Living on a houseboat comes with a few perks. Unlike his mates on the mainland, Arthur White isn't dealing with skyrocketing rental prices or anxiously anticipating interest rate hikes.
There are some downsides too, though, like having to source your own electricity to boil a cup of tea. And life at sea hasn't been enough to shield the retired pensioner from the cost of living crisis engulfing Australia.
Electricity supply issues hit a tipping point on the east coast last week, driven by the soaring cost of wholesale energy and high winter demand. There are now warnings the cost of household energy bills will balloon within weeks.
But far away in the Gove Penisula, in the northeast corner of Arnhem Land in the Northern Territory, Arthur has already figured out a solution to his very own energy crisis.
"I generate my own electricity using solar panels during the day, and a small generator in the evening — in the past, that used about eight litres of petrol a night," he says, "so you can imagine why my costs have gone through the roof".
When Russia's war in Ukraine triggered a global oil supply crunch, the 73-year-old found he was paying about $2.70 for a litre of petrol just to keep the lights on. Australians across the country have felt similar pain at the bowser, as fuel prices exceeded $2 a litre in capital cities last month.
The spike meant Arthur was no longer able to afford the same groceries he usually could on his weekly pension of just over $500.
An answer to his problem came in the form of a $275 wind generator, which has reduced his fuel costs by about 60 per cent or $189 a fortnight. "The good thing is at this time of year we get a fair bit of wind," he laughs. "If I hadn't bought that, as the weather warms up again, I would have been at a point where I wouldn't be able to afford the food I need to sustain life."
Arthur's experience, while undoubtedly unique, is not an isolated one. Across cities, the regions, and even the sea, Australians from a variety of income levels are suddenly having to find new ways to keep costs down. While for some this looks like investing in renewable energy or starting a vegetable garden, for others it has meant going without basic necessities.
"I can imagine how bad it is for pensioners like myself living on shore, who pay rents, rates, electricity, and water," Arthur says. "The way it's going now, I consider myself lucky."
Everything, everywhere, all at once
Over the past few months, an unwelcome bounty of financial stresses have begun to stack on top of one another.
During the pandemic, we got our first taste as thousands of workers suddenly found themselves out of a job. As Australia ushered in the new year, things were looking up with the end of lockdowns and the reopening of international borders. But that soon brought its own challenges; with migrants back in the country and rental vacancy rates at record lows, it didn't take long for rental prices to creep up.
Soon came the pain at the bowser. With the war in Ukraine in full swing, petrol prices soared, adding further pressure to already cash-strapped families. Then, this month, the Reserve Bank increased interest rates by half a percentage point and warned that further rises were likely, leaving borrowers biting their nails.
And now we have lettuces selling for more than $10 a head in some supermarkets, an inflation rate of 5.1 per cent that is only set to grow, and energy supply issues that could see household bills skyrocket.
It's a lot to keep track of, and according to Edwina MacDonald, the acting chief executive of the Australian Council of Social Services (ACOSS), the result is nothing short of a "crisis point".
"We've got these converging crises — cost of living, increasing energy costs, a double whammy of COVID and flu season, and we're going into a really cold winter," she says. "We know people are already struggling to just afford the basics, and with increasing inflation, it's only going to get worse."
In response, the Fair Work Commission last week announced a 5.2 per cent increase to the national minimum wage, bringing it slightly above inflation. In practice, this means an extra $40 a week for those on the lowest wages. But with the Reserve Bank governor Philip Lowe warning that inflation could hit 7 per cent by Christmas, many say it's only the tip of the iceberg of what's needed.
"What that decision is doing is addressing inflation and making sure people aren't falling behind," MacDonald says, "but we certainly need to do more to improve the lives of people on low and modest incomes".
Giving up to get by
When looking at the load of financial pressures Australians are under, the obvious next question is what can households do to make it out the other side?
The answer is different for everyone, given these pressures are not felt evenly across the community. "People on low, fixed incomes often have much less ability to adapt to these cost of living increases in ways that don't cause them poverty," says Professor Roger Wilkins, an expert on socioeconomic disadvantage at the University of Melbourne.
It's this group that have found themselves having to choose between paying their electricity bill and buying medication or buying petrol and being able to afford their rent. "These are just unacceptable choices in a fundamentally wealthy country like Australia," MacDonald says. "No one should be having to make a choice between really basic needs like that."
But when it comes to households with more room in the budget, there's a wide range of ways people typically respond to increased financial pressure. The first, Professor Wilkins says, is dipping into savings.
But savings are ultimately finite, and for many the next step is reducing discretionary spending, whether that's giving up trips to the cinema or putting off buying that new washing machine that you kind of need, but not really.
There's growing evidence, however, that people often treat items as discretionary that "really shouldn't be", Professor Wilkins says, such as opting to reduce insurance coverage or ditch it completely. "And that then makes them much more exposed to risk, say you crash your car, then you can't afford to fix it, and that means you can't get to work," he says.
"Everything is interlinked, so everything is on the table of how people respond to it."
The above list of cost-cutting measures is all too familiar to John O’Driscoll, a father of two teenage boys from Melbourne's outer suburbs. After almost a year of unemployment due to a pandemic-induced redundancy in 2020 and with a new mortgage to pay for, he's found he and his wife's full-time incomes are no longer enough to keep up with their lifestyle.
One of the first expenses to go was health insurance, a difficult decision for the 52-year-old. "We're at the age when you want insurance, so it wasn't something you take lightly," he says.
Since then, trips to the cinema, streaming subscriptions, and takeaway have all been stripped from the budget. In the kitchen, tofu has started popping up more regularly in place of meat, snacks in the pantry are scarce, and discount boxes of "ugly" vegetables are a staple.
"Where before I would go to the coffee shop a couple of times a week, we don't do that anymore — we just don't go out," he says. "You keep getting rid of little bits and pieces."
John explains that his situation is not so bad compared to many others doing it tough — for now, he can still afford his fixed-term mortgage payments, his children's private schooling, and to put food on the table. But still, he says, it's like running just to stand still.
"At one stage, my pay seemed to be alright, we lived comfortably — but over the years, it just seemed like my wages didn't go up as the prices of things were constantly going up," he says. "I've never felt the worry I feel now."
Anticipating worse to come
It's a similar story for Deanna, another new homeowner in Melbourne's outer suburbs, who did not wish to use her surname.
The 29-year-old works full-time in a "pretty stable job" and her partner owns a small electrician business. But after breaking their budget to purchase a home a year ago, they're anxiously anticipating further interest rate rises.
"We're stretched to our limit in terms of mortgage repayments," she says. "And everything I am hearing and feeling with the cost of living and potentially interest rates going up in the future, I, like many other people, am trying to make cuts now."
On top of the usual tricks to reduce the cost of grocery shopping — buying from affordable farmers' markets and eating mostly plant-based meals — Deanna has quit her psychology sessions and cancelled her gym membership as a first step to getting ahead on their mortgage.
"On a good week when there were no extra expenses, then it was fine," she says. "But when things come up, like my dog needs surgery, I need to cut back those expenses."
Like John, Deanna stresses that she's aware of her privileged position — that she does have expenses that can be eliminated without compromising basic needs — but says the added financial pressure is constantly front of mind.
"Looking at it from mortgage repayments, I think 'well what's going to happen if I'm on maternity leave, or trying to manage on one income', all those logistics that I've never had to think about before," she says.
"I don't think we're in a position right now where we're acutely financially stressed, but it's the anticipation of what's to come."
For some, none of this is new
The reality of the situation is far different for millions of Australians who were living below the poverty line long before the cost of living crisis hit headlines.
More than three million Australians are believed to be living below the relative poverty line, set at $457 per week for a single adult (equivalent to 50 per cent of the Australian median household income), according to a 2020 report by ACOSS and the University of New South Wales.
The majority of these people rely on government welfare for their income. The current Job Seeker rate for unemployed Australians currently sits at $321 a week — below half the median income and the Henderson poverty line of $493 for a single person as of the December quarter.
At OzHarvest food bank in Waterloo, in Sydney's inner suburbs, people in the line — many of them reliant on government support — are quick to list the ways it's become harder to survive in recent months.
Max, who did not wish to use his surname, says he's been on Job Seeker since he was stood down from his job as a caterer at Sydney Airport during the pandemic. With two young children to support, who are with him in line, he's been relying on the food bank to save money for other expenses.
"Everything is getting more expensive," he says. "Electricity bills, water, internet — my kids are going to school and need an internet connection, I can't say 'oh no, sorry, I don't have money to pay the monthly internet bill'."
He believes this is the "hardest time in Australia for everyone", describing conversations he's had with people at supermarkets, despairing at the cost of cucumbers. It's a perspective shared by Tim, a pensioner who describes OzHarvest as "a life saver".
"You go to Coles and Woolies, and broccoli is $7 — you've got to wait for weeks until it comes down to a reasonable price and then you might be able to buy it," the 71-year-old says. "Each week, I go to Aldi, Woolies, and Coles to see what's the cheapest, and I've got a walking stick."
For Anna, a psychology student at the market for the first time, the cost of surviving is sometimes eating just one meal a day while she looks for casual work.
With no end in sight for the current crisis, Professor Wilkins reiterates the serious consequences for people living on the poverty line.
"What it means is increased hardship, amongst a group that already face a lot of hardship, and when you get increased hardship you get increased stress, mental distress, family conflict, poorer health, and more suffering," he says.
"What it translates to is the lived experience of Australians, in some cases, being intolerable … People say money doesn't make you happy, but it's sure hard to be happy without money."
