only capital city to experience a fall in average annual transport costs, down from $19,614.76 to $19,409.29. Due to a new fare and zoning structure, public transport costs in Brisbane fell by more than $600 per year for the hypothetical family. This decrease was, however, partially offset by increases in other categories.
• Transport costs in the lower-income, lower-density cities of Adelaide and Hobart accounted for 13.5 per cent and 14.6 per cent of household budgets respectively.

Commissioned by the AAA and developed by SGS Economics & Planning, the Transport Affordability Index tracks transport affordability by analysing tax, tollways, public transport, insurance, maintenance, fuel and finance costs as a proportion of average household income across states and territories. The Index is based on the incomes and transport costs of a hypothetical household in each capital city that consists of a couple with children and two cars, the average household identified by the 2011 Census.  The Index will be updated regularly by the AAA, and can be downloaded here.