How $20 has become the new $10 amid Australia’s cost of living crisis
Australians are now willing to pay nearly $20 for a simple lunch amid soaring inflation that would have cost half that just a few years ago.
A scan of online cafe menus in capital cities shows that the astronomical price for smashed avocado at your local has now become the norm rather than the exception.
And beer aficionados will recall not too long ago when a $12 pint seemed outrageous, but punters in pubs in Byron Bay and Perth recently complained about nearly $20 pints of the amber ale.
$20 has become the new $10 as Australia’s cost of living crisis worsens
An Australian woman complained on Reddit that this regrettable lunch cost her nearly $17
Beer prices have risen to over $17 in some places – here in Western Australia – amid inflation and a beer tax increase
A $17.90 jerk chicken sandwich at Melbourne’s The St Kilda Dispensary, a $21 chicken burger at Wild Sage in Sydney’s Barangaroo, or the $18 haloumi tacos at Brisbane’s Ed on Edward St are nothing out of the ordinary in terms of price .
But it’s not just boutique cafes where cash doesn’t travel as far as it used to, with customers most likely not getting much back from a $20 bill when buying a burrito, some sushi rolls, or a chicken salad with a drink at well-known chain restaurants.
The Economist’s Big Mac Index, which measures consumer purchasing power, shows that the humble hamburger at McDonald’s cost $3.45 in 2008, but has now more than doubled in price to $7.35.
“Lunchflation” has become a legitimate problem according to retail technology company Square, which analyzed sales data from food courts, restaurants and cafes across the country.
In just 12 months to March 2022, the average price of sandwiches has increased by 28 percent, sushi by 27 percent, kebabs by 15 percent, and burgers by 14 percent.
“What we’re seeing with ‘lunchtime inflation’ is indicative of a number of wider challenges emerging in the external environment,” said Colin Birney, head of business development at Square Australia.
Your suspicions are correct, lunch prices are steadily rising according to recent data
A McDonald’s lunch now costs more than $15 with only a Big Mac worth $7.35
Retail tech company Square said “lunch inflation” was a legitimate problem
He attributed the price increases to a perfect storm of factors, including supply chain issues, wild weather and inflation driving up ingredient prices.
This has combined with increased costs for hospitality businesses to hire due to labor shortages and minimum wage increases and fewer walk-ins as remote working remains in place.
“Especially with the price hikes that have probably pushed some people to pay a little more attention to their lunch options,” said Birney.
“But we certainly think small businesses deserve our support if we can.”
Beyond lunches, coffee drinkers will be all too familiar with the steadily rising price of a cup, with a medium flat white hard to find for less than $5.
On a recent trip to Sydney, Melbourne’s Traci Chen complained that she had overpaid for her takeaway coffee when she visited Crown Towers in Barangaroo.
“Oh my god just got charged $8.90 for a cup of coffee,” she said on TikTok, holding up her receipt.
She said she thought that was expensive for the “average” order until she spoke to her friend who told her she had recently paid $10 for a “one size” cup of brew in Brisbane.
Melbourne’s Traci Chen revealed her very expensive coffee purchase while visiting Sydney’s Crown Towers (pictured)
And in addition to restaurant food, many grocery items have experienced a surge, including butter, chips, sodas, breads and cereals, which when combined can add up to a huge amount of a weekly shop.
Recent research from Deakin University showed that iceberg lettuce and broccoli have doubled in price from just a few years ago.
Not to mention the skyrocketing rent and electricity prices plaguing Aussies.
The Reserve Bank is fighting to bring inflation back to between 3 and 4 percent from its peak of over 7 percent, where it accounts for a large portion of household living costs.
The Reserve Bank of Australia raised its key cash rate to 4.1 percent on Tuesday, another blow to mortgage holders.
The hike marks the 12th increase since May last year, when the central bank first began raising interest rates.
Treasury Secretary Katy Gallagher said inflation remained high for longer than expected, but that the recent rate hike was not due to the federal budget or minimum wage increase.
“We’re in a very tough environment, we’re not pretending otherwise, we know this is hitting households really hard,” she told ABC Radio.
“It’s our job as a government to manage the budget, to make sure that the decisions we make don’t make the Reserve Bank’s job more difficult.”
Chips, once an inexpensive snack, have achieved gourmet status in some supermarkets
The Reserve Bank expressed concern about the gap between wages and productivity levels following the latest rate hike.
Senator Gallagher said productivity was an urgent area to address.
“We want wages to move, but we also recognize that we have a significant productivity challenge that we’ve inherited,” she said.
“We accept that in order to have sustainable wage growth in the future, we have to face the productivity challenge.”
Asked if the RBA pushed through the increase because government-backed wage increases risk driving high inflation, Home Secretary Clare O’Neil said that was definitely not the case.
“It’s (the tariff decision) not a government decision,” she told Seven’s Sunrise on Wednesday, adding that she knows families are struggling.
“What I want them to know is that the Albanian government is doing everything it can to ensure that we can cover the cost of living as much as possible.”
Opposition finance spokeswoman Jane Hume said in terms of economics that the government had one foot on the accelerator while the RBA had one foot on the brakes.
“The governor of the RBA said that without corresponding productivity gains those wage increases will simply be more inflationary and we can expect further rate hikes,” she said.
“Of course they have to raise the rates again.”
Economic growth figures for the March quarter will be released on Wednesday.
A bottle of water cost $10 at a Sydney cafe, sparking backlash online
A lunch-goer snapped a photo of a chicken baguette in Sydney’s CBD that cost $17.50
A visitor to Byron Bay complained in December that pints of Peroni cost nearly $20 each
Based on the series of clues revealed by the Australian Bureau of Statistics ahead of the report, ANZ economists expect a 0.4 percent rise in the quarter and an annual increase in gross domestic product of 2.5 percent .
Senior economist Felicity Emmett said the various inputs into the GDP figure released in recent weeks were strong enough to raise projections from an earlier forecast of 0.2 percent quarter-over-quarter growth.
“A gain of 0.4 percent for the quarter would be slightly lower than the 0.5 percent recorded in the December quarter and suggests economic momentum continues to slow in response to monetary tightening,” Ms Emmett said.
Wages and productivity indicators in the growth report would also be carefully watched given the RBA’s concerns about unit labor costs, she said.
RBA Governor Philip Lowe is likely to elaborate on the bank’s case for raising interest rates in June and indicate the central bank’s outlook when he speaks at the Morgan Stanley Australia Summit in Sydney on Wednesday.
The 25 basis point hike on Tuesday pushes cash interest rates to their highest level since April 2012.
The governor is not ruling out further tightening, but the trajectory for interest rates will depend on how the economy and inflation evolve.