The Impact of Inflation on Our Cost of Living: Why Is There a Difference Between the Inflation Rate and Our Wallet's Perception? What Australia's Cost of Living Crisis Asks of Japan

"Prices Rise by 4.3%" Yet Life Feels Harder—The Reality of Household Budgets Reflected in Australia's Price Hike List

At the supermarket, only the essentials are bought. Dining out is reduced. Yet, the money left at the end of the month doesn't increase as expected.

This financial strain is vividly reflected in Australia's price data.

According to a price tracking article published by Australia's public broadcaster ABC on October 29, 2026, the Consumer Price Index (CPI) for September of the same year rose by 4.3% compared to the same month the previous year. This exceeds the Reserve Bank of Australia's (RBA) target of 2-3%, raising concerns about additional interest rate hikes.

However, the figure "4.3%" alone does not reveal where life is becoming more difficult.

Fuel, electricity, fruits, insurance, rent. Analyzing the breakdown reveals that price increases are piling up on expenses that are not easily eliminated from daily life. This provides material for Japanese readers to connect price news with their own wallets.

Fuel up 23.6%, Electricity up 12.8%—Which Items Are Straining Households?

The ABC article uses data from the Australian Bureau of Statistics (ABS) to visualize price changes across a wide range of goods and services.

The main changes from September 2025 to September 2026 are as follows.

*The figures represent price changes in each category as published by ABC. It does not mean that all products or contracts increased by the same percentage.

What stands out is not just the magnitude of the increases. Items like car travel, household electricity, water, and meals, which are difficult to live without, are listed.

For families that need a car, the burden of maintenance and repair increases in addition to rising fuel costs. For families with children, the price hikes in milk, fruits, and breakfast ingredients affect daily shopping.

Even though each is a separate expense, the same account is debited. When price increases coincide, the financial cushion of a household is eroded.

When Subsidies End, the Increase in Burden Becomes Apparent

To understand the current price changes, attention must be paid not only to resource prices but also to the end of policy-driven burden alleviation.

ABC cites the war in Iran as a background for fuel prices exceeding the previous year. Furthermore, the end of a fuel tax reduction measure on August 2 is explained as contributing to the recent months' increase.

Regarding electricity rates, the end of several government subsidy measures is related to the year-on-year increase.

It is important to distinguish between the price of electricity or fuel itself and the final amount paid by households.

With subsidies, part of the bill is reduced. However, when support ends, the self-burden may increase accordingly. From a household perspective, this is also a clear "price increase."

Therefore, the 12.8% increase in electricity cannot be simply interpreted as a 12.8% increase in generation costs. The bill includes not only energy prices but also the impact of subsidy systems.

When looking at burden alleviation measures, it is important to consider not only the amount during support but also how much will be paid after it ends.

Price Increases in Games and Hobbies—Even the Enjoyments Saved for Become Costlier

In this list, "Games, Toys, and Hobbies" have risen by 15.5%.

ABC attributes this to the cost increase of computer parts being passed on to consumer prices. However, this does not mean that all toys and hobby supplies in this category have risen for the same reason.

Still, considering the impact on households, it is a change that cannot be overlooked.

When living costs rise, people first reduce travel, dining out, and major purchases. Instead, they may cherish time spent at home and relatively affordable enjoyments.

If even the realm of hobbies becomes more expensive, the sense that "sacrificing will create room" weakens.

What high prices take away is not just the number of purchasable goods. It also affects the money available for enjoying daily life and the mental leeway.

There Are Also Items That Have Decreased in Price. Yet, Why Isn't Household Life Easier?

On the other hand, the list also includes items that have decreased in price.

Urban transportation fares have fallen by 12.3%. Household textile products are down 4.5%, infant and children's clothing by 3.4%, and eggs by 2.3%. Large home appliances are down 1.5%, and furniture and pork have each decreased by 1.3%.

In other words, it's not a situation where "everything has uniformly increased in price."

Yet, the burden on households does not lighten because whether one can benefit from the price drops varies depending on their lifestyle.

For those who frequently use public transportation, the fare drop might be helpful. However, for those who cannot do without commuting by car, the rise in fuel prices becomes a bigger issue.

Furniture and home appliances are hard to benefit from unless replaced. However, electricity bills, rent, and food expenses need to be paid repeatedly.

The fact that "there are cheaper items" and the feeling that "my life has become easier" do not necessarily align.

On Social Media, Questions Arise About "Official Numbers and Personal Experience"

Such discrepancies are also reflected in discussions on social media.

On Reddit's "r/AusFinance," which deals with Australian households and the economy, posts expressing disbelief in the inflation rate figures have been seen even before the publication of this article. One poster questioned whether there is a more appropriate figure that better reflects the relationship between household spending and income, as the figure of 4.0% does not match their experience.

In response, replies explained that the CPI is an index summarizing various goods and services at a certain weight and does not match the combination of items one actually buys. It was also pointed out that the average rate of increase does not mean that all living costs have risen at the same rate.

The discussion introduced here is not a direct reaction to the current ABC article but an existing public debate on the same issue. It is limited to a few posts and does not represent the overall public opinion in Australia.

However, this exchange provides clues to consider the gap between statistics and lived experience.

Just because numbers feel off doesn't immediately mean the statistics are wrong. At the same time, just because statistics are appropriately compiled doesn't negate the struggles of individual households. They are looking at different targets.

"Average Prices" and "Personal Prices" Are Different

The CPI is an index that summarizes the prices of goods and services purchased by households, considering the weight of expenditures.

However, the actual composition of household expenditures varies. Whether one uses a car, has children, lives in a rental, or how much they use medical services—these differences change the impact of price increases.

For example, consider a simple calculation for explanation: if an item that accounts for 20% of expenditures rises by 10%, and the quantity purchased remains unchanged with no changes in other expenditures, it would raise the total expenditure by about 2%.

For a household where the expenditure ratio for the same item is 5%, the increase would be about 0.5%.

Even if the price change is the same, the impact on households is not the same.

Furthermore, "the amount paid did not increase" does not necessarily mean the burden did not increase. By reducing the quantity purchased or giving up desired items, one can keep expenditure down. However, that does not mean the same lifestyle was maintained at the same cost.

Even If the Inflation Rate Drops, Prices Do Not Return to Previous Levels

Another factor that can easily create a gap with lived experience is the accumulation of price increases.

Year-on-year comparisons are basically comparisons with one year ago. They do not represent how much higher prices have become compared to several years ago with just that number.

Suppose a price of 100 rises by 10% to 110 the next year, and then rises by 4% the following year. The price becomes 114.4.

The rate of increase has dropped from 10% to 4%. However, compared to the initial 100, it is 14.4% higher.

This is a hypothetical example to illustrate the mechanism and not the actual measured values for Australia this time. However, it well represents why, even when hearing news that "inflation has settled," it is hard to feel that shopping has become easier.

Households are not only looking at the speed of price increases. They are concerned with how much needs to be paid now and whether income is keeping up with that amount.

The ABC price tracking article provides comparison periods of "3 months," "1 year," and "since COVID" because the view changes when the period is changed. In the article's explanation, monthly data is used for 3-month and 1-year comparisons, and quarterly data for "since COVID."

When Reading in Japan, Do Not Apply Australia's Numbers Directly

The current numbers are for Australia and do not mean that Japan's fuel costs or electricity rates have risen by the same percentage. Given differences in tax systems, subsidy systems, transportation methods, and housing situations, caution is needed in simple comparisons.

However, there are common perspectives in reading the news.

First, look not only at the overall rate of increase but also at the items with large personal expenditures. Even if the increase is smaller than average, it can impact households if the original payment amount is large.

Second, look at cumulative changes from several years ago, not just year-on-year comparisons. Even if the recent price increase is small, the state of being higher than before may continue.

Third, look at the actual billed amount, including subsidy systems. Market prices and household self-burden do not necessarily move in the same way.

By separating these three, it becomes easier to organize "why the news numbers and personal feelings differ."

What Is Needed Is for Numerical Improvements to Lead to Life Improvements

In Australia, the 4.3% price increase is leading to concerns about additional interest rate hikes. However, what the current article conveys is the concern over rate hikes, not that future policy decisions have already been determined.

What is crucial for households is whether they can maintain their current lifestyle while paying for fuel, food, and electricity.

Even if there are cheaper home appliances, if there are no plans to replace them, they are unlikely to help this month. Even if urban transportation fares drop, the fuel costs for families who cannot give up their cars do not decrease. Average price changes alone cannot capture all these differences.

The ABC list shows more than just the ranking of price increases. It shows which expenses are increasing, which burdens are hard to escape, and who can benefit from price drops. These differences influence the sense of living.

When reading price news, questions beyond "how much did it increase by" are necessary.

How much more is needed to continue the same lifestyle? And is income keeping up with that increase? The reality of household budgets is reflected in that answer.

Sources and References

1. ABC News "Inflation tracker: See how the price of everything has changed"
   Referencing the CPI for September 2026, item-specific price changes from September 2025, the