Ross Greenwood speaks to Australian Automobile Association CEO, Michael Bradley, who says the average metropolitan household in Australia is spending $17,912 a year on transport costs.
Introduction: Australians forking out more for transport than gas and electricity
Ross Greenwood: Welcome back to Money News right around the country. I’ll tell you something. There’s a new television program that I’m involved in, going to air tomorrow night, called Eat Well For Less on Channel 9 because I work for them. Interesting enough, we try and look at the cost of living. Now, we’ll look at, I don’t know, heating bills. We’ll look at your supermarket things. Obviously, Eat Well For Less is implying all of that. Leila McKinnon will be there. It’s just interesting to know here, that the Australian Automobile Association has put out its transport affordability index.
Now, while you’ve got some other obvious areas where your prices are going up, clearly electricity, and you’ve got private health insurance. We spoke about that a little earlier. One area that is always a bit of hidden, apart from the fuel that your putting in your car, is the price of your car or your price of your transport. Now, it could be public transport, whatever. I’ll be interested in this. I might take a couple of your calls, as well. If you got a view on ways in which you might be able to cut your transport bills if you do.
They’re now saying that the typical metropolitan household is spending $17,912 a year on transport costs. Wow. It’s a decent amount. Let’s try and break it down. Michael Bradley is a Chief Executive of the Australian Automobile Association. He’s on the line. Good day, Michael. How are you doing?
Interview with: Michael Bradley, CEO, Australian Automobile Association
Michael Bradley: Good, Ross. How are you today?
Ross Greenwood: Good. Thank you. Very well, thank you. Thanks for this. Breakdown the $17,912 for me.
Michael Bradley: [chuckles] We monitor a whole range of things, Ross. The main ones for you are things like car loan repayments, rego, life and insurance, service and repair costs, tires, fuel, public transport. We even count tolls. We do this across 15 cities across Australia. We put this out every quarter. What this tells you is that in every single city across the country, the cost of transport is going up. As you said, the average Australian household’s paying about $18,000 a year now.
Ross Greenwood: What’s the most expensive in terms of the incomes that the people receive? I know Sydney is the most expensive in terms of dollars. They’re talking $22,000 a year in Sydney. They’re talking $19,800 in Melbourne. In terms of compared with the income, which is the most expensive in Australia?
Michael Bradley: Brisbane gets the guernsey on that one. It’s not a good story no matter where you look. I think you alerted to it properly when you did your intro. People get very excited about electricity and gas bills. They take up about if you believe the ADS, about 1% or 2% of the household budget. This report says that, on average across Australia, people are spending 13.5% over their income on transport. Worst for people in Brisbane and Sydney but not a good story no matter which way you are.
Ross Greenwood: I’ll tell you what. Think about this. If you’ve got 13.5% on transport, let’s say you’ve got these days because you’ve just bought a house, 35% because you’re a new homeowner, on homeland repayments. 9% goes in super. What did we say before? How much did we say goes in taxing on it? You’re earning a typical income. Well, let’s say on $90,000 you’re paying 25% in tax. Let me just add that up. That’s 34, that’s 69, [crosstalk] 79, that’s 82.5. That’s 82.5%. I haven’t even heated the house, sent the kids to school or anything else like that so far.
Michael Bradley: The moral of the story is that, as you said, the cost of living just continues to go up.
Ross Greenwood: In regards to transport, are there any ways you reckon that people can try and defray these costs or that they should be even considering defraying these costs?
Michael Bradley: The way we’re trying to do it on behalf of people is talk to government about the policies they’re putting in place that it might make life more expensive people. Most of the costs associated with transport, Ross are also pretty much unavoidable. I think there’s things that we try to highlight. If you look at last week’s federal budget, most people would be shocked to learn that there’s about $12.5 billion worth of fuel excise being collected. That’s 40 cents a liter in petrol from the federal government. That’s a fair whack. There’s $530 million in tariffs and taxes to protect our car-making industry which shut down last year.
Ross Greenwood: It shut down, of course. It’s true.
Michael Bradley: There’s a whole heap of money that goes to the government out of the motorist’s pocket. That’s the kind of things that we’re focused on.
Ross Greenwood: I’ll tell you, it’s going to be interesting to watch this because, as you say, these are costs that are largely unavoidable. Many people have to incur these costs to get themselves to work or for work. These are absolutely key. It is important to try and work this out so that people have at least got a few bob around the place, so they can jump in their car and go on holidays at the end of the year. That’d be handy, wouldn’t it?
Michael Bradley: It would be good, Ross.
Ross Greenwood: Good stuff. Tell you what, Michael Bradley, always good on the program. The Chief Executive of the Australian Automobile Association. What do you think about that? I’ll tell you. Good to have you on the program, Michael.
Michael Bradley: Thanks, mate. Bye.
Ross Greenwood: There you go. What you call’s 131873. $17,912. How much do you reckon you spend in your household? Don’t know. Say $60 a week. There’s three grand in fuel before you even start, isn’t it? Think about your insurance. Gets out there, doesn’t it? 131873 is our number
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