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Cost-of-living squeeze forces families to adapt as Perth struggles with Australia's worst inflation

Lisa Dodson (right) is living with her mother (left) as well as her two sons and their partners.  (ABC News: Keane Bourke)

A Mandurah family has found a creative way to combat cost-of-living hikes, gathering three generations under one roof as Australia's inflation figure surged to a 20-year-high.

Lisa Dodson now lives in the one home with her mother, her two adult sons and their partners, in a bid to share costs.

"We're all full-time workers but we all share a house because we find it's too expensive with rent, petrol, bills, et cetera, and we find it's easier so that we can live and not just survive," she said.

"We all go fifths on everything, we share the bills, we share the rent, and it just works for us, luckily, we all get on, so yeah, it's a good set-up for us."

Ms Dodson (right) and her mother are among those finding ways to stretch their money further. (ABC News: Keane Bourke)

Ms Dodson said if she were to live alone, she would need to sacrifice too much just to pay rent.

"The average rent at the moment is $500 a week. I work full-time I couldn't even afford that on my own and still have a life and still have the luxuries that we get to have," she said.

"Give it a go. It's unique but if you get on with your family, like if you are a brother or sister, and you have a couple of kids and you can share a house, do it, because it does make it liveable."

Ms Dodson says living under one roof helps share costs, so they can do more than "survive". (ABC News: Keane Bourke)

Western Australia's inflation figure is even higher than the national number, with Perth topping capital cities at a whopping 7.4 per cent.

"People will be saying this is good news compared with what was expected, but it is still high," economist Conrad Liveris told ABC Radio Perth.

"And that's not going to be hugely surprising to a lot of people, everyone is feeling the cost-of-living pressures at the moment."

The price of a new home in Perth has risen by 4.8 per cent in the past three months and it is housing that has been a large driver of inflation in WA for a long time now.

"In the past year, the biggest driver in WA has actually been new housing and people wanting to buy a new place," Mr Liveris said.

"There's been a fair bit of government stimulus over the past couple of years in that particular area,"

"But at the same time, we still don't have enough housing for people, so those prices are going up, and I think anyone who has been looking for a new place has had that sort of experience recently.

The impacts have been exacerbated by a shortage of tradespeople slowing the delivery of new homes and making them more expensive to build.

Surge in people with jobs needing charity

Anglicare WA CEO Mark Glasson said with prices of everything rising, more West Australians were turning to the organisation for help with food and finances.

He said this included an alarming number of people who had jobs but now found their pay was no longer sufficient.

Anglicare WA CEO Mark Glasson says the state's two-speed economy is getting worse. (ABC News: Tabarak Al Jrood)

"Basically, people on the edge of our community are going to be doing without the things that are really essential to a good life," he said.

"Last month we had a 30 per cent increase in people who are in work but just can't afford the essentials in life.

"Frighteningly, we're also starting to see now a rapid increase in aged pensioners, people who have worked their whole lives, now not being able to get by because of the increased costs they're facing."

Mr Glasson said the true scale of hardship in the state was harder to see because some West Australians were doing really well.

"What we see happening is a worsening of the two-speed economy. Western Australia is notorious for a couple of things, one is a two-speed economy," he said.

For WA families, one of the biggest price increases has been in rent, which has risen by 9.1 per cent in the state in 12 months compared with 1.6 per cent nationally.

"Rent is the biggest single cost a family will face in any week, and we're seeing rapid growth in the rental cost. And that means people just aren't going to have the money they need," Mr Glasson said.

"This is going to be bad and this going to be here for a while."

Warning financial stress affecting children

Anglicare WA has also raised concerns about the impact added financial strain could have on families with young children.

The service manager at the organisation's Child and Parent Centre, Justine Hanson, said children often suffered despite the best efforts of parents.

Justine Hansen says children react and respond to adult anxiety caused by financial stress. (ABC News: Keane Bourke)

"Our concerns are around when you add stress into a family and the impact that has on child development, on parental connection," she said.

"The ability for children to have after-school activities, to have sport, all of those things fall away, and they're really important for child development and child growth."

Ms Hanson said added stress in the family meant added stress for children.

"It can create a lot of conflict between parents. I think financial stress is one of the big things that can really impact on relationships," she said.

"It can really impact on connection with children. Children feel it even with parents that do their very best to keep that away from them, children react and respond to that anxiety."

Ms Hansen says the lack of affordable housing has erupted and children are suffering. (ABC News: Keane Bourke)

Ms Hanson said the most important task for government was to ensure that families with children had secure housing.

"We can't have children living in cars and going off to school without showers, without breakfast, without sleeping in a bed."

McGowan defends cost-of-living help

Speaking in Karratha yesterday, Premier Mark McGowan and Housing Minister John Carey insisted affordable housing was a key priority for the government.

It came as the pair unveiled a $500,000 grant to help refurbish townhouses and unlocked parcels of crown land in the area to deliver more medium-density dwellings for the town.

On inflation generally, Mr McGowan highlighted that much of it could be attributed to issues outside of the state.

"It's quite much higher than people are used to, certainly in the past three decades," he said.

"The advice is that this is temporary and that it will dissipate over time, but there are international factors involved in this that are making it something that is happening all over Australia.

"And it's one of those things that we're doing our best to deal with by providing cost-of-living relief."

Mark McGowan says the actual cost of living in Perth remains lower than other capital cities. (ABC News: Evelyn Manfield)

Mr McGowan listed measures including the $400 power bill credit, capped regional airfares, capped public transport fares in Perth, free rapid antigen tests and a cost-of-living rebate for seniors.

The Premier also highlighted that despite high inflation, the actual cost of living in Perth remained lower than other capital cities.

But the Opposition has accused the government of failing to use its record budget surplus to adequately help West Australians.

'Good faith' missing in pay talks: UnionsWA

UnionsWA pointed to the inflation figure as evidence that public sector workers in WA had effectively seen their wages cut.

State secretary Owen Whittle said many unions representing public sector workers would be pushing for annual pay increases "well above" 5 per cent.

The government's offer is 2.75 per cent and it remains locked in negotiations, which Mr Whittle said were going nowhere.

There are warnings of increased industrial action if public sector workers do not get "a real pay increase". (AAP: Joel Carrett )

"The government isn't bargaining in good faith … the decision-makers aren't in the room," he said.

"The unions are sitting down with other public sector workers who aren't authorised to offer pay increases.

"It is just a waste of our time and the government is wasting our time in bargaining."

Mr Whittle warned a planned strike for next month was looking increasingly likely to go ahead and to be followed by further industrial action if the government did not come to the table.

"If the state government doesn't come to the table and fix its failed wages policy, they will be responsible for dragging the wages down for all West Australians."

The federal Treasurer Jim Chalmers is set to deliver a budget update today with a warning that inflation is expected to get worse before it gets better.

ATO warns you can't over claim at tax time to help with cost of living.
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