Research by Australia’s peak motoring organisation reveals Australian transport costs are rising almost twice as fast as inflation. This is increasing pressure on Australian household budgets.

The Australian Automobile Associations’ (AAA) June 2018 Transport Affordability Index shows transport costs rose in every city and region for the second quarter in a row and that typical Australian households are now spending between $600 and $750 a year more on transport than they were a year ago.

From June 2017 to June 2018, the consumer price index (CPI) increased by 2.1 per cent[1], yet over the same period, the average cost for a city family in the affordability index increased from $17,294 to $18,046 or 4.1 percent.

The report’s benchmark Australian metropolitan household is now spending $18,046 on transport costs, an increase of $134 from the previous quarter and a rise of $754 from June 2017. The benchmark regional household spends $14,466 per year on transport, an increase of $140 over the previous quarter and a rise of $603 from a year earlier.

The proportion of total household income being spent on transport increased for both the average metropolitan and average regional families, reaching 14.4 per cent (up from 14.3 per cent) and 12.6 per cent (up from 12.5 per cent) respectively.

AAA CEO Michael Bradley said: “Transport is a significant and unavoidable cost for households and this report shows Australian motorists in every capital city and across every regional centre are facing increasing cost pressures from transport.

“The cumulative effect of repeated increases in transport costs is a heavy burden at a time when Australians are feeling cost of living pressures across the board. Policymakers around the country need to recognise that households are facing these rising costs and look for policy solutions that can help keep them in check.“

The increase in transport costs over the June 2018 quarter was largely due to rising fuel prices. The metropolitan family is now paying an additional $940 a year in fuel costs compared to the first quarter of 2016 when the Index first started collecting data.

Sydney remains the city with the highest transport costs – its average household spends $22,520 per year on transport. But higher incomes mean Sydney ranks fourth in the proportion of income spent on transport costs.

The average Brisbane household spent 16.5 per cent of its income on transport, ranking Brisbane once again as the city with Australia’s least affordable transport costs.

[1] Australian Bureau of Statistics website, http://www.abs.gov.au/ausstats/[email protected]/mf/6401.0