Renters the hardest hit by costs of living, 46% of Australians cutting back on essentials: CHOICE

According to a new nationwide survey, 46% of Australians have been forced to reduce their spending on "essential" items.

The independent consumer body CHOICE reports that renters are the hardest hit, with 45% of renters reporting that they are struggling to get by on their current income, compared to 27% of mortgage holders. Low-income households and parents with school-aged children also reported financial hardship.

Of the 1,001 survey respondents, 31% said they were finding it difficult to get by on their current income, with 11% finding it "very difficult". Only 18% said they were "living comfortably", with 5% responding that they were living "very comfortably".

CHOICE chief executive Alan Kirkland says one in every five respondents reported they have relied on credit cards or borrowing from friends or family to cope until payday.

"This reveals some striking concerns with cost-of-living, which is perhaps not surprising at a time when inflation is outstripping sluggish wages growth, retail sales are fragile and the political debate remains focused on household expenses,” says Kirkland.

Government cutbacks were a major concern for consumers, with 72% worried about government spending cuts. Kirkland calling public spending reductions "the major consumer worry".

Major household concerns include electricity bills, fuel and food and groceries. The survey, which saw 52% of respondents claiming they were "very worried" about electricity prices, was conducted before the repeal of the carbon tax.

“With such a drawn-out debate over the carbon tax it is not surprising to see electricity at the top of the list, although clearly prices have been driven by a number of factors, including rising infrastructure costs,” says Kirkland.